Deciphering the G-8 on Africa

I’m having a hard time getting excited about the G-8 agreement on increased African aid.

I’m not alone. Oxfam doesn’t sound too happy. Nor does Dr Kumi Naidoo, chairman of the Global Call To Action Against Poverty, who said “The people have roared but the G8 has whispered.”

The $50 billion sum would impress me more if I believed the money in question would get dispersed. I got very excited about the Millenium Challenge Account – later the Millenium Challenge Corporation – first announced in early 2002, which promised $5 billion a year in aid to qualified developing nations. Three years later, the fund has dispersed a total of $400,000 and signed agreements with only 4 of the 16 countries eligible for aid. It’s unclear whether Congress will ever fund the MCC at the promised levels.

President Bush has been quoted recently as claiming that the US had “tripled” US aid to Africa since 2000. Media Matters for America cites an analysis by former Assistant Secretary of State for Africa Susan Rice, which shows a much more modest increase – between 43 and 67% total between 2000 and now. Nancy Birdsall, the president of the Center for Global Development, analyzes Bush’s assertion of a tripling of aid from 2000 and a future doubling and concludes that most of those promises would be fulfilled by fulling funding the MCC and funding the President’s Emergency Plan for Aid Relief… in other words, this funding increase isn’t news, and won’t happen unless the Republican Congress that’s blocked full funding previously changes its mind.

More disappointing was the failure to set a phase-out date for the tarriffs and subsidies that make it so difficult for African nations to sell to the US and Europe. If Congress’s slowness to fund the MCC makes me skeptical, the lack of a date to phase out cotton and sugar subsidies makes it difficult for me to believe that major progress is going to be made on this front.

The focus on African development issues over the past few weeks have brought some really interesting voices to mainstream attention. Metafilter linked to a great interview in DER SPIEGEL with Kenyan economist James Shikwati. Titled “For God’s Sakes, Please Stop the Aid”, the interview gets off to a roaring start:

SPIEGEL: Mr. Shikwati, the G8 summit at Gleneagles is about to beef up the development aid for Africa…

Shikwati: … for God’s sake, please just stop.

SPIEGEL: Stop? The industrialized nations of the West want to eliminate hunger and poverty.

Shikwati: Such intentions have been damaging our continent for the past 40 years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid.

Shikwati points to some of the difficult realities surrounding aid in Africa – for example, emergency food aid gets intercepted, gets sold on the black market and destroys local markets for homegrown grain. His radical prescription – refuse the aid, force nations to cooperate and trade regionally, so that Tanzanian and Kenyan corn could be sold to alleviate a Ugandan food shortage, for instance.

It may not surprise you that Shikwati is affiliated with the Libertarian organization the International Society of International Liberty, which is currently celebrating “The Year of Ayn Rand”. He’s also featured today by the free-trade Atlas Economic Research Foundation and is the founder of the Inter-Region Economic Network, described as” East Africa’s first free-market research and educational institute.”

While I find articles like Shikwati’s “The developing world needs trade, not aid, to help the poor” somewhat compelling, I worry he doesn’t have much of an answer to the question of “What happens to all the people currently depending on aid when it stops?” While it’s clear that trade barriers are making it much harder for African nations to compete in some sectors, lifting barriers alone doesn’t seem to solve the problem. Lesotho – briefly one of the great success stories of freer trade, exporting non-sweatshop jeans to the United States – is now getting clobbered by China now that the Multi Fiber Agreement (which constrained imports from China to the US) has been “phased” out.

The inimitable “M” of Thinker’s Room covers much of the same ground as Shikwati (hmm… they’re both Kenyan… and we’ve never seen them together in the same room… :-) in a follow-up to his widely cited and controversial post, Live Aid? Please!. The new post is a fable about the (all too real) imaginary state of Kundu which finds itself thoroughly screwed over by centuries of colonialism and decades of aid. It is, needless to say, provoking its own long and interesting comment thread.

I’m late in linking to this, but thought Stephanie Hanes’s post in the Christian Science Monitor Africa blog about her experiences attending the Johannesburg Live 8 concert was interesting – sounds like the vibe was a great deal more subdued than at the London and Philadelphia events.