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The Munk Debate on Foreign Aid

 

Monday night, Munk Debates held an incredibly interesting debate on the effectiveness of foreign aid, in response to the growing allegations from many scholars that aid in fact amplifies the problems of the developing world. The debate took place between four leading voices in the discussions on poverty reduction and foreign aid: Dambisa Moyo, Hernando de Soto, Stephen Lewis, and Paul Collier. While the debate was formally set up to be Moyo and de Soto against Lewis and Collier, in reality it emerged to be an ideological debate between Moyo and Lewis, with Collier bridging a sort of middle ground, and de Soto on everyone’s side but advocating a different approach to the argument.

The debate was well run and civil (for the most part), which allowed each of the participants to develop their argument and respond effectively to their opponents. Lewis outlined the amazing victories of aid, such as decreasing child mortality and the HIV/AIDS death rate, building schools, decreasing hunger, reducing malaria, vaccinating children, and providing education. He also preemptively addressed Moyo's argument by pointing out that in the last 10 years aid has become more focused and active among the people rather than just being handed out to the government, increasing its effectiveness and advancing towards the goal of decreasing poverty. Hernando de Soto’s remarks gratefully thanked all of those who advocate for aid and selflessly give so much to developing nations, but stated that that is not enough. Capital needs to be raised by introducing property rights and protecting business deals, as well as helping the poor.

Collier entered the debate stating simply that aid is a useful tool, but not the only one. Aid should be used in conjunction with improvements in other areas (security, trade, and governance) in order to bring the “Bottom Billion” up to converge with the rest of society. Furthermore, aid needs to be targeted and conditioned to the accountability of the governance of a particular nation. Finally, Dambisa Moyo outlined her argument on the evils of aid, stating that Africa is poorer now than it was 40 years ago despite $1 trillion of aid. Moreover, aid has decreased growth, fueled corruption, encouraged inflation and debt, killed entrepreneurship, and destroyed the export market. She ended by stating that her argument was not for immediate, direct removal of aid, but rather a weaning off of it, for no other nation in the world has ever risen out of poverty with an indeterminate amount of aid.

This debate was particularly interesting because both sides were arguing very similar ideals, just in different ways. While it is most likely true that Moyo would not oppose to complete removal of aid, she does argue for a weaning and a transition, something Lewis agrees with simply on a different time scale. Furthermore, they all agreed that the situation in Africa is not sustainable, aid cannot be indeterminate and it must be done in addition to other techniques. Aid should also be targeted towards increasing sustainability through encouraging entrepreneurship and infrastructural development. Finally, the African leaders must take ownership of their own development, accountability for their actions, and leadership in their affairs in order for their nations to emerge from poverty.

- Kaj Pedersen is an intern with the Pasadena Office of Bread for the World.  He is a student at Claremont McKenna College.

 

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