Alpine Summit

Friday, July 08, 2005

Enabling 8

A column by Max Boot at the LA Times (oddly enough) talks about how pouring money down the bottomless gullet of Africa may not actually solve problems there. I know, I'm as shocked as you are... I thought throwing money at problems made them go away too... oh wait, I'm thinking of liberals. My mistake.

Economists who have studied aid projects have found numerous reasons for the failures. In many instances, money was siphoned off by corrupt officials. Even when funds did reach the intended beneficiaries, the money often distorted local markets for goods and labor, creating inflation that drove local businesses out of business.

It's interesting to think that actually throwing money at them is actually hurting them. It just doesn't seem logical. The more I think about it, though, the more I think they're right. This doesn't mean that all foreign aid is a bad thing, but when talking about third-world countries, a lot more needs to be done in terms of infrastructure before the money flow can begin. Yes, that includes getting rid of the warlords/dictators, but it also means developing the natural resources of the country and agricultural industry. The only way something on this massive of a scale could possibly be implemented is through a free market system (read: capitalism). I know the world bank takes a lot of flak for trying to do just this. Perhaps they have the right idea, but their implementation is a little misguided- I haven't read enough on the world bank to speak as an authority, but I think the concept is a good one.

In the last 50 years, $2.3 trillion has been spent to help poor countries. Yet Africans' income and life expectancy have gone down, not up, during that period, while South Korea, Singapore and other Asian nations that received little if any assistance have moved from African-level poverty to European-level prosperity thanks to their superior economic policies.

These countries actually took a pro-active stance in making their country better and opened their labor markets up to other countries. In fact, I don't think you can buy anything electronic without some part of it having come from Singapore or other until-recently-impoverished Asian countries. This, while North Korea and China has stagnated. Though, China is poised to make huge gains in the international market if they were to only open up and relenquish their death grip over their larger markets. Sure they encourage business; but, if it gets too big they just take it. I really don't understand all the investment in China. If I were any kind of major player in the investment world (knock on wood) I certainly wouldn't commit until China went to a free market system. Though they are drifting towards it more and more.

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