00604-- DEAD AID—WHY AID IS NOT WORKING AND HOW THERE IS A BETTER WAY FOR AFRICA by DAMBISA MOYO Book review (summary)

DEAD AID—WHY AID IS NOT WORKING AND HOW THERE IS A BETTER WAY FOR AFRICA by DAMBISA MOYO  [Book review]

Title: DEAD AID—WHY AID IS NOT WORKING AND HOW THERE IS A BETTER WAY FOR AFRICA

Author: DAMBISA MOYO

Publisher: FARRAR, STRAUS AND GIROUX

Thesis

Dead Aid by Dambisa Moyo argues and proves that billions of dollars in aid sent from wealthy countries to developing African nations has NOT helped to reduce poverty and to increase growth. 

Author

Dambisa Moyo was born and raised in Zambia.  She has a Ph.D. in economics from Oxford University and a master’s from Havard University.  Moyo was a consultant for the World Bank, and worked at Goldman Sachs for eight years.

Dambisa Moyo

In the introduction Moyo writes: “This book is not a counsel of despair.  Far from it.  The book offers another road; a road less travelled in Africa.  Harder, more demanding, more difficult, but in the end the road to growth, prosperity, and independence for the continent.  This book is about the aid-free solution to development: why it is right, why it has worked, why it is the only way forward for the world’s poorest countries.”

The Myth of Aid

What makes Africa incapable of joining the rest of the globe in the twenty first century?  For Moyo the answer has its roots in aid.  There exist three types of aid: 1) humanitarian or emergency aid, 2) charity-based aid, and, 3) Systematic aid. 

The systematic aid means that the aid payment is made directly to governments either through government-to-government transfers (called bilateral aid) or transferred via institutions such as World Bank (multilateral aid).  Here Moyo concentrates on systematic aid because it is where billions of dollars are transferred each year directly to poor countries’ governments.  There are a number of drawbacks in the ways by which the first two types of aid are implemented.  But the charity and emergency aid are negligible in comparison with the billions transferred in systematic aid. Moyo states that there isn’t much difference between the loans and grants provided to Africa. She writes: “Therefore, for the purpose of this book, aid is defined as the sum total of both concessional loans and grants.  It is these billions that have hampered, stifled and retarded Africa’s development.  And it is these billions that Dead Aid will address.” 

A Brief History of Aid

The subtitles in this chapter are:

a)      The 1960s: the decade of industrialization

b)      The foreign aid agenda of the 1970s: the shift to a poverty focus

c)      The foreign aid agenda of the 1980s: the lost age of development

d)      The foreign aid agenda of the 1990s: a question of governance

e)      The foreign aid agenda of the 2000s: the rise of glamour aid

f)       We meant well

Under the subtitle We meant well Moyo writes: “It (aid) remains at the heart of the development agenda, despite the fact that there are very compelling reasons to show that it perpetuates the cycle of poverty and derails sustainable economic growth. […] Aid is not working. And here is why.”

In the next chapter Moyo explains why aid is not working.

Aid Is Not Working

The subtitles here are:

1.      Does aid work?

2.      The Marshall Plan

3.      The IDA graduates

4.      With conditionalities

5.      Aid success in good policy environments

6.      Aid effectiveness: a micro-macro paradox

The proponents of aid point to six proofs that aid can work effectively.  But Moyo, in this chapter, exposes the ways with which aid annihilates the possibilities of the emergence of a self-sufficient economy.  One by one Moyo successfully refutes the arguments in favour of aid.  She lays down examples that leave no ambiguity in the mind of the reader. 

She gives the example of a mosquito net maker in Africa.  He manufactures around 500 nets a week.  He employs 10 people, and each one of the supports upwards of 15 relatives.  But they can’t make enough nets needed in the market to combat the malaria-carrying mosquito.  Now enters the scene a Hollywood movie star who manages to collect and send 100, 000 mosquito nets to the afflicted region.  The nets arrive and are distributed.  But now the mosquito net maker is put out of business as the market is flooded with foreign nets.  His ten workers become unemployed and thus their 150 dependents now have to depend on hand-outs.   Moyo writes: “…and one must not forget that in a maximum of five years the majority of the imported nets will be torn, damaged and of no further use. This is micro-macro paradox.  A short-term efficacious intervention may have few discernible, sustainable long-term benefits.  Worse still, it can unintentionally undermine whatever fragile chance for sustainable development may already be in play.”

Towards the end of this chapter Moyo writes that this book would not have been written had the aid done what it claimed it would do. She concludes, “In fact aid is the problem.”

The Silent Killer of Growth

The title of the 4^th chapter is self-explanatory.  The silent killer is none other than the aid.  The subtitles in this chapter are:

I.                    The vicious cycle of aid

II.                  Corruption and growth

III.                Aid and corruption

IV.                Aid goes to corrupt countries

V.                  Why give aid if it leads to corruption?

VI.                Corruption: positive or negative?

VII.              Aid and civil society

VIII.            Aid and social capital: a matter of trust

IX.                Aid and civil war

X.                  The economic limitations of aid

·         Aid reduces savings and investment

·         Aid can be inflationary

·         Aid chokes off the export sector

·         Aid causes bottlenecks: absorption capacity

XI.                Aid and aid-dependency

XII.              Aid objections

Moyo in this chapter introduces Peter Bauer who was one of the earliest critics of aid.  He was a Hungarian-born London School of Economics economist.  Bauer argued that aid interfered with development as the money always ended up in the hands of a small chosen few, making aid a ‘form of taxing the poor in the west to enrich the new elites in former colonies’. 

Part two of the book is titled A World without Aid. Moyo gives the example of The Republic of Dongo which as an African nation faces all kinds of threats varying from HIV-AIDS to civil war.  She believes Dongo will only change if its fundamental modal of aid-dependency is abandoned and the Dead Aid proposal of this book adopted wholesale, in its entirety.

A Radical Rethink of the Aid-Dependency Model

1.      Governments need cash

2.      Weaning off the addiction: no one said it would                                                                  be easy

A Capital Solution

1.      Rebounding from a default

2.      Can Dongo tap the markets

The Chinese Are Our Friends

1.      Why FDI does not flow to Africa

2.      What does Dongo need to do to attract FDI?

3.      The Chinese are our Friends

4.      Objections to China in Africa

5.      They’ve got what we want, and we’ve got what they need

Let’s Trade

1.      Dongo can benefit from trade

Banking on the Unbankable

1.      Remittances

2.      Savings

Making Development Happen

1.       Grasping the nettle

2.      Who will bell the cat?

In the Foreword Niall Ferguson writes:

“Moyo offers four alternative sources of funding for African economies, none of which has the same deleterious side effects as aid.  First, African governments should follow Asian emerging markets in accessing the international bond markets and taking advantage of the falling yields paid by sovereign borrowers over the past decade.  Second, they should encourage the Chinese policy of large-scale direct investment in infrastructure.  (China invested US$900 million in Africa in 2004, compared with just US$ 20 million in 1975.)  Third, they should continue to press for genuine free trade in agricultural products, which means that the US, the EU and Japan must scrap the various subsidies they pay to their farmers, enabling African countries to increase their earnings from primary product exports.  Fourth, they should encourage financial intermediation.  Specifically, they need to foster the spread of microfinance institutions of the sort that have flourished in Asia and Latin America.  They should also follow the Peruvian economist Hernando de Soto’s advice and grant the inhabitants of shanty towns secure legal title to their homes, so that these can be used as collateral.  And they should make it cheaper for emigrants to send remittances back home.”

Moyo ends the book with an African proverb:

The best time to plant a tree is twenty years ago.

The second-best time is now.

00472--IGNITED MINDS: UNLEASHING THE POWER WITHIN INDIA / APJ ABDUL KALAM /PENGUIN BOOKS /BOOK REVIEW /SUMMARY

TITLE: IGNITED MINDS: UNLEASHING THE POWER WITHIN INDIA

AUTHOR: APJ ABDUL KALAM

PUBLISHER:PENGUIN BOOKS

APJ Abdul Kalam's book Ignited Minds is but the reflection of the mind of a great visionary and humanist. The very name of APJ has now become the synonym for optimism and hope. If one looks deeper it is love that makes him dream for us. This book is the manifestation of positive energy, and as you move along with Kalam you realise that the annihilation of negative energy is happening. There is perfect harmony between the author and his work; a great author and a great work. It is said that Johnson the man was greater than Johnson the writer. But Shakespeare's works are great in themselves. Here Kalam's work Ignited minds is great in itself.

In the preface Kalam writes: “This book is all about breaking away from the forces that would prefer us to remain a nation of a billion people selling cheap labour and raw materials and providing a large market for goods and services of other nations.” He continues, “As it is said, Thinking is the capital, Enterprise is the way, Hard work is the solution.” Kalam himself tells us about the style of writing he used in the book and in a way justifies that the message which needs to be conveyed requires such a style. He writes: “ You will find in this book plain speaking: Surge ahead as a developed nation or perish in perpetual poverty, subservient to a few countries that control the world politically and economically.”

The book is divided into nine chapters:

1.The Dream and the Message,

2. Give Us a Role Model,

3. Visionary Teachers and Scientists,

4. Learning from Saints and Seers,

5.Patriotism beyond Politics and Religion,

6. The Knowledge Society,

7. Getting the Forces Together,

8. Building a New State, and,

9. To My Countrymen.

The Dream and the Message

On 30 September 2001, Kalam was on his way to Bokaro from Ranchi in Jharkhand and the helicopter carrying him crashed just before landing, but all the passengers escaped miraculously. Despite the incident Kalam went ahead with his programme. At night he took a tranquillizer as the doctors persuaded him to do so. The drug made him sleep longer though he woke up at night and fell into a dream like thought; a thought that was centred on the humanity. Five great men took part in that thought process and they spoke out their minds. Mahatma Gandhi, Albert Einstein, Emperor Asoka, Abraham Lincoln and Caliph Omar were these great men. Each of them shared their views on humanity in general and as their importance that spreads beyond their time and social context these views sound universal.

Kalam discusses different stages in one's life:

1. athlete stage,
2. warrior stage,
3. states-person stage, and,
4. spirit age.

These stages in a man's life is also applicable to a state. Kalam logically describes how a nation passes through these stages. It is amusing that he calls himself a rocket man! Here he narrates his journey as a rocket man living these stages one by one (being in his fourth stage). He would like to converse with the school children for he believes they are tomorrow's India. He ends the chapter saying,”How can we make up for missed opportunities and the failures of the past?”

Give Us a Role Model

India is spiritual and the west is materialistic, Kalam believes that the progress of the developed nations is due to their way of thinking that they must live a good life in a strong and prosperous nation . He emphasises the need for change in India's way of thinking which views wealth and progress as opposite to virtue and spirituality. "I do not think that abundance and spirituality are mutually exclusive or that it is wrong to desire material things."  One can lead a life of asceticism but this should be out of choice and not because one is forced to do so.  "This was the basis of my decision to contact our young. To know their dreams and tell them that it is perfectly all right to  dream of a good life..."

Kalam met students in Tripura, and their question was that where do they get a role model from.  Father, mother and school teacher are the first role models for an individual, Kalam explains his this notion with examples.  'Why dream?' was another question asked to Kalam referring to his book Wings of Fire.  'Dream transforms into thoughts.  Thought result in actions', was his reply.   

Visionary Leaders and Scientists

Kalam shares with us his thoughts about some ancient mathematicians like  Aryabhata, Brahmagupta and Bhaskaracharya.  Great minds like Srinivasa Ramanujan, Prof.  S.  Chandrasekhar, C.V. Raman and others are also brought before us.  Dr. D.S.Kothari, Dr. Homi.J.Bhaabha and Dr.Vikram Sarabhai are portrayed here as great visionary scientists.  They are the founders of three great institutions--DRDO, DAE and ISRO.  There is a beautiful incident in the book narrated even more beautifully by Kalam, which describes how Dr. Bhabha met the Bishop and got the consent for acquiring the land where the church building stood as part of establishing the space research station in Thumba.     He ends this as follows ;  In the Sunday morning service the Bishop told the congregation, "My children I have a famous scientist with me who wants our church and the place I live for the work of space science and research.  Science seeks truth that enriches human life.[...] Children can we give them God's abode for a scientific mission?"  'There was silence for a while followed by a hearty "Amen" from the congregation which made the whole church reverberate.'  

Learning from Saints and Seers

The fusion of science and spirituality according to Kalam will do good for the humanity.  He had a detailed discussion with Pramukh Swami Maharaj of Swaminarayan Sanstha at Ahmedabad regarding this fusion, and the vision we should have as a nation.  He made several visits to different spirtual centres of India and sought for solutions.  Kalam Summarises this chapter; 'Our spiritual wisdom has been our strength.  We survived as a nation the onslaughts of invaders and the numbing effects of colonialism. [...] But in the process of all the adjustment, we also lowered our aims and expectations. We must regain our broad outlook and draw upon our heritage and wisdom to enrich our lives. [...] We need to home-grow our own model of development based on our inherent strengths.  

   Patriotism beyond Politics and Religion

"For great men,"  Kalam writes, "religion is a way of making friends; small people make religion a fighting tool."   The answer Kalam gives to a student at Anna University for the question that deals with Dr. Amartya Sen's stance against India's nuclear programme is logical and convncing.  Kalam asks,  "But after the long independence struggle when we got our freedom and the country got united and has physical boundaries, is it possible to remain with economic prosperity as the only goal?"     Patriotism must not be polluted by religion or politics.  

Bernard Shaw

George Bernard Shaw said “Patriotism is your conviction that this country is superior to all other countries because you were born in it.”   I was aware of this definition for a long time, and so when coming across Kalam's remarks on patriotism I paused for a while.  Kalam, I believe, thinks not of being superior to any other nations  but of being NOT inferior to.  Shaw is ideal but Kalam is practical. Shaw wrote books while Kalam made missiles.  In fact Kalam has writen books that are being sold well.  Hitler too was a patriot.  But it is obvious that Kalam is different kind of a patriot. Shaw excluded the good ones though he (Shaw) was a vegetarian. 

Kalam observes; "The greatest danger to our sense of unity and our sense of purpose comes from those ideologists who seek to divide the people. [...] It is when we accept India in all its splendid glory that, with a shared past as a base, we can look forward to a shared future of peace and prosperity, of creation and abundance. our past is there with us forever.  It has to be nurtured in good faith, not destroyed in excercises of political one-upmanship."

The Knowledge Society

In the twenty-first century capital and labour are replaced by knowledge as the primary production resource.  For Kalam a very important mission for India is to become a knowledge super power.  Ancient India was more than anything else a knowledge society, and naturally it fostered civilization.  Today India should regain the lost status of being a nation and civilization founded on knowledge.  

Getting the Forces Together

Kalam writes; " In India 2020 we have identified five areas where India has a core competence for integrated action."   These five areas are;
1.  agriculture and food processing,
2.  power,
3.  education and healthcare,
4.  information technology, and,
5.  strategic sector.

On 15 October 2000 a website was launched for Kalam.  He posted three questions; 
1)  India has been a developing country for more than half a century.  What would you as young boys and girls like to do to make it a developed India?

2)  When can I sing a song of India?
3)  Why do we love anything foreign in spite of our capabilities in many fields, whereas other countries celebrate their own successes?

From more than a hundred answers he received he discusses five answers.  The fifth answer is what the 30 per cent of the respondents said; 'the need for  greater transparency in various facets of our lives.'   This chapter is rich with the narration of incidents Kalam has had in his life. 

Building a New State

Kalam in this chapter shares an incident which shows the power of human mind.  He was to submit the design drawings for a project on designing a low-level attack aircraft.  But Kalam got delayed by more than two weeks in submitting his drawings.  Dr. Srinivasan was the Director of Madras Institute of Technology, and he realizing that Kalam was nowhere near completion of the drawing told Kalam that if he did not complete the work in three days his scholarship would be stopped.  Kalam was fully depending upon the scholarship, for the cost of education at MIT was high.  For the next three days he went out only for food and at night slept on a bench in the college.  Exactly after three days Dr.Srinivasan visited Kalam's drawing board.  He spent an hour examining what Kalam had done and said, "This is good.  You have performed a few weeks' work in a few days."   Kalam writes; Coming from, it was a great compliment. [...] I realized then that if something is at stake, the human mind gets ignited and working capacity gets enhanced manifold.

Building a new state must be carried out in a mission mode.  

To My Countrymen

I think it will be appropriate to include this chapter in the syllabuses of all Indian Universities and schools. He ends this chapter as follows:

"And to God the Almighty!  Make my people sweat.  Let their toil create many more Agnis that can annihilate evil. Let my country prosper in peace.  Let my people live in harmony.  Let me go to dust as a proud citizen of India, to rise again and rejoice in its glory."

END