President Kagame on aid

Paul Kagame, the President of Rwanda, writes about aid in today’s Financial Times:

Dambisa Moyo’s controversial book, Dead Aid, has given us an accurate evaluation of the aid culture today. The cycle of aid and poverty is durable: as long as poor nations are focused on receiving aid they will not work to improve their economies. Some of Ms Moyo’s prescriptions, such as ending all aid within five years, are aggressive. But I always thought this was the discussion we should be having: when to end aid and how best to end it.

… Often, aid has left recipient populations unstable, distracted and more dependent; as Ashraf Ghani, the former finance minister of Afghanistan, has pointed out, it can even sever the relationship between democratically elected leadership and the populace.

It seems to me that Dambisa Moyo has set up a false dichotomy between aid and entrepreneurship. Many of the things Moyo would like to see – better access to financial services, a better business environment, lower tariffs – can be (and are) supported by aid. We can and should use aid to support the growth of an entrepreneurial society; and we can and should use aid to support people in developing countries to enable them live better lives while the benefits of that economic growth are coming through.

My review of Dead Aid is here.

Kagame’s position is more nuanced than Moyo’s argument. He seems to be calling for a different kind of support from outside:

We appreciate support from the outside, but it should be support for what we intend to achieve ourselves. No one should pretend that they care about our nations more than we do; or assume that they know what is good for us better than we do ourselves. They should, in fact, respect us for wanting to decide our own fate.

… While this is encouraging, we know the road to prosperity is a long one. We will travel it with the help of a new school of development thinkers and entrepreneurs, with those who demonstrate they have not just a heart, but also a mind for the poor.

This is striking stuff from the President of one of the most aid dependent countries in the world, in which foreign aid is about $55 per person per year, or more than 25% of GDP.

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