An Interesting Take On Aid To Africa

This one's quite thought-provoking. Does African aid do more harm than good? Speigel Online has an interview with a Kenyan economics expert, James Shikwati. Excerpt:

SPIEGEL: Following World War II, Germany only managed to get back on its feet because the Americans poured money into the country through the Marshall Plan. Wouldn't that qualify as successful development aid?

Shikwati: In Germany's case, only the destroyed infrastructure had to be repaired. Despite the economic crisis of the Weimar Republic, Germany was a highly- industrialized country before the war. The damages created by the tsunami in Thailand can also be fixed with a little money and some reconstruction aid. Africa, however, must take the first steps into modernity on its own. There must be a change in mentality. We have to stop perceiving ourselves as beggars. These days, Africans only perceive themselves as victims. On the other hand, no one can really picture an African as a businessman. In order to change the current situation, it would be helpful if the aid organizations were to pull out.

He's got some interesting things to say. Have a look.

Hat tip: Instapundit

The Nobel Peace Prize

Here's an excellent piece, by Alvaro Vargas Llosa at TCS Daily, on successful entrepreneurship in impoverished countries, and people getting out of poverty, and the Nobel Peace Prize actually going somewhere that doesn't reward duplicity, or incompetence. Cool.

Update: I just read the article to my husband, and he agrees with me that it's well worth your time. Really, go read this one. It's a wonderful look at how successfully the poor can help themselves if they are offered the opportunity of a modest investment, without undue hindrances to enterprise. This year's Nobel winner is, if you can believe it, a bank in Bangladesh, which is a strictly for-profit venture, and yet is transforming the lives of the poor. Llosa explains how Grameen bank contributes so much to the well-being of the community:

The bank lends tiny amounts of money to village-dwellers so they can start small businesses. The scale can be so modest as to involve the purchase of a cow in order to sell milk. Since no collateral or credit history is required, the system works on the basis of trust and peer pressure: Lenders are placed in groups of five, with part of the group guaranteeing the loans of the rest. If a loan is not repaid, the community shuns the borrower.

He goes on to explain how, after half a century of continually increasing foreign aid--rich country to poor country charity--the poor are actually worse off in the nations that have received the bulk of the money. Surprised? He also looks at the effects of entrepreneurial opportunity in poor communities, and concludes that this opportunity, not handouts which create dependency, is the key to improving conditions for the poor:

What the poor really want is an environment in which undertaking a profitable venture is not a nightmarish bureaucratic and legal process. The world is full of examples of poor and uneducated communities that have been able to create wealth thanks to entrepreneurship, rather than governmental assistance. I have been looking at cases of entrepreneurial success around the world for the past year and the conclusion is overwhelming: The best way to fight poverty is to eliminate barriers that currently hold back private enterprise among the poor.

Have a look. You might be encouraged, or surprised, or both.