Why Live8 was stupid, another perspective

[Troubleshooter]

http://www.reason.com/0507/cr.ma.cry.shtml

Cry the Beloved Continent
Africans are poor because they’re poorly governed
Melinda Ammann

The Shackled Continent: Power, Corruption, and African Lives, by Robert Guest, Washington, D.C.: Smithsonian Books, 288 pages, $27.50

At independence in 1964, Zambia’s people earned an average annual income, in 2001 dollars, of just $540. By 2000, according to the World Bank, they made only $300. This was despite foreign aid the bank estimates at nearly $6 billion from 1980 to 1996 alone.

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“In 1980, the average annual income in Zimbabwe was $950, and a Zimbabwean dollar was worth more than an American one,” Guest reports. “By 2003, the average income was less than $400, a Zim dollar barely bought a fiftieth of an American cent, and the Zimbabwean economy was in free-fall.” An ominous reminder of who’s to blame hangs on the wall of every government office, in every hotel lobby, and above the cash register of every shop: Mugabe.

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Such policies have had a predictably deleterious impact on foreign investment in Zimbabwe: No one wants to invest in a country where the few who have managed to hang on to their assets are frantically looking for an exit. Zimbabwe is now an economic basket case, its borders bleeding economic refugees.

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Along with letting the outside world in, Africans must be invited to compete in global markets on an even playing field. Subsidies to rich farmers and tariffs on food imports to rich countries are an unbearable burden for Africa. According to Guest, “farm subsidies in rich countries are running at a billion dollars a day. This is roughly the equivalent of the entire GDP of sub-Saharan Africa.” Farmers in rich countries “sometimes are paid to grow stuff. Other times they are paid to stop growing stuff that they’ve grown too much of because they were paid to grow it.” Surplus food is dumped on African markets, lowering the prices that African farmers can get at home. Opening agricultural markets to exports from Africa by eliminating tariffs and subsidies that shelter rich farmers overseas could make more difference for Africa than any aid program.

Guest’s prescriptions boil down to common sense and Econ 101. The only way Africa can prosper is by offering products and services that people want to pay for.

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