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Big Think Interviews Dambisa Moyo

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A conversation with Dambisa Moyo, former Goldman Sachs economist and author of Dead Aid: Why Aid is Not Working and How There is a Better Way For Africa

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Dambisa Moyo:

Dambisa Moyo is an economist and New York Times best-selling author of Dead Aid: Why Aid is Not Working and How There is a Better Way For Africa, published in 2009.

Moyo’s second book entitled How the West Was Lost: Fifty Years of Economic Folly - And the Stark Choices that Lie Ahead is scheduled for publication in August 2010.

Moyo was born and raised in Lusaka, Zambia. She holds a Doctorate in Economics from Oxford University. In 1997, Moyo earned a Master of Public Administration (MPA) in International Development from Harvard University’s Kennedy School of Government. She also earned a Master of Business Administration (MBA) in Finance and Bachelor of Science (BS) in Chemistry from American University in Washington D.C. She worked for the World Bank as a Consultant and at Goldman Sachs where she worked in the debt capital markets and as an economist in the global macroeconomics team. Moyo's thoughts about ending aid to Africa are featured as part Big Think's "Dangerous Ideas" blog.

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TRANSCRIPT:

Question: What precipitated Africa's development problems?

Dambisa Moyo: The numerous factor is that have contributed to Africa’s economic development issues. I have decided specifically to focus on one of those which is basically policy, however, in the book I do talk about things like the historical context, issues of geography, the historical context in the sense of colonialism, for example, how that all may have to some extent contributed to the economic malaise that we see now across the continent.

However, the main issue that I am tackling in my work is that of aid, which is an active policy, where we as the international and global community have designed a specific policy towards supporting the economic development in Africa. So rather than things like geography and history, which are extensively outside the room of our abilities we’re really focused on very specific issue of aid to Africa and how that has been a negative factor in ensuring a long term economic growth.

Question: What is the current perception of aid to Africa?

Dambisa Moyo: I supposed in the context of my work, I think that there is this unstated view or unstated fact that aid to Africa has not worked. By that, I should clarify that there is essentially three types of aid. There’s humanitarian or emergency aid, which goes to actually assists during times of if there’s a tsunami or if there’s an emergency like an earthquake or flood. Then, there’s also NGO or charitable aid, which is very small amount of money that people send to African countries to support pretty much clear and defined projects such as providing a scholarship for girl to go to school.

There was two types of aid that I’ve mentioned. They can certainly help in terms of immediate band aid solutions, but they will not contribute to long term economic development in the sense that it will not help to get Africa to grow at sort of 10% or more per year, which would actually meaningfully which is poverty across the continent.

But those two types have a very different from the third type of aid, which is what I critic in the book, which is the large billion dollar programs of aid that go from governments to governments and also international institutions such as The World Bank to Africa. And tthat’s type of aid that I’m talking about.

Question: What's the history of aid in Africa?

Dambisa Moyo: The history of Aid in Africa or in the development of this course has its roots and actually began in Earnest at the Bretton Wood in the 1940’s, and essentially really took hold after the Marshall Plan, which was between 1945 and 1950. there’s a five-year program it was $13 billion which in today’s terms is about a $100 billion and really the idea was that the newly emerging African countries that were coming out of independence had no money to finance economic development.

So, the idea is very simple. That savings leads to investment which would lead to growth. The problem is that because this when new economies there was not necessarily any savings in this economy and so the idea was that you put aid instead of the savings. And aid should lead to investment and therefore, lead to growth.

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