In my last post, I explained my thoughts regarding medical voluntourism and whether the efforts we make actually constitute in positive changes for these communities. This week, I’ll be analyzing a similar issue of the millions of dollars that the West has donated and how it impacts the people in said countries. I’ll decipher whether financial aid helps or hinders development using Dambisa Moyo’s Dead Aid and Jeffrey Sachs’ The End of Poverty, two conflicting opinions and implications to help navigate through the debt crisis faced by many African nations.

Africa and aid are two words often seen side-by-side. At first, it portrays a positive connotation, symbolizing hope, stability, and prosperity, all of which are much needed across this neglected continent.

Across Africa, there is one universal definition of poverty. Poverty is the state in which an individual or family has to spend more than 80% of their income on food (Lorie Donelle, personal communication, March 18, 2014). Poverty can also be the state of one who lacks a certain amount of material possessions or money.

Additionally, in class became familiarized with the different types of poverty: economic poverty, instant or temporary poverty, new poor, hidden poverty, absolute poverty. Dambisa Moyo’s Dead Aid zeros in on how Africa’s debt-ridden countries are poverty stricken with “levels continue to escalate and growth rates have steadily declined—and millions continue to suffer.” (Moyo, 5) Moyo’s analysis focuses in on absolute poverty, defined as “the deprivation of all elements necessary to make an adequate healthy life” (Lorie Donelle, personal communication, March 18th, 2014) comparing African countries that rejected foreign aid and prospered to those that are burdened by aid and saw increased rates of poverty. Moyo believes that foreign aid has crippled Africa and in doing so the West has deprived it of its economic potential (Moyo, 3).

On the other hand, Jeffrey Sachs, a noted economist and professor at Columbia, believes that the West must strengthen its financial commitment to less-developed countries to regain power and prosperity. Regardless of further increasing national debts, Sachs suggests that without substantial financial support, little can be done to stabilize any developing economy (Sachs, XI).

Although these two are starkly different points of view on the utilization of aid, it allows us to delve deeper into the inherent controversies that surround aid initiatives globally. Through my own travels in East Africa, I saw how minimal development efforts were. In villages that were supposedly sponsored by World Vision donors, there was little to show besides an empty shade with their logo painted all over it. Talk about product placement. With that said, I don’t blame Moyo’s cynicism; she has seen billions of dollars lost in her native Zambia and how countries like the United States have risen to become superpowers based on their own tact and merit.

Sachs is not wholly wrong either though. In this day and age, countries that have been ravaged by colonialism and subsequently loss independence and social programming, including education, healthcare, and infrastructure. So, does financial aid help or hinder development? If the two bridge their mindsets, a third possibility arises.

Microeconomies can facilitate the conditions needed for individuals communities to ‘move out’ of a life of poverty. The Grameen Bank (Bangladesh) and Kiva (USA) are two examples of microfinance banks that provide loans and other funding opportunities to individuals at the grassroots level. This microcredit loan ensures accountability rather than a mere donation, which are often lost in administrative costs.
Kiva claims that 50-70% loans get repaid, and these funds can be directed to other channels worldwide ensuring that new start-ups succeed.

Putting the onus back on the grassroots levels leaves locals responsible for their health & wellness, education, safety & security, and a number of other social determinants of health. More money does not necessarily translate in more services, or better quality services. Locals will learn to work innovatively and efficiently within their own means to deliver the changes that their community, country, and the world need.

Through my travels, reading, and lectures I’ve learned that we must stop aid in order to reform aid. Rather than increasing our annual donations, we need to invest in opportunities in the Global South helping individuals at the grassroots levels. It’s about #tradenotaid.