"For God's Sake, Please Stop the Aid!"

There's an interesting interview in German magazine Spiegel with Kenyan economics expert James Shikwati who says to stop the aid. A couple of reasons:

1. Huge corrupt, complacent bureaucracies form around this aid. (both in Africa and among the organizations built to "help" but who ultimately would have to close down if their help were no longer needed).
   
2. Africans are taught to become beggars and not to be independent. African nations should be trading within themselves (which would also be a huge environmental gain as we reduce the impact of huge worldwide shipments).
   
3. Weakening of the local market and reduction in the incentives for entrepreneurship.

One of the biggest problem, as pointed out, is that the item most shipped over is the one thing all Western nations heavily subsidize (and what all Africa actually has a competitive advantage in): food. The other "problem" is AIDS, both the realistic problem and the perverse incentive for those countries to exaggerate the problem so as to keep their biggest "business" working.

Why a command economy never works

And just because I love his cartoons, Michael Ramirez has his pulse on the situation:

Well, it seems like the craze over biofuels is finally ending. Hailed as a great idea and with tons of government pushing for more investment, we see insane worldwide inflation, especially for foodstuffs. President Bush asks for $770 million more in world food aid. The new United Nation top adviser on food, Olivier de Schutter, quite simply calls any further investment in biofuels "irresponsible." However, he's much more calmer that the prior guy, Jean Ziegler, who called biofuels "a crime against humanity." Of course, once they killed all investments, we're back to our next problem: there will be a glut in global food prices everywhere and we'll see farmers everywhere starving yet again.

How many times do we need to see that once the government decides that it is going to "help", there is a huge bubble and then a massive self-correcting shock before we stop playing this game? Now it is biofuels, it was housing a decade ago, telecommunications before that (AT&T as a monopoly), the airline industry (just let something die!) and going back in American history, the railroads (leading to the "robber barons" and the need for antitrust regulation).

[Note: to top it off, Nobel Prize winner Norman Borlaug (leader of the Green Revolution) has a Wall Street Journal OpEd telling the Bush Administration to use actual foreign aid, buying food in Africa for Africans, rather that this disguised domestic aid nonsense the US does]