June 16, 2005

Debt Sentence


From Reuters: Bush pledges to speed up aid to Africa:

President George W. Bush told African leaders on Monday he would "work harder and faster" to accelerate aid to the region under a heavily promoted but little-used program after they complained the system was too bureaucratic. ...

Bush went into the meeting having turned down a proposal by British Prime Minister Tony Blair to give Africa as much as $50 billion a year by making long-term aid commitments that would allow poor countries to raise money on global capital markets.

Bush and Blair did work on a debt relief plan for Africa that finance ministers agreed on in London over the weekend, before a Group of Eight [G8] summit next month in Gleneagles, Scotland. Under the deal, about $40 billion in debt owed by 18 of the world's poorest nations, including 14 in Africa, will be canceled.

"We believe by removing a crippling debt burden, we'll help millions of Africans improve their lives and grow their economies," Bush said.

From Mens News Daily: Capitalism Is the Cure for Africa's Problems by Andrew Bernstein. (Via Harry Binswanger)

The current plan of George Bush and Tony Blair to send billions more in aid to Africa is futile. History demonstrates that brutal dictatorships and savage tribes engaged in internecine warfare are not transformed by handouts. After all, billions of dollars have already been poured into Africa. What Africa needs is freedom, not welfare. The West should reject the idea that it is our responsibility to lift Africans out of their poverty -- and then tell them of the system that enabled the West to gain its current wealth and power: capitalism.  ...

Africa has the identical natural resource fundamentally responsible for the West's rise: the human mind. But it has neither the freedom nor the Enlightenment philosophy of reason, individualism and political liberty necessary for creating wealth and health. Africa is mired in tribal cultures that stress subordination to the group rather than personal independence and achievement. All over the continent brutal dictators murder and rob innocent citizens in order to aggrandize themselves and members of their tribes.

What Africa desperately needs is to remove its political and economic shackles and replace them with political and economic freedom. It needs to depose the military dictators and socialist regimes and establish capitalism, with its political/economic freedom, its rule of law, its uncompromising respect for individual rights. And to accomplish that, it first needs to remove its philosophic shackles and replace tribal collectivism with a philosophy of reason and freedom.

UPDATE -- June 17: From the South African Institute of International Affairs: The private sector, political elites and underdevelopment in Sub-Saharan Africa by Moeletsi Mbeki. (Hap tip Barry Rab.)

In the model described above the underlying assumption is that private individuals are free to pursue their search for security and comfort and they therefore own and control the means of achieving their objectives. They are assumed to be free to exchange what they produce without let or hindrance and that where they are able to make savings, they are free to retain those savings and plough them back in improved techniques or in other investment avenues as they may wish.

This is not the case with the private sector in Sub-Saharan Africa. Africa’s private sector is predominantly made up of peasants and secondly, of subsidiaries of foreign-owned multinational corporations. Neither of these two groups have the complete freedom to operate in the market place because they are both politically dominated by others -- non-producers who control the state. Herein lay the weakness of the private sector in Africa that explains its inability to become the engine of economic development. Africa’s private sector lacks political power and is therefore not free to operate to maximize its objectives. Above all, it is not free to decide what happens to its savings.

Posted by Forkum at June 16, 2005 02:54 PM