August 16, 2002

August 16, 2002 | Commentary on Africa

ed081602b: African Aid Blues

Bono still hasn't found what he's looking for in Africa -- a place free of poverty and the disease and famine that often accompany it.

That's why the lead singer of the rock group U2 has crisscrossed the continent with several key Western policy-makers, including Treasury Secretary Paul O'Neill. While on these visits, Bono has touted his prescriptions to heal ailing African nations, namely that Western countries should (1) pony up more foreign aid and (2) forgive (read: forget) the millions of dollars in past loans these countries owe them.

Like quite a few other U2 fans, I've kept an eye on Bono's campaign -- and it's clear that he's finding an audience. At their annual conference this summer, the leaders of the world's eight richest nations spent more time discussing foreign aid and debt forgiveness for Africa than they usually do.

But it turns out that some of the African nations they and Bono want to help are singing a different tune to eradicate poverty -- free trade.

Among the people leading this small but growing chorus is Abdoulaye Wade, the president of Senegal. An economist by trade, Wade says he's never seen a country grow through foreign aid, no matter how much was provided. "Countries that have developed … have all believed in free markets," he says. "There is no mystery there. Africa took the wrong road after independence."
Hung a hard left, to be more precise: After gaining freedom from their European colonial masters in the 1950s and 1960s, most African nations adopted socialist-style governments that, with few exceptions, remain in place today. Even after their role model for socialism, the Soviet Union, tanked in 1991, they continued following the failed policies that helped cripple the former superpower.

Until now, few African nations seem to have realized that capitalism was the economic system that swept the world in the 20th century. But Wade and a small group of leaders, including Nigeria's Olusegun Obasanjo and Uganda's Yoweri Museveni, want to change this. They want to form governments that are smaller and support an environment where businesses can invest and operate freely -- just like in many Western nations.
Easier said than done, of course. First, Senegal and other nations must confront the legions of corrupt officials that have operated for decades -- officials well versed in the art of siphoning off large portions of the aid that Western nations send. Second, they have to form governments that follow the rule of law, not the whim of a tyrant.

Why are these steps not just a good idea but crucial to prosperity? Because before businesses will invest in a country, they must know that the country's government will, under a set of laws, enforce contracts and protect property rights. If businesses aren't convinced their agreements and their assets will be protected, they take their money elsewhere.

Unfortunately, sub-Saharan nations such as Senegal have a dismal record when it comes to enforcing the law and protecting property rights. According to the "2002 Index of Economic Freedom," an annual country-by-country survey published by The Wall Street Journal and The Heritage Foundation, Senegal has an average score 3.5 in the area of property rights. With 1 being the best and 5 the worst, that's pretty bad -- and it helps Senegal's economy earn the Index's "mostly unfree" label.

But there have been some promising signs in Senegal: After last spring's election in Zimbabwe, which was at best disputed and at worst stolen, Wade was the only African leader to condemn Zimbabwean President Robert Mugabe for flouting rules set up to govern the election, which he won by a lopsided margin. And two years earlier, when an audit conducted immediately after Wade took office found huge deficits in Senegal resulting from the misuse of funds, Wade sought out those responsible and punished them.

Wade and other African leaders who are trying to create conditions favorable for investment do need Western assistance, but they don't need handouts. They need trade-friendly policies, not the usual song and dance on foreign aid. It's the only way to steer them off "the wrong road" -- and put them on the path to prosperity.

Adam Wallace, a senior at Ohio Northern University, is an intern in the communications department of The Heritage Foundation (www.heritage.org).

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