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Welcome to STop, the Seattle Times Opinion blog where our editorial writers and editors share their evolving thoughts on a variety of issues. STop is a place where opinion writers and readers can exchange views and readers can learn more about how editorial positions are formed.

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June 07, 2005

Aid Africa? Try Investment

How to help Africa? Bob Geldof wants a benefit concert and British Prime Minister Tony Blair proposes a big increase in aid. I’m a skeptic about aid; I agree with Paul Theroux, who said in his book, Dark Star Safari, that aid to Africa has been like Christmas presents that are abandoned when the batteries burn out. What’s needed is for the Africans themselves to focus on the social and political values favorable to business, and build the local institutions that encourage people to save, invest and create enterprises.

In that regard, I had an interesting talk with Maria Cattaui, secretary general of the International Chamber of Commerce in Paris. She was not dismissing aid—she is for aid for specific, targeted things—but her stress is on what poor countries can do for themselves. The first thing, she said, is to reform their own politics and governance so that markets are open and investment is safe.

In the poorest countries of Africa, she said, “the private sector is hampered by the most extreme abuse from the government. And by ‘the private sector’ I don’t mean the three or four largest, favored companies” but business enterprises of all sizes. The abuse they face is, essentially, arbitrary demands. A quick-and-dirty way to get a measure of it is simply to take a car (or better yet, a truck laden with goods) across the country and see how many times, and by whom, you are required to stop and justify yourself. Cattaui says she has done this. “It’s really quite frightening,” she says.

Foreign investment can be important, she says, but “much too much emphasis” has been placed on it. The first thing is local investment. It is to retain the money that now flees. Make that safe and treat it fairly, and the foreign investment will come.

Respond to Bruce.

 
Posted by Bruce Ramsey at June 7, 2005 11:40 AM



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