After Dead Aid, Dambisa Moyo does not choose to rest on her laurels. Her campaign aiming at providing a better grasp of Africa's prospects in a global world continues in a more relevant and meticulous fashion. Her new book, Winner Take All: China's Race for Resources and What it Means for the World, is a blatant proof showing that the international success of Dead Aid was not a result of random happenstance. Dambisa Moyo is deep, her new book is very insightful; however, I argue that her thought should not got unchallenged.
In Dead Aid, Moyo is blunt. She argues that the cause of Africa's precarious conditions is aid, mainly concessional (non-emergency) loans and grants. Over the years, $1 trillion of development aid went to Africa from Western governments through a variety of channels. But, Africa has not been better off. Hence, aid, according to Moyo, is the cause of poverty in Africa.
To me, this is a pretty bold statement, and I am afraid that it does suffer from a type of logical fallacy known as "the post hoc fallacy," one that confuses correlation with causation. But notwithstanding this logical shortcoming, the existing positive correlation between aid and poverty (i.e., more aid, more poverty) in Africa is suggestive. Why on earth over the past thirty years, the most aid-dependent countries, according to Moyo, have enjoyed growth rates averaging minus 0.2 per cent per annum. Between 1970 and 1998, when aid flows to Africa were at their peak, poverty increased from about 12 percent to a shocking 66 percent. Africa's real GDP per capita today is lower than that in the 1970s, "leaving many African countries at least as poor as they were forty yeas ago." Is not that a clear signal that something is amiss? Yes indeed. And, Moyo seems to come to grips with the missing point. Why developed countries through international institutions such as World Bank and IMF keep doing the same thing despite the fact that aid policies have been falling short of expectations? The response, according to the native of Zambia is that: the number of people employed in World Bank, IMF, UN agencies, and a myriad of registered NGOs is about 500,000. They are all in the business of aid. So, readers that are bewildered by the relationship between aid and development in Africa and elsewhere (in Haiti for instance) can now draw their own conclusion!!!
In Winner Take All, Moyo's crusade continues. China that once was a friend, a much better one compared to the Western counterparts (see Dead Aid, Chapter 7: Chinese are Our Friends), should now be kept in the loop if we are to secure a common and better future for the world. Why? Because China's seemingly unstoppable desire to keep up with its economic development will have global consequences for all of us. China's rush for commodities around the world, particularly in developing countries with a specific focus on Africa is, Moyo contends, unprecedented in history, outstripping even the insatiable demands for raw materials sparked by the eighteenth century Industrial Revolution. China is buying up mountains in Peru and lands in Africa with the sole intention of anticipating the considerable challenges presented by a resource-scarce future. Given that the world resources - water, copper, mineral, and other foodstuffs - are scarce, there are reasons to be scared. Moyo urges other world power to be more proactive because if China is left alone, it will have an incentive to determine on an arbitrary basis the price of these commodities and hence disturb the market mechanisms. This is what economists call monopsony.
If China's rapid campaign for resources continues at this pace, Moyo foresees an ominous situation characterized by a swift surge in commodity prices, which in turn will lead to worsening living standards across the globe. And, "in the extreme", the story goes on, "as resource scarcity becomes more biting, commodity shortages could lead to outright war."
Moyo's book that purports to examine the economic implication of China's ascendancy as the lead buyer of the world resources, presents some very unpleasant facts. While I don't want you to be overwhelmed by a great deal of details, I think it is worthwhile to mention the followings (and please bear with me): of what the world disposes as lands, only 11 percent (or 1.4 billion hectares) is arable - suitable for crops. The other 89 percent, unfortunately, is essentially composed of mountains and deserts, thus making its exploitation for food production highly unlikely. The landscape is more distressful when Moyo presents the density of people per unit of arable land, which according to her is more accurate than population density - the number of people per unit of area of land. For instance, Moyo reckons, with a world of roughly seven billion for a 1.4 billion hectares of arable land, the situation in an ideal planet is not threatening because if land were evenly distributed, every five people would share a hectare of land. That would be wonderful, no fear of scarce resources and I am sure that Winner Take All would not even exist. But, since the world's land is unevenly distributed in a sense that while some countries possess lots of arable land to dedicate to food production, others have relatively less. China epitomizes this reality perfectly. With its world's largest population, China has only around 12 percent arable land. So, China's unmatched relationship between supply and demand of natural resources is what explains the country relentless endeavors to control the world resources.
Now, to what extent should we take Moyo's concerns, alarms and appeals at face value? Are we truly living in a Malthusian world? Is this really the crucial problem facing mankind? I must acknowledge that these questions do not by any means intend to underestimate Moyo's preoccupations. To some extent, I believe that she put forward legitimate points that we should take into account in a holistic approach to the world challenges. However, the above questions can stimulate (prospective) readers to go over Moyo's oeuvre with a fine-tooth comb. When one reads Winner Take All with a more critical thinking, we are inclined to wonder: What about human's abilities to devise ways to cope with these issues? Inasmuch as it is not the first time that likewise fears are projected, and to the extent that mankind has always created efficient ways to cope with them, it is legitimate to wonder whether Moyo's arguments are not inflated.
By reading the book, you might have your own point...
After all, I commend Moyo for such a well-done job...