On its road to world dominance China has embarked on a pioneering initiative which is the Asian Infrastructure Investment Bank (AIIB). China as the founding member has deposited $100B. This is sure to become a game changer in the development banking world as IMF and World Bank are no longer the only option for emerging markets. To understand how this is going to affect Africa we look at two African doctors; Dambisa Moyo of the western ideology and Bodomo with his statistics and Chinese based experience.
Moyo wrote a controversial book whose tale centered on the usual main stream western media narrative of Africa. She made her rounds on the speaking circuit as she patronized Africa and declared that it was time for a new model since all Africans did was to sit in around waiting for hand outs from the western world. She was applauded by the likes of Steve Forbes and all those media outlets who had finally found a black face to sell their story. Her book was well received in the backdrop of the insurgency of what is known as the tea party in the US. The tea party is a group of people who aspire to engage the world with the idea of American domination and despise collaboration or recognition of the global world with emerging markets.
Moyo, is a Harvard trained economist who has worked for Goldman Sachs from where she got her ideas. Moyo’s theories in a nutshell are about advocating for African countries to borrow from private banks and investment firms like Goldman Sachs rather than development banks. Moyo’s measure of success for African economies is foreign investment by western investors and bond markets and indebtedness to westerners in the name of development.
On the other hand, Hong Kong based Professor Adam Bodomo like most researchers has been studying Africa and is the director of the African Studies program at the university of Hon Kong. Bodomo’s studies using World Bank data shows that Africa’s story is about remittances not aid spurring growth in these emerging African economies. This fact is corroborated by the fact that when the tea party started to control the Congress in the United States they wanted to flex their muscles since they hold the purse strings in the US governement. Undoubtedly they had drank Moyo’s kool aid and wanted to teach these dependent, irresponsible Africans a lesson or two. To their amazement aid was only a measly 1% of the US budget and unlikely to make the dramatic impact that they had been hoping for. The reality was that countries such as Japan were bigger aid donors to the African continent, how about that?
In Egypt still believing in Moyo’s aid theories the US tried to flex its muscle by threatening to take aid from Egypt unless it complied with certain requests. Saudi Arabia stepped in and offered the same aid package to Egypt. This move changed the balance of power and the US quickly realized that their aid was not sufficient to control Egypt and have since reversed their decision. They learned a powerful new word called mutual dependency.
Bodomo found from World Bank Statistics created by westerners that remittances rather than aid is the major resource in Africa. Though Moyo’s aid cheerleaders say numbers do not lie they do not believe World Bank data and instead focus on baseless narratives that are not affected by facts. Certailny, people are entitled to their opinions but certainly not to their own facts. World Bank Statistics used by Bodomo show that Africans in the Chinese diaspora contributed between $800M & $8BN to Africa. Worldwide in 2010 Moyo’s aid was $43BN compared to remittances of $51.8BN. In 2012 the amount of remittance grew to $60BN and are expected to keep growing.
The answer to Africa according to Bodomo is how to engage the diaspora to contribute more actively in democratic process of their native countries. Creation of more businesses and African governments engaging those in the diaspora to bring their expertise back to Africa and start more businesses on the continent and increasing intra- continent trade area to be explored to spur development. Reducing cost of sending money is an urgent concern because according to Bodomo Africans pay the most in money transfer fees compared to any other group in the world.
In the US where Moyo has lived and was educated; the backbone of that strong economy are small businesses which make up 89% of the businesses in that country. Moyo and her western backers know this fact after all they are economists yet when they preach to African their prescription is big business. The West looks at Africa through the lens of Moyo and sees people relying on aid and handouts and do not want to change their own situation because they are too corrupt and lazy. China views Africans as a potential partner whose own people are empowering themselves to make a difference in their own lives and grab the bull by the horn and change their own destinies.
A few years from now Moyo and Forbes will undoubtedly still be speaking about Africa. Moyo trying to figure out how China surpassed the West in African investment. Forbes compiling its 100 wealthiest Africans list while China and Africa are making things happe.