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3314E (20)
Chapter

Political Science 3314E Chapter Notes -Dutch Disease, Cronyism


Department
Political Science
Course Code
Political Science 3314E
Professor
Radoslav Dimitrov

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WHY IS FOREIGN AID HURTING AFRICA READINGS
United nations is mandated to promote socially and environmentally sustainable towns
and cities with the goal of providing adequate shelter for all
The insidious aid culture has left African countries more debt-laden more inflation-
prone e and more vulnerable to the vagaries of the currency markets and more
unattractive to higher-quality investment
Aid is unmitigated political, economic and humanitarian disaster
Provide band-aid solutions to alleviate immediate suffering, cannot be the platform for
long-term sustainable growth
African countries still pay close to 20 billion in debt repayments per annum
No serious efforts have been made to wean Africa off this debilitating drug
Rampant corruption World Bank had participated in the corruption of roughly 100
billion of its loan funds intended for development
A nascent economy needs a transparent and accountable government and an efficient
civil service to help meet social needs
The aid system encourages poor-country governments to pick up the phone and as the
donor agencies for next capital infusion
Civil service is naturally prone to bureaucracy and there is always incipient danger of
self-serving cronyism and the desire to bind citizens in endless, time consuming red tape
What may appear as a benign intervention on the surface can have damning
consequences
Dutch disease a term that describes how large inflows of money can kill off a country’s
export sector, by driving up home prices and thus making their goods too expensive for
export
Civil clashes are often motivated by the knowledge that by seizing the seat of power, the
victor gains virtually unfettered access to the package of aid that comes with it
The ongoing political volatility across the continent serves as a reminder that aid-
financed efforts to force-feed democracy to economies facing ever-growing poverty and
difficult economic prospects remain, at best, precariously vulnerable
African countries could start by issuing bonds to raise cash
Governments need to attract more foreign direct investment b creating attractive tax
structures and reducing the red tape and complex regulations for businesses
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