Trade or Aid?

There has been a certain amount of debate in the press about the effectiveness of aid I read this, provocatively titled, article a while back now Do Starving Africans a favour and don’t feed them. The general view is that aid projects simply have not helped people as much as we had hoped. Rather they have enabled corrupt regimes to ignore the real problems of their people and in many ways it has created a dependency culture. If you think this article is hard core, I have read others by Neo-cons that were far more forth right about it.

I don’t personally think that we can seriously walk away from people in real need, if people are starving we have to do something toi help. But it does make you wonder. So I’m was really interested to hear a lecture by Lord Griffiths, he’s a big cheese at Goldman Sachs and before that was an academic economist. He was saying that despite much research, there is no causal link been found between the amount of aid poured into a country and the eradication of poverty. At the end of the day, it’s business that will ultimately fix that problem.
What’s more he reckons that pound for pound of investment, economies get more wealth and job creation from investing in small Medium Enterprises – SME’s as they say in the trade. It seems the world over, banks won’t lend to them and it’s tough to raise finance, but when they do things can really happen. Makes you think what you should really be doing with your charitable giving!?

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