Economic Success vs. Economic Failure
University of Arkansas at Little Rock
Economic Success vs. Economic Failure
Foreign aid is a controversial subject that has been debated by many scholars and politicians. The main area of discussion begins with the simple question; is aid hurting or helping countries in need? In the 1960s, the United States and other donors began concerted efforts to provide foreign aid to help the newly independent nations of Africa develop their economies (Bovard, 1986). Currently Africa is the largest recipient of foreign aid and “evidence of ineffective aid is spread all throughout” (Andrews, 2009). The two countries in Africa that are focused on, Botswana and Zambia have both been recipients of foreign aid; however their financial success is on opposite ends of the spectrum. Currently, Botswana stands out because of their economic success, while Zambia has suffered economically and relies on foreign aid. This paper discusses these two countries which are similar in many aspects while having two major differences, their financial position and success rate.
Foreign aid is defined as, “economic, technical, or military aid given by one nation to another for purposes of relief and rehabilitation, for economic stabilization, or for mutual defense.” (Dictionary) Consequently, there are three types of foreign aid; financial aid (grants and loans), food aid, and technical assistants. This information is essential to distinguish in regards to foreign aid in order to remain as accurate as possible when discussing it. Dambisa Moyo is originally from Zambia and she feels that foreign aid literally has caused the majority of Africa more hurt than help. She stated that “between 1970-1998, when aid flows to Africa were at their peak, poverty in Africa rose from 11% to a staggering 66%” (Moyo, 2009). There are many different factors that can play a part in such astounding numbers, however “more than 1 trillion in development-related aid has been transferred from rich countries to Africa in the past 50 years” (Moyo, 2009). To attempt figuring out why these statistics seem backwards, Botswana and Zambia will be compared by their history, cultures, and financial aid intake to learn what caused the switch. Republic of Botswana
To begin, Botswana gained independence from the British Government on September 30th, 1966. Botswana started out “among the ten poorest and least developed countries in the world in 1966” [ (Samatar, 1997) ]. This is astounding because they have “had the highest rate of per-capita growth of any country in the world in the last 35 years” (Acemoglu, 2001). Unlike many previous British colonies “Botswana inherited almost nothing in the way of physical and social infrastructure to enable it foster economic growth and development. Its per capita GNP at independence (1966) was less than $70” (Samatar, 1997). This being said, Botswana is truly a success story in Africa compared to most other African countries. They have a relatively small population that is “estimated around 2.06 million with an annual population growth rate at 1.5%” (Botswana, 2011). The type of government in Botswana is a republic, parliamentary democracy. There are three branches of government, Executive, Legislative, and Judicial. The President is both the chief of state and head of government. They have held free and fair elections since their independence. In 2010 their nominal GDP was at $14.8 billion. Real GDP growth rate (2010): 7.5%. Per capita nominal GDP (2009 est.): $6,200 (Botswana, 2011). The success in Botswana has been debated highly over the years and some critics suggest that “Botswana's "exceptionality" is due to its small, homogenous population and mineral wealth.” [ (Samatar, 1997) ] However, there are many other countries that have similar mineral composition such as Zambia, yet they still struggle and have to rely on foreign aid to function. Therefore, these...