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The Power of Money

Can Africa Be Saved by Private Aid?

By Marc Hujer

Private investors want to prove that development aid for Africa is money well invested. Wealthy philanthropists from around the world are funding more and more programs on the continent. And some of them seem to be working.

The real reason Bono was in Berlin was to talk about Africa -- about hunger, misery, AIDS and tuberculosis. But before the interview began, he started to sing: "It's one for the money / two for the show."

He was sitting at a table in a swanky Berlin restaurant, dressed in a black shirt, a black sports jacket, a black tie, and wearing his trademark wraparound orange sunglasses -- the eyewear that transforms this small man in crepe-soled shoes into the lead singer of U2.

He has earned millions of dollars with this voice -- Bono has a knack for singing the right song at the right time. He wanted to know if the recorder on the table in front of him was working. Then the show could begin.

He had just visited the chancellery where he had spoken with German Chancellor Angela Merkel. About Africa -- about hunger, misery, AIDS, and tuberculosis. It's always the same subject. His subject. Indeed, he is constantly on the road to drum up support for Africa. He has met with former US Ppresident Bill Clinton, with Microsoft boss Bill Gates, with current US President George W. Bush, even with the pope. Now it's Angela Merkel's turn.

The 0.7 Percent Benchmark

Bono wants the rich countries of the world to make good on their pledge to give 0.7 percent of their GNP as development aid to the poorest of the poor. None of the large industrialized nations has come even close to donating this amount. Today, only countries like Sweden, the Netherlands and Luxembourg have already reached the 0.7 percent benchmark.

Chancellor Merkel is chairing this year's G-8 summit in Heiligendamm, and Bono wants to convince her that she should act as a role model for the other leading industrialized nations and spend more money on Africa. It was undoubtedly not an easy discussion, given the many reservations about development aid. The industrialized nations have been providing aid for 50 years now. During that period, $2.3 trillion has been distributed to the world's poorest countries, but hunger and poverty persist.

Some analysts become infuriated when they hear the term development aid. They argue that aid has made Africa dependent on handouts, and stifled all initiative. William Easterly, a leading authority on development economics, says that development aid has been a "tragedy" -- that it has actually hurt Africa.

There appear to be no easy answers to Africa's chronic underdevelopment. In the first two decades following independence, Africa's fledgling nations saw themselves as the driving force behind their own development -- with miserable results. By the mid-1980s, many were poorer than when they had gained independence. A large number of governments could not even provide basic services. Roads and railway networks were crumbling, hospitals and universities had to close for lack of funds. Those who wanted to make something of their lives tried their luck in Europe or the US, while back home only the black market could guarantee survival.

Then bankers from the West turned their attention to the failed continent. In exchange for promises of political reform, the World Bank and the International Monetary Fund granted loan after loan. But Africa's political leaders were more concerned with maintaining their grip on power than with fueling economic growth, with a few exceptions like Ghana's Jerry Rawlings. By the end of the 20^th century, African countries had accumulated massive debts.

Bono's New Germany

Now celebrities like Bono and a new generation of aid workers want to prove that aid can produce results -- as long as it is backed up by the right concepts and strictly monitored. They want to dispel all doubt about the effectiveness of aid, and create a new sense that things are really moving forward in Africa. And Bono has become the continent's unofficial top lobbyist.

He heaps praises whenever he can. He speaks very highly of Merkel, and of the Germans. Bono is a constant charmer. He thinks it is "heroic" that, despite the high costs of reunification, Germany is still giving aid to Africa, and everywhere he goes, he wants to get to know the "new Germans" who are enthusiastic about life, pacifistic, and ready to lend a helping hand. "The 'new German' doesn't want war," says Bono. "The 'new German' wants schools to be built. The world needs these 'new Germans.'" Bono believes that after the Cold War ended a vacuum emerged and people yearned for a better world, for more environmental protection and aid for the poor in Africa.

There are many signs that something has changed. Africa has become an issue again, and it even sells products. German mail order company Otto now offers a new product range called "Cotton made in Africa." Bono has created the "Red" brand, which assures consumers that a share of the proceeds will go to the Global Fund to combat AIDS, tuberculosis and malaria in Africa. Apple, Armani, American Express and Motorola are all on board.

Bill Clinton is also doing his part as an ambassador for the continent. In addition, talk show host Oprah Winfrey is building schools in Africa and Madonna has adopted a child from Malawi.

"Our generation has a unique opportunity to make history," says Bono. "We have the money, we have the knowledge, we know the people who can help Africa. We can make it happen, with people like Bill Gates -- for me these are real heroes."

Bill Gates's home is thousands of miles away from Berlin, on the shores of Lake Washington, near Seattle. It has seven bedrooms, a boathouse, and a garage for his Porsche collection. He is one of 946 billionaires in the world today, compared to only 447 10 years ago. The rich keep getting richer and this could be Africa's saving grace.

They could save Africa all on their own, says developmental economist Jeffrey Sachs. There have never been so many technological possibilities, and, when measured by the income of the rich, effective aid has never required such a small sacrifice. "An annual donation of 5 percent would suffice," he says.

Bill Gates's African Clients

Company founders, bank executives and former politicians have entered into an alliance with pop superstars to find a higher purpose for their wealth. "The man who dies rich, dies disgraced," said Andrew Carnegie, the American cut-throat capitalist who established over 20 foundations.

And Gates is the richest of them all. He has been ranked number one on the Forbes rich list for years. Seven years ago he established the Gates Foundation, the largest charitable fund in the world. It spends $1.5 billion a year on health problems in developing countries. That is roughly equivalent to the annual budget of the World Health Organization. "The Gates Foundation could become the most important development aid organization in the 21^st century," says Sachs.

Gates wants to revolutionize development aid, just as he revolutionized the computer world. He is banking on research and technology -- and on development workers in business suits instead of sandals. And he has put his faith in a business plan for Africa, a new economy of good deeds.

He comes from a world of success probabilities and cost-benefit analyses, with little room for sentimentality. He doesn't talk about patients, he calls them "clients." Instead of referring to "child immunization programs," he says "Program 125" because it cost him $125,000. He wants to see verifiable results -- as fast as possible. He is now 51 years old and he wants to live to see things start to look up for Africa.