I had never understood the difference between wealth creation and poverty reduction; I thought it was a matter of Semantics but the difference is as wide as an ocean.
I had never understood the difference between wealth creation and poverty reduction; I thought it was a matter of Semantics but the difference is as wide as an ocean.
Imagine if I asked you for Rwf 1,000 and you’d ask what it was for; if I said for "wealth creation” you would most likely walk away but if I said for "poverty reduction” then you would be more inclined to help me.
But the difference goes much deeper than that; it is a choice between either sustaining a problem while reducing its effects or ending a problem once and for all.
In another sense it is defined by political perspectives; a left-winger with a socialist outlook would see Africans as victims of a global capitalist system and would not want Africans to adopt a system that was apparently exploiting us.
A right-winger would aim for wealth creation which would initially benefit a few but would eventually trickle down to the masses.
The NGO charity industry would like to prolong our dependency on aid because as the saying goes "no turkey votes for Christmas” and they wouldn’t want to lose their jobs.
So this is an Aid vs. Trade dilemma; we all know the cliché of "Give a man a fish….” But history shows us why Western nations want to keep us in bondage.
The years immediately after World War II saw the global economy in tatters and America had to bail out the world; Britain, Germany, France and most of Western Europe was helped by the Marshall plan.
Japan and Korea were also helped but the assistance was so good that they soon were a threat to the very people who helped them; so the saying should be "Teach a man to fish and soon he’ll be better at fishing than you, he’ll even end up controlling the market in fish and you’ll regret you ever taught him how to fish.”
That is the problem that Western nations face; they want to reduce our poverty but not create wealth. It is like giving a man with a brain tumour Panadol without rooting out the tumour; it is wanting to do the bare minimum other than solving the problem once and for all. We all know the solution is fair trade but that would be economic suicide for Western Nations who have relied on a system rigged in their favour to maintain their privilege.
Demographics and global dynamics point to Asia and Africa dominating this century so the best the West can do is play for time.
Dhambiso Moyo wrote a classic book called "Dead Aid” and in it she says that any aid-dependant nation can come off aid in 5 years; it is a rather simplistic notion but one that we should aspire to none the less.
If a government seeks to make 10% savings a year then they in theory can be off aid in 5 years but the longer we are on aid makes it harder to come off it.
Currently in Rwanda most of our brightest minds are either in the NGO sector or government parastatals; the private sector is starved of innovators and young graduates who all aspire to be bureaucrats in safe jobs.
This is an effect of aid dependency; there is no incentive for us to develop a private sector because we have bought into the whole dependency mindset. When we think of a market we picture White people overseas but never see fellow Africans as a potential market.
We have bought into the myth that we are poor ‘blacks’ who have to be saved and we appeal to the "white man’s burden” to elicit the most basic help for our issues.
We need to trade with each other for example Rwanda contributes more to the Kenya economy than Britain but we never hear that.
We need to reduce our national budgets from today to stand any chance of coming off aid and most of all we need to learn how to fish otherwise we’ll end up ‘aid-aholics’.