Wednesday, May 26, 2010

There Are Some Problems Profit-Driven Aid Won't Solve

Free condoms in Africa key to halting the spread of HIV

Though the George W Bush administration of the United States offered remarkably few accomplishments that the global conservative movement can be legitimately proud of, one of the successes Bush can very much boast about is his administration's success in fighting HIV/AIDs in Africa.

Bush's Afrian HIV/AIDs initiative offered free medical treatment and HIV medications to HIV sufferers. His program gave hope to HIV patients and to their children.

However valuable Bush's initiative was, it did suffer from notable weakness: it cut funding to condom-distribution programs.

Cameron's government has produced as its first foreign aid initiative a plan to spend nearly three million Pounds Sterling to distribute condoms in Uganda.

Writing in the Daily Telegraph, however, Alex Singleton casts his barbs at the HIV/AIDs initiative being prepared by British Prime Minister David Cameron's government. His criticism casts it as a hippie-esque solution to a looming epidemic, and suggests that the distribution of 45 million condoms in Uganada should instead be be profit-driven.

Singleton writes:
"No one wants HIV/AIDS to spread, but free distribution will never work. As Professor William Easterly, the eminent development economist, has argued, there’s no shortage of Coca-Cola in Africa, and condoms should be treated in the same, for-profit way."
William Easterly has been on the right track about a great many things in Africa. But on the topic of condoms, he is very clearly wrong.

There's a good reason for this: Condoms are nothing at all like Coca-Cola. Nor are they like mosquito nets. In White Man's Burden, Easterly remarks on the failure of programs to deliver free pesticide-treated mosquito nets to Africans at risk of contracting malaria from nocturnal mosquito bites.

Easterly documented cases of many of these nets simply being wasted -- in some cases being used as veils at the marriages of young African women. Easterly's argument was that programs to deliver these nets were ill-conceived, and resulted in many areas being over-supplied with mosquito nets.

In come cases, they would up in the hands of corrupt local officials who instead merely hoarded them, despite having no means to ever use them on their own.

Provided that the Tory condom plan is better designed than the mosquito net programs, one would expect that these condoms would actually reach their destination. Considering that Uganda's population is more than 31.5 million people, 45 million condoms is unlikely to over-supply Ugandan demand.

It's more likely to under supply it.

Singleton astoundingly suggests that the success many roadside vendors have had selling Coca-Cola products demonstrates that for-profit distribution of condoms will better ensure their distribution.
"Coke and other soft drinks are vital way of getting something drinkable in rural africa, and tens of thousands of entrepreneurial Africans sell them out of wooden shacks and by the side of roads. The drinks are affordable, but by charging, Africans are able to make a living distributing them."
The dubious merits of substituting Coca-Cola for fresh drinking water aside, Singleton has seemingly forgotten one of the cardinal rules of market economics: profit-seeking capital will go where there is profit to be earned.

Simply put, if there were profit in selling condoms in Africa, Sheik or Trojan would have set up shop there a long time ago. There would be no need to even consider a state-funded condom initiative in Uganda.

Singleton could certainly argue that the state could subsidize the for-profit distribution of condoms in Africa -- an option that the Conservatives may well want to explore before forging ahead with their current plan.

Moreover, as oral contraceptives do nothing to protect against the spread of HIV, a profit-driven distribution method may be more appropriate for those.

But this doesn't seem to be Singleton's option of favour. Rather, what he recommends is almost guaranteed to fail:
"The Department For International Development opposes abstinence-only AIDS-awareness programmes. Instead, it is supposed to support the ABC technique of preventing HIV – abstinence, be faithful, use a condom. But, in practice, DFID-funded projects are surprisingly quiet on the A and the B – staffed, as they are, by politically correct workers who think telling poor people to stop having sex with prostitutes and other peoples’ wives is racist."
While Singleton insists there is evidence that the acceptance of birth control by African women leads to domestic abuse (he doesn't actually site any), he conveniently ignores all the evidence that abstinence-only programs simply do not work.

People won't abstain from sex just because you tell them to. That holds no less in Africa than it does anywhere else in the world.

Former US President George W Bush laid the groundwork for significant success fighting HIV in Africa. Now, David Cameron's coalition government is prepared to fill in the missing link -- Alex Singleton's objections be damned.



    Watched an interesting clip on Charlie Rose on May 25, 2010

    Carl J. Schramm, an American economist.

    "local entrepreneurial activity" is necessary.

    He cites in the 70's no Economists believed India, China would be capable.

    Chales notes thousands of Chinese, Indians came to the US to learn "how we did it" and they are still coming.

    He also talks about the link between ownership, freedom they are linked.
    Dambisa Moyo
    Dead Aid

  2. I'm not disputing that the free-everything aid model doesn't work.

    What I'm disputing is that the for-profit-everything aid model won't fail just as badly, particularly when it's used for initiatives to which it isn't appropriate.


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