Within months of toppling their dictatorships, Egyptians and Tunisians have been promised significant financial help from the international community, with the Group of Eight leading economies most recently pledging £12bn in aid, loans and debt relief. The wisdom of heaping cash upon these countries has been taken for granted. In fact, it may do more harm than good.
The record of development assistance leaves much to be desired. In the past six decades donors have often sought to bring about growth by funding infrastructure, agriculture and social services, with little success. Development organisations too often follow a discredited central planning model when history is testament to the way in which the grand plans of the few rarely work, while the freedom of the many succeeds in lifting one society after another from poverty to prosperity.
The billions already pledged to help Egypt and Tunisia will again see well-connected officials dictate spending. They will doubtless embark on large investments, such as the plan presented to the G8 by a group of Tunisian technocrats aiming to spend $20-$30bn on transport, infrastructure and industrial zones to “open up and connect the regions of the country”. Yet it is not clear why Egyptians and Tunisians would want go down this road again, given the miserable record of similar initiatives, not least in Egypt and Tunisia themselves.
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