NYT calls for more aid for Africa

According to the New York Times lead editorial on April 25, Ghana is the new success story of Africa. Though still terribly poor, Ghana is a role model of stability. And its needs only…. you guessed it: more foreign aid. Tony Blair’s “Marshall Plan for Africa” is just the ticket, according to the NYT (by the way, the Marshall Plan was a huge failure in the UK, where it funded socialism, and France, where it funded French colonialism in Vietnam. And Germany thrived only after market reforms. A viewpoint on the topic is here: www.imfsite.org/abolish/betteroff.html. You can find an depth analysis in badly-scanned pdf file here: www.gmu.edu/jbc/Tyler/Marshall_Plan.pdf)

The NYT sees Ghana’s small budget as the problem: “Almost half of Ghana’s national budget comes from foreign aid; Britain is its largest single-country donor. But the size of the country’s budget, a scant $3 billion, supporting some 20 million people, is testament to just how far Ghana still has to go, and just how much more it still needs to climb out of poverty.”

The full NYT article is here: http://www.nytimes.com/2005/04/25/opinion/25mon1.html?.

Some questions I have: If $3 billion in annual gov. spending “supports” 20 million people, then that works out to $150 per person. Have I done the math right? The article claims most people in Ghana survive on $300 to $400 a year. Does that include the $150 a year in services the NYT implies they receive from their government?

Is it possible that the “scant” $3,000,000,000 a year in government spending doesn’t find its way to everyday Ghanian people as useful services? When economists calculate a country’s GDP per capital, do they include government spending? It would be double counting if government funds come from taxes. But if a significant part of government funds come from foreign aid (or from oil income), then this is money collected at least in the name of the people.

If Tony Blair’s call to double aid to Africa reaches Ghana, and if today it receives, as the NYT claims, $1.5 billion in aid (one-half of the budget), then foreign aid would reach $3 billions and the government budget would increase to $4.5 billion. Spending for government services per person in Ghana would rise to $225.

I hope people in Ghana ask what they get from their $150 a year share of government spending now. This knowledge would give them some insight into what services to expect from their government following a 50% increase in foreign aid

Link to full NYT editorial: http://www.nytimes.com/2005/04/25/opinion/25mon1.html?