Feature Article of Saturday, 15 November 2003

Columnist: Financial Times

The last thing Ghana needs is more rescuers

Sir, Michael Weinstein ("The economic paradox of Ghana's poverty", November 10) wrongly suggests that there is little that poor countries themselves can do to crawl out of poverty. He correctly points out that Ghana and South Korea had similar income levels 40 years ago, but have since gone in opposite directions. Korea's per capita income is today about $10,000. Ghana's is just $300. But Mr Weinstein suggests that the difference between the two is based solely on structural factors, namely high malaria rates and lower access to ports in Ghana. Geography may indeed be a factor, but surely policies matter as well.

Beginning in the 1960s, Korea pursued an outward export-orientated strategy and invested in a skilled workforce to achieve rapid industrialisation. At the same time, Ghana borrowed heavily for wasteful state-led industrial projects and virtually destroyed its two export bases by nationalising the gold mines and taxing its cocoa farmers nearly to death. By 1983, when Ghana began economic liberalisation with the help of the International Monetary Fund and other donors, the economy was in dismal shape and gold and cocoa production had shrunk to a tiny fraction of their immediate post-independence levels. Over the past two decades, Ghana has crawled back. Gold and cocoa production have recovered and economic growth has averaged nearly 5 per cent since 1984.

Mr Weinstein also implies that Ghana's poverty is caused by donor neglect, claiming that "Ghana's shot at success will remain remote until rich countries come to its rescue". But Ghana has received more outside assistance than perhaps any other country in Africa. As any trip to its capital, Accra, or a glance at the national budget will attest, donors are already deeply involved in the country and have been providing extensive aid and technical assistance for the past 20 years.

To be sure, Ghana is still a poor country and faces a range of developmental challenges. But it is neither wholly innocent in its predicament nor now facing these challenges alone. Most important, Ghana is far from helpless. If we have learned anything from the reams of research on aid effectiveness, it is that leadership by developing countries is essential. Ghana's leaders know they need to stick to the path of reform and develop more partners for trade and investment. What they certainly do not need are more rescuers.

tHE WRITER, Todd J. Moss: Research Fellow, Center for Global Development, Washington, DC 20036, US