Insulting and Foolish – Paul Collier on Refugees and Aid

A highly interesting interview with Paul Collier on refugee policy and development aid by Andreas Sator from DerStandard. Currently the British development economist is supporting the German government in changing their approach towards Africa.

Insulting and foolish

In our refugee policy we have been bringing the same model to perfection for 60 years: providing free food and free shelter in camps. But what has been appropriate in the 1950s is insulting and foolish today. Insulting, because it deprives people of their dignity by not giving them the opportunity to earn their living. Foolish, because it is expensive.

Displaced people like to stay in countries close to where they come from. Most importantly, they need the right to work. And instead of thinking in humanitarian silos, they need city-like settlements with a functioning power supply and other infrastructures, decent logistics  and a legal environment to be able to establish a proper business.

Europe and the West should do, what they can do best: send their companies to create jobs. And provide money. International companies should get incentives to set up production facilities in industrial zones close-by the big refugee settlements, e.g. in Jordan.

Development Aid

Collier looks at the stunning success of China in reducing poverty. What happened there, will happen in Africa.

“Scale and specialization is the only path we know to get out of mass poverty!” This makes productivity raise and allows people to increase their income.

“No country develops except through private investment.” In last 20 years we overemphasized the social agenda.

Thus, we should incentivize international companies to invest in African countries. For first movers it is always more risky and more expensive. That is why we should subsidize and support them.

“The answer is not to stop aid, but to spend aid sensibly!”

Listen to the whole interview here. The English spoken interview starts at minute 3:24:

In my book Der Schwarze Tiger – Was wir von Afrika lernen können I refer to the “flying geese model”. This is what Collier is describing, when talking about China and the industrialization of African countries.
Read here (in German only, sorry!):
Der Schwarze Tiger-Auszug Fluggaensemodell