Africa's plight will not end with aid

IN A week packed with news did you notice president Robert Mugabe’s declaration he is going to nationalise all the farmland in his already much blighted Republic of Zimbabwe? You do not need sophisticated economics to know the certain consequence will be starvation.

In many nations across Africa the institutions we in the West take for granted are entirely absent. The people of these miserable territories are not incompetent. They are the same as us. Without the rule of law, private property rights and an infrastructure for basic transportation, water, electricity and phones, we too would be a broken, diseased and starving people.

Africa’s horrors are not solved by sending aid. The word "aid" sounds kindly, even generous. It is pernicious. It mostly props up the bandit regimes. Mr Mugabe’s thugs rip off the labels of wheat or maize from the United States or European Union and re-label it as the benevolence of the dictator. The Sudanese government, too, routinely plunders aid consignments. At best, aid breeds a dependency culture; at worst it funds barbarism.

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What Africa needs is open markets where property rights exist, contracts can be enforced and exchanges can multiply. This was clearly the message of the Kenyan TV journalist Akinyi "June" Arunga as she travelled from Cairo to Cape Town in BBC 3’s The Devil’s Footpath recently.

More specifically, Africa needs a period in which major Western companies take over either specific roles over long periods or perhaps even entire territories. If this sounds condescending or "colonial" let me offer a European analogy.

Kosovo is in a sort of limbo. It is neither in Serbia nor in Albania. To stop the bloodbath, the UN is operating a sort of trusteeship. Diverse roles that are quite beyond the bereft civic institutions of Kosovo are being performed under long-term contracts or leases. In a career move he can never have imagined, the former Liberal Democrat leader Paddy Ashdown is a de facto governor general - even if he has no such title.

Let us take some specific examples. Sierra Leone had declined into a condition of utter desperation. The only policy initiative its leaders had was to cut off opponent’s limbs. The British sent in no more than a few platoons of troops and some sappers. The brutality ceased. Sierra Leone has the most marvellous port site in West Africa. It is rich in minerals; diamonds in particular. It is highly fertile. It can feed itself and export food, except the EU bans its exports.

Sierra Leone should be adopted by Scotland. My intentions are benevolent but they can be led by profit. Let the dynamic chief executive of Scottish Power, Ian Russell, take over its energy utilities. Let Scottish Water be contracted to open and extend its water supply. Paul Jowett would become a local hero.

Just abut every Edinburgh company could enhance life for the people of Sierra Leone.

Bechtel, the mighty and diverse US corporation, assumes contracts that are more like leases to run large projects under agreement. It runs airports, docks, generating stations and even sewage systems. This is not kindly but limp charity. Rather it structures a contract that ensures a profit. This is grown-up capitalism that delivers vastly improved public services on the one hand and a reasonable return on the other. There is little new in this suggestion. Canada is basically the creation of two companies - the Hudson’s Bay Company, based on the brisk trade in beaver pelts, and the Canadian Pacific Railway, a timber venture.

Assuming control of tracts of Africa is easily dismissed as "imperialistic". I’m not concerned to paint the map pink. My purpose is to rescue the almost countless millions from the butchery and misery that seems to be their fate. The good-hearted outfits such as Oxfam and Christian Aid are not going to rescue Africa. What Africa needs is capitalism - and its first cousin - the rule of law.

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Mr Mugabe’s people with their land ownership crushed will relapse into pre-industrial levels until it restores its markets. It is a vivid model of how not to run a country. Capitalism has a nobility. It lifts us all from primitive conditions. Free markets could free Africa.

The author is director general of the Institute of Economic Affairs.