Too much aid cash spent on consultants
Official aid figures make the world’s richest countries appear three times as generous as they really are, international anti-poverty agency ActionAid claimed today.
In a report (pdf) which calls for sweeping reform of the international aid system, the charity says the major industrialised countries exaggerate the real value of their aid by including extravagant spending on consultants and administration, and by double-counting debt relief.
ActionAid calculates that only one third of G7 official aid in 2003 was ‘real’ aid. The rest was ‘phantom’ aid which may have achieved other goals, but did not help to fight poverty. The least generous countries also have the least enlightened aid policies. Only 10 cents of every dollar of US aid is ‘real’ aid.
The UK, with 71% ‘real’ aid, is the G7’s best performer. But Luxembourg, Norway and Denmark, none of them G7 members, give far more aid relative to their wealth, and a high proportion of it – 81% in Luxembourg’s case – is ‘real’.
‘Among G7 countries the UK is the best when it comes to the proportion of its aid that really helps poor people,’ explained the organisation’s Patrick Watt.
‘But the UK still spends too much on expensive consultants and administration, and it inflates its aid figures by including debt relief. The UK needs to increase its aid to the 0.7% target by 2010 at the latest, and make sure that 100% of it is ‘real’.’
Researchers worked with ActionAid offices in Cambodia, Ethiopia, Uganda and Vietnam to observe how aid is spent. In Cambodia, they found that the cost of 740 international advisors was $50-70m – almost as much as the wage bill for the country’s entire civil service of 160,000 people.
But there were also examples of ‘real’ aid working for poor people. Well-coordinated aid helped Uganda to increase primary school enrolment by five million.
Action aid urges new accountability and the establishment of a UN commissioner to look after any new international agreement to ensure a fairer balance of power between donors and recipients.