John Hayward Posted: 12 March 2010
Keywords: Finance & the Economy, Government & Foreign Affairs,
A leaked United Nations report claims that up to half the food aid in Somalia is diverted to corrupt contractors, local UN workers and Islamist militants, including the terrorist group al-Shabab. This, I suggest, comes as little surprise.
I recall speaking with the auditor of a World Bank project when I was working in Central Asia, who insisted that she knew with certainty that at least $1m from a $3.5m project had 'gone missing' and was reasonably confident that the real amount that had not reached its intended recipients was about half the total.
One could blame the inefficiencies of a transnational organisation or the corruption endemic in undemocratic, often war-torn states. The latest Global Integrity Report identifies clear examples where ‘despite massive amounts of foreign aid, including a significant amount of aid for good governance and anti-corruption efforts, there is little evidence to suggest that ordinary citizens are benefiting from the proliferation of legal and regulatory reforms on paper.’ It concludes that foreign aid may not help anti-corruption enforcement in aid-dependent countries, giving credence to those who argue that ‘political leaders in aid-dependent countries are skillful at establishing laws and institutions to meet foreign donor requirements despite those same laws and institutions failing to deliver for ordinary citizens.’
Yet, even in the USA, the investigative arm of Congress, the General Accountability Office, concluded that up to 16 per cent of the billions of dollars awarded in aid by the Federal Emergency Management Agency to help victims of Hurricanes Katrina and Rita was unwarranted, instead being used to pay for season football tickets, a Caribbean vacation, adult erotica products, Dom Perignon champagne, and even a divorce lawyer.
In a discussion paper to be published later this month, the Maxim Institute argues that the motivations behind aid have a significant impact on the goals set and the way aid is conducted. In Untangling Aid: Complexities, challenges and ways forward for foreign aid, researcher Dr Jane Silloway Smith observes that while a humanitarian motivation to care for fellow humans is at the heart of a lot of giving, particularly private giving, the history of government aid is steeped in political motivations as well as charity. Understanding this history and the various philosophies that have emerged as a result, she says, helps us ‘untangle’ what we hear about aid.
The Institute has drawn together seven principles that should guide foreign aid and assistance work:
- humility, an acceptance that we do not have all the answers and an openness to learning from others, including those who we think we are trying to help;
- flexibility, a willingness to adapt to local conditions;
- setting measurable, realistic goals and clearly evaluating them;
- consultation and collaboration with recipients of aid at all stages of the process, from design through implementation to evaluation;
- knowledge of poverty and local conditions, the economic, social and environmental factors that contribute to problems in specific areas;
- specialisation of aid, recognising that government and the private sector and civil society are good at different things and have different strengths and skills to bring; and
- support of positive globalisation, facilitating movement of workers and not forcing progress as we think it should go.
As we head towards a general election, few people will be particularly concerned about foreign aid as an issue, especially as all the main parties are committed to achieving the UN’s Millennium Development Goal of giving 0.7 per cent GDP in aid. However, a much greater proportion have expressed concern over issues of social security, inequality and taxation. Perhaps this same set of seven principles would have equal relevance when it comes to distribution of welfare and benefit payments at home.


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