DEVELOPMENT: A Little Aid, A Big Favour

By Sanjay Suri Reprint | | Print |

Sanjay Suri

GLASGOW, May 26 2007 (IPS) - When, came the question from a Ugandan delegate at a Civicus world assembly meeting in Glasgow, will the West ever stop giving aid on unequal terms? “We are unequal by the fact that, speaking as a donor, we are providing the funds,” said Jan-Petter Holtedahl from the civil society department at the Norwegian Agency for Development Cooperation.

Plain speech there, and there has been a good deal of it at the civil society gathering. But Holtedahl added a sweetener. “We start from inequality but need to mitigate that by having a comprehensive dialogue.”

There were others. “Obviously there is in that sense a power relationship between the northern NGOs and the southern NGOs,” Sylvia Borren, director of Oxfam-Novib in the Netherlands told IPS.

It all depends on how you deal with power relationships, she said. “We as Oxfam Novib have 850 partners, and we think that by sitting together and saying what is your vision, what is your strategy, what is our vision, what is our strategy, and what are the opportunities we see, and can we come to enough common ground.”

But however politely that giving of aid is presented, it is in all instances a fraction of the money intended as aid. The variation lies in just how fractional it is.

The usual subtractions are 15 percent for the northern NGO from a donor agency or government, another 10 to 15 percent for the southern NGO through which that aid is channelled. That leaves about two-thirds or so for the beneficiaries. A fair-looking chunk, except that further subtractions must follow.

The money left over is “money to the programme, not necessarily the beneficiaries,” said Borren. “Some of the programme is about advocating our own governments, for instance, or advocating the EU, or advocating the World Trade Organisation. That is not getting directly into the hands of the programme participant.”

Subtract further. An ActionAid study on aid found that almost two-third of bilateral aid given is “phantom aid”. That money, John Samuel international director of ActionAid told IPS, “is being spent on technical support, which means advice and support by agencies and consulting groups in the donor countries.”

Within bilateral aid, substantial amounts in what is budgeted as aid money have been written actually to companies like KPMG and PriceWaterhouse Coopers at a high consultancy rate, said Samuel.

That profile varies vastly across countries. ActionAid found that the British and the Irish governments had among the best aid programmes; the United States and France were among the poorest.

The Department for International Development of the British government has “effective systems of transparency and accountability, a more international team, plus sensitivity and an understanding of the dynamics of aid,” Samuel said. “And it has offices in those countries; outside London, its biggest office is in Delhi.” And a big chunk of that aid goes directly to beneficiaries, he said.

In the USAID budget, some of the biggest beneficiaries are Afghanistan and Pakistan, where money goes to security issues, he said. Iraq is the biggest aid beneficiary, but very little of that money is benefiting people. “Only a miniscule part of American and French aid goes towards poverty eradication,” Samuel said.

Other familiar ghosts continue to haunt the aid business. Like fixing the books to write off debt cancellation as aid, after a green light for this kind of accounting by the Organisation for Economic Cooperation and Development (OECD), a grouping of 30 rich nations. That is not a mandate the OECD has been able to undo, despite progressive policies on many other fronts.

“There is additional duplicity when some of the rich say they have increased aid and decreased debt, because they cancel each other,” said Samuel.

The subtraction business goes on. Add up the subtractions, and the total that filters through as aid is not a very impressive fraction of the 50 billion dollars or whatever in aid that the rich nations like to proclaim in collective boast.

Yes, aid giving is unequal, as the Norwegian told the Ugandan. It is doubtful reassurance on all sides that the inequality here is not quite as much as people say it is.