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05/27/2005:

"Scandal of 'phantom' aid money"

Well-heeled consultants and companies in the west are the beneficiaries of a global aid system which results in less than 40p in every pound helping to eradicate poverty in the developing world, according to a report out today.
Just over a month before Britain will make a doubling of aid a centrepiece of the Gleneagles summit, the charity ActionAid said the bulk of the money currently allocated was wasted, misdirected or recycled within rich countries.


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It found that 61% of aid flows were "phantom" rather than "real" - rising to almost 90% in the case of France and the United States.
The report accused rich countries of "political grandstanding" and highlighted the ways in which they were disguising how real aid flows were even lower than they appeared to be.

"Failure to target aid at the poorest countries, runaway spending on overpriced technical assistance from international consultants, tying aid to purchases from donor countries' own firms, cumbersome and ill-coordinated planning, implementation, monitoring and reporting requirements, excessive administrative costs, late and partial disbursements, double counting of debt relief, and aid spending on immigration services all deflate the value of aid," the charity said.

Compared with a UN target of spending 0.7%, rich countries were ostensibly spending 0.25% of their national income on aid each year. The figure came down to 0.1% when "phantom" aid was stripped out.

The G7 countries - Britain, the US, Germany, Italy, France, Canada and Japan - spent only 0.07% of national income on real aid and would need a tenfold increase to hit the UN target, ActionAid said.
Full: guardian.co.uk

Puts a whole new spin on the Blair/Brown aid crusade doesn't it.