Aid Corruption & Poverty

22 07 2008

It does not take long to dig up articles to confirm the link between corruption and poverty. Indeed governments and institutaions are very aware of the problem. The big question is how many are really addressing the issues?

Larry Elliot, edconomics Editor of the Guardian newspaper (UK) as recently as 24th June reported that, ” MPs fear corruption risk from poorly monitored aid.” The story said, “Parliament’s spending watchdog will warn the government today that lax monitoring of aid spending meant hundreds of millions of pounds of taxpayers’ money was at risk of corruption or being wasted.”

The committee chairman said, “Despite spending around one fifth of its bilateral aid in the form of direct payments to the governments of developing countries, DFID does not know how good an instrument this is in reducing poverty. Nor does the department know whether such support provides better value for money in reducing poverty than other forms of aid.”

And, it does not take long to find evidence of the additional problems that can be cause by badly managed aid programs. “Poorly directed aid increases Afghanistan’s woes” was the title of an editorial piece in the Observer newspaper (UK) yesterday. The article says, “Corruption and criminality, linked often to the very heart of government, is endemic. Despite $15bn in aid that has been disbursed, Afghanistan remains mired in pervasive poverty with unemployment standing at more than 40 per cent. The country’s position as one of the world’s poorest has barely shifted since 2001.”

With all the money invested it says, ” There have been some positive steps since the fall of the Taliban regime. Millions of children are in education in a country with a long history of high levels of illiteracy, particularly among women. A vibrant media, although under threat from many sides, also exist. Improvements have been made in the provision of healthcare. But this is not enough to persuade Afghans that much is getting better when they are confronted daily by criminality, violence, a predatory police force and an ill-educated and corrupted civil service.”

And the article goes on to say, “The hazard of throwing more money at the problem is that without a tighter focus to that spending, Afghans see the increased aid budget as an opportunity for a small elite of Afghans and a small army of international contractors and aid workers to enrich themselves still further. A further consequence is that, because it lacks a professional civil service to support the people, the aid community has shouldered the burden, inadvertently undermining still further the development of effective local services.”

I am not arguing that aid should stop, on the contracry it should increase. But, it is just as important to make sure that what is spent is used effectively, and certainly does not make existing problems worse. Corruption is a very complicated issue, but that is not an excuse for ignoring it. Ignoring it costs lives.

Institutions like Transparency International provide a great deal of help to aid giving and aid receiving countries. They have developed best practice guidelines for reform based on the latest research into the causes and effects of corruption. All governments would be well advised to take their adviseand adopt comprehensive anti-corruption policies. Advice is also available to private enterprise and to individuals who want to fight corruption.



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