From: Biniam Tekle (biniamt@dehai.org)
Date: Thu Sep 04 2008 - 14:10:37 EDT
The future of aid
A scramble in Africa
Sep 4th 2008 | ACCRA
From *The Economist* print edition
Donors and recipients try to get to grips with the chaos in international
aid
AFPFood aid from the United States that also helps American farmers
THE development-aid business is a shambles. Privately, most of the 1,200
delegates at the grandly titled High Level Forum on Aid Effectiveness, which
met this week in Accra, agreed on that. The meeting was the first big
follow-up, involving 100-odd countries, international agencies and
non-governmental organisations (NGOs), to an accord on making aid more
effective, reached in Paris in 2005.
The main problem is not the one poor countries and NGOs usually complain
about: too little aid. In fact, official development assistance has been
rising modestly since the mid-1990s, in real terms and as a share of donors'
national incomes.
Rather, the problem is that aid is fragmenting: there are too many agencies,
financing too many small projects, using too many different procedures.
"Fragmentation is the opposite of effectiveness," says Lennart Bage, head of
the International Fund for Agricultural Development.
Little Eritrea, for instance, deals with 21 official and multilateral
donors, each with their own projects, budgets and ways of operating. Uganda
has 27. That is normal. According to the Organisation for Economic
Co-operation and Development (OECD), 38 poor countries each had 25 or more
official donors working in them in 2006. The number of aid projects financed
by bilateral donors has skyrocketed from 10,000 to 80,000 over the past ten
years.
NGOs are more numerous. Their explosive growth explains much of aid's
fragmentation. The UN reckoned there were 37,000 international NGOs in 2000,
a fifth of which had been formed in the 1990s. There are almost certainly
more now. Ethiopia plays host to 12 affiliates from Save the Children, seven
from Oxfam and six from Care International. NGOs are increasingly important
to the aid business. By one estimate, they spent $27 billion of aid in 2005,
compared with total official assistance of $84 billion. The Gates Foundation
had a budget of $3.3 billion in 2007—more than Norway, Denmark or Australia
spend.
This largesse is evidence of western generosity. But it is swamping poor
countries. According to OECD figures released in Accra, donors conducted
over 15,000 missions in 54 recipient countries last year. Vietnam played
host to an average of three visits each working day. So did Tanzania, whose
overstretched civil service produces 2,400 quarterly reports on projects a
year. Health workers in several African countries say they are so busy
meeting western delegates that they can only do their proper
jobs—vaccinations, maternal care—in the evening.
The Paris declaration of 2005 laid down a number of principles for making
aid work better, and drew up specific targets which donors and recipients
are supposed to meet by 2010. The aim of the forum which took place in Ghana
was to record how much—or little—progress has been made at the halfway
point.
Some of the targets are sensible and even stand a chance of being hit. It is
obvious that aid should help recipient countries but that idea is forgotten
when donors ring-fence their projects, using their own experts (not local
people) to build, run and evaluate operations. The Paris declaration aims to
cut the use of such parallel systems dramatically. Between 2005 and 2007,
their number did indeed fall, by about 10% in 33 countries. But big problems
remain. In Mozambique, says Oxfam, a British NGO, donors are spending a
staggering $350m a year on 3,500 technical consultants, enough to hire
400,000 local civil servants. "Aid should strengthen local capacity rather
than spawn parallel aid empires," says Robert Fox, Oxfam's top
representative in Accra.
Fragments of the imagination
Similarly, it may seem obvious that flows of aid should be recorded, so
recipients can know what they are getting, and scrutinise it. But in
practice this does not happen. One can measure how much aid is recorded
accurately and the share has risen from 42% in 2005 to 48% in 2007 (ie, only
48% of aid is properly accounted for). Again, an improvement, but still a
far cry from the target, which is 85% accuracy.
But the biggest problem is too many aid agencies, and the challenge is
co-ordinating them. In practice, national, multilateral and NGO donors
probably can't do more themselves than they do anyway, so the best way of
coping with the fragmentation of aid is for recipient countries to lay down
a set of national development priorities and ask donors to fit in with their
plans. That sounds fine in theory, but if recipients were serious about it
they would be expected to be saying no to offers of aid that don't fit in
with their plans. That hardly ever happens. The Paris target is for
three-quarters of recipient governments to publish development programmes
that aid agencies can use. Last year, according to a survey on monitoring
the Paris declaration, only a fifth did. Unless that improves, aid is likely
to remain badly fragmented.
Still, the picture is not all doom and gloom. One of the oldest problems
bedevilling the business is the practice of "tied aid" (ie, requiring some
of it be spent in the donor country). This increases inefficiency (tying is
reckoned to raise the cost of aid to the recipient by 15-30%) and adds to
the problem of fragmentation. So it is good news that Britain, Sweden,
Ireland and the Netherlands are untying their aid and that, in Accra, the
OECD revealed evidence that things are moving further in the right
direction. In 2002, 43% of official aid was untied. By 2006, the
no-strings-attached share had increased to 53%. A small but welcome step in
changing developing countries from "projects" to "partners".
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