Why aid never reaches poor people

Aid activists Oxfam complained recently that “it is time for G20 leaders to stand up and deliver the money needed to protect poor people,” as heads of the world’s biggest economies met in Pittsburgh in September.

The real problem is that aid is actually rising but much of it never reaches poor countries and, when it does, it causes economic, social and political damage.

In fact, over $119 billion was budgeted for aid from rich to poor countries this year, up $16 billion from last year.

But about half of that stays with donors in “tied aid” and other domestic spending.  

“Almost 50p of every pound of donor aid fails to target poverty, but instead aims to meet other donor priorities,” charity and pressure-group ActionAid said in 2006, an estimate largely confirmed in 2008 by the Organisation for Economic Co-operation and Development (OECD).

Britain budgeted $8 billion for aid to countries such as Kenya, Uganda and Tanzania last year but recent research has uncovered numerous examples of waste and mismanagement within government.

The British government pays pressure groups to campaign and lobby governments abroad and citizens at home, at the expense of actual aid projects.

This year alone, the Department for International Development (DfID) put £140 million (about US$170 million) in its “communications” budget — much of it propaganda within the UK. By 2011, a total of £1 billion ($1.2 billion) of public money will have been spent on this. 

Most of it is given away in unrestricted grants to hand-picked activist groups, with little accountability and transparency – and, worse, little evidence that the programmes are helping the poor.

Many of these are at best controversial and often hostile to development.

ActionAid, for example, doing the “other donor priorities” mentioned above, used government funds to campaign against free trade, on one occasion stating: “There is very little evidence to support claims that free trade lifts people out of poverty.”

This assertion simply ignores all the millions of people around the world who have been allowed to escape poverty through freer trade after decades of economic oppression.

Anti-poverty campaigner Bob Geldof said this year that “probably the great unsung triumph so far of the twenty first century was the lifting of 400 million Chinese people out of extreme poverty—through trade”.

Ideological groups like ActionAid can only make things worse for the world’s poorest people, who already face high barriers to trade.

Some Western groups funded with “foreign aid” money lobby and pressurise developing-country governments to change their own policies.