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FACTBOX-Delivery problems, pitfalls undermine effective aid
31 Aug 2008 10:20:04 GMT
 Source: Reuters
Aug 31 (Reuters) - Ghana hosts a high-level meeting on aid effectiveness from Tuesday to Thursday which will bring together ministers and representatives from more than 100 countries, both donors and recipients of aid.

Senior officials from multilateral development and financial agencies, including the International Monetary Fund and the World Bank, will also take part in the High Level Forum on Aid Effectiveness in Accra.

The meeting will look at ways to make international aid work better for the world's poor, who have been badly hit this year by soaring prices for food, fuel and other basic necessities.

It will review progress made in applying the so-called Paris Declaration on Aid Effectiveness issued after the last meeting in the French capital in 2005.

THE PARIS DECLARATION ON AID EFFECTIVENESS

The Paris Declaration sought to improve the delivery and management of international aid in order to enhance its effectiveness in helping the world's most needy.

It spelled out a global commitment organised around five key principles for international aid:

* Ownership -- recipient countries should lead their own development policies.

* Alignment -- donor countries should tailor their aid to the development strategies of recipient countries.

* Harmonisation -- donor activities should be more harmonised, transparent and collectively effective.

* Managing for results -- decisions and managing of resources should be results-focused.

* Mutual accountability -- both donors and recipients are accountable for development results.

WHY AND WHEN IS AID NOT EFFECTIVE?

Aid organisations like Britain's Oxfam say a number of problems, pitfalls and obstacles can obstruct the effective delivery of aid to those who most need it:

Oxfam says that rich countries are often failing to deliver their own aid targets, which means that hundreds of millions of dollars worth of aid are simply not being made available.

In addition, other factors hamper the effectiveness of aid:

LACK OF COORDINATION

-- Aid is often uncoordinated and delivered without the knowledge and collaboration of recipient governments. This can lead to proliferation, confusion and overlap of aid projects, the "Tower of Babel" situation often cited by critics.

* Oxfam estimates that out of nearly $45 billion of aid promised in 2007 to support government plans, only $10 billion actually passed through government budgets.

* Vietnam alone had 752 donor "missions" in 2007 -- more than three missions per working day.

* Uganda had to deal with 684 different aid instruments and agreements from 40 different donors between 2004 and 2007.

INFLATED COSTS

-- A large proportion of money in aid projects is often spent on costs and salaries, for example for high-priced foreign consultants chosen by donor rather than recipient countries.

* Oxfam say "technical assistance" accounts for one fifth of all aid, 20 cents in every aid dollar.

* Donors in Mozambique were spending $350 million a year on 3,500 technical consultants, almost five times the total annual salaries of 100,000 public sector workers in the southern African state.

* Senegal's President Abdoulaye Wade has criticised some aid NGOs as being "greedy gobblers of aid resources, absorbing the best part of this through all kinds of schemes, in administration, travel and luxury hotel costs for so-called experts -- rather than spending on actions".

BAD TIMING

-- Aid often arrives either too late or not at all, the projects or funding for them are often too short-term and volatile and do not take enough account of the long-term needs and strategies of recipient countries.

* Zambia in 2007 received just $606 million of the just over $900 million of aid promised by donors, and donors have delivered only $15 billion of the $25 billion promised Afghanistan in 2001, according to figures given by Oxfam.

* Another British charity, Merlin, which supports health projects, said that one three-year programme for a hospital in Democratic Republic of Congo ended up being backed by three separate 12-month funding proposals, which created some problems with implementation. It feels donor funding should be longer term and more predictable. (Sources: Oxfam, Merlin)


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