David Cronin

BRUSSELS, Mar 28 2008 (IPS) – Rich countries have made patchy progress in honouring pledges to improve their contribution to the fight against global poverty, according to a new report.
In a declaration agreed at a 2005 international conference in Paris, 35 donor governments and many international agencies gave an undertaking to ensure that their development aid would become more effective. Among the commitments made were that poor countries would take the lead in determining how aid money is used, that aid activities by different governments or agencies would be better coordinated and that the often onerous bureaucratic procedures that recipients have to follow in order to obtain funds would be simplified.

Despite such promises, a report by the European Network on Debt and Development (Eurodad) has called into question whether aid programmes are being implemented in a way that is designed to genuinely benefit the poor.

Based on several case studies, the report alleges that France #39s aid strategy for its former colony Mali was drawn up in Paris without any meaningful input from Malian politicians, civil servants or social activists. The European Commission #39s aid activities were found to suffer from what Eurodad describes as heavy bureaucratic procedures. In Sierra Leone, local organisations were unable to access European Union funds because their applications did not meet the exacting technical standards demanded by the Commission.

Aid is still too often dominated by rich country agendas, said Lucy Hayes, the report #39s author.

Eurodad is especially critical of Spain for tailoring a programme aimed at relieving Honduras #39 external debt to benefit Spanish commercial interests.
Under an agreement that lasts until 2010, projects covered by a debt cancellation fund for Honduras have to be carried out by Spanish firms or organisations. However, the report recognises that a law approved by the Madrid parliament in 2006 sought to rectify the situation by stating that Honduran companies and organisations should be given priority.

The use of development aid to pay large fees to Western consultants has also been condemned.

For example, it was discovered that 46 percent of the 529 million dollars allocated by rich countries to Cambodia per year is spent on technical assistance, such as the hiring of consultants.

About one-third of the aid allocated to Nicaragua and Honduras is also spent on technical assistance.

ActionAid spokeswoman Laura Sullivan described as scandalous the use of money for purposes which are not focused on reducing poverty.

The Eurodad report argues that in general it is preferable for donors to funnel their aid directly into the coffers of recipients than to spend it on individual projects. Whereas aid to projects can lead to high transaction costs, budget support is considered by many social activists as a more predictable and dependable source of funding. Budget support is viewed as particularly useful in meeting recurring costs such as the salaries of teachers, doctors and nurses in countries where the health and education services are not satisfactory.

Louis Michel, the European commissioner for development, has expressed his desire to see half of all aid handled by his officials given in the form of development aid by the end of next year. But the Eurodad report suggests there is a widespread reluctance on the part of rich countries to resort to budget support.

While 42 percent of aid received by Mozambique over the past three years has come in the form of budget support, less than one percent of aid received by Cambodia was in that form. The corresponding figures for Nicaragua, Mali and Honduras were 7 percent each, while those for Sierra Leone and Niger were 11 percent each.

However, the report argues that it is reasonable for donors to make the provision of budget support conditional on recipients #39 improving their public accountability.

The Policy and Operations Evaluation Department in the Dutch foreign ministry recently assessed how 800 million euros (1.3 billion dollars) worth of budget support provided by the Netherlands to Africa in 1998 to 2006 had been used. It found that the money had helped to improve the poor #39s access to health and education. But it also found that a rule stating that recipients prove they are stamping out corruption before they receive budget support was not always respected.

Anti-poverty campaigners are urging greater transparency about how aid is spent. It is very hard for us to see what aid is coming into our country, said Christian Lawrence from the Campaign for Good Governance in Sierra Leone. Donors are not transparent enough about their aid and do not account to citizens in developing countries. Without good information about the money coming in, we cannot scrutinise whether it is being well spent.

The Eurodad report has been published ahead of an annual assessment expected from the European Commission in April on the performance of EU governments in improving the quantity and quality of the aid they administer.

A Commission spokesman said he was unable to comment on Eurodad #39s findings.