Consultants are creaming off a staggering $20 billion from hard-won global aid
budgets. The $20bn total is 40 per cent of the international communities' overseas
development pot of $50bn - money that is meant to relieve poverty in developing
The World Bank has confirmed the figure for the first time: this weekend it admitted
that money spent on 'technical assistance' and consultants had increased by $2bn
on last year's $18bn total. A spokesman conceded that ballooning consultants'
fees 'need to be addressed'.
The news comes in the wake of a hard-hitting report by charity ActionAid, which
said that a huge proportion of aid was wasted, misdirected or recycled in rich
The focus on the effectiveness of aid coincides with the drive by Tony Blair
and Gordon Brown to persuade G8 countries to double aid to poor nations to $100bn
at a crucial meeting of world leaders in Gleneagles in five weeks.
Last week Brown managed to persuade European Union leaders to commit to a programme
that would see Europe's aid contribution double by 2010.
Campaigners are demanding that world leaders move to halve the figure of 3
billion people living on less than £1 a day, and dramatically improve
access to education, health and water to half the world's population.
'More aid is urgently needed to help poor people, but we must ensure that aid
is real and benefits those who need it, rather than lining the pockets of rich
people's consultants,' said Romilly Greenhill, policy officer at ActionAid.
Peter Hardstaff, head of policy at the World Development Movement, said: 'This
shocking £20bn figure is not just a waste of aid; it is also a back-door
route by the US and UK to force free-market policies which have demonstrably
failed in so many poor countries.'
The World Bank admission of what amounts to a crisis in the way that aid is
handled comes as Paul Wolfowitz, the controversial neo-conservative and architect
of the Iraq War, this week starts work as its president.
Wolfowitz will be closely watched to see whether he moves to prevent western
consultancies from profiting unduly from privatisations and the deregulation
of poor nations' key industries and utilities.
Wolfowitz's arrival at the bank comes at a pivotal time. Many see any proposed
increase in international aid as the last chance to seriously address fundamental
global inequalities. Since the 1950s, some $300bn has been spent on aid to Africa
while living standards have fallen.
In recent years, under the Bank's outgoing president James Wolfensohn, the
world's most important poverty alleviation institution toned down dogmatic neo-liberal
austerity programmes which were a condition of investing in poor countries.
But only last week it emerged that in a water privatisation project in Tanzania,
ordered by the World Bank, the UK private contractor was sacked by the government
for alleged poor service delivery.