To effectively tackle the root causes of poverty, governments must give more, and better quality aid to the poorest countries.  At present, too much aid fails to reduce poverty because it never leaves the donor country, damaging strings are attached to it, and governments don’t properly coordinate the aid they give. 

Rich countries committed themselves to use aid exclusively for poverty reduction at the UN Millennium Summit in 2000. But so far they’ve failed to deliver. Developing countries are unable to invest aid money in effective long term solutions because rich countries give them aid on an erratic, short term basis. Additionally a large proportion of aid is still tied to the use of services in rich countries, or simply isn’t directed to the countries most in need.

Strings attached

These problems are compounded by strings attached to aid money – often imposed by international institutions such as the World Bank & IMF. These ‘conditions’ are often used to push risky and unproven policies – such as water and energy privatization – which hit the poorest hardest. Where poor countries fail to comply with these conditions, rich countries withhold aid money.

Technical assistance

Technical assistance is an example of low-quality aid, where money is often spent on costly international consultants, research and training. Priorities are usually set by donor governments rather than recipient countries, and the use of outside ‘experts’ often fails to build local skills.

One quarter of the aid provided by rich countries - or $20bn a year – funds expensive and often ineffective consultants, research and training instead of going directly to the people who need it most.

Spending on western consultancies forms a major part of technical assistance. In the UK, for example, almost half of technical assistance spending goes on consultants and other experts, the vast majority to British companies.

What's the cost?

Expatriate consultants typically cost around $200,000 a year - more than one third of this is spent on school fees and child allowances. This spending would not be needed if local consultants were used, plus they bring an invaluable understanding of local culture.

In Cambodia, for example, consultants fees were $17,000 a month while government salaries were only $40. In Ghana, even relatively inexperienced consultants earned per day what government officials earned in a month. In Sierra Leone, according to one former UK-funded consultant, daily take-home pay was the same as the Auditor General’s monthly salary.