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Paul Vallely: Distortions, half-truths and aid agencies

What has been lost is the integrity that once characterised the development lobby

Who guards the guards? One third of British aid is wasted - or so we were told yesterday by the campaign group ActionAid, which issued a report "revealing" that 29 per cent of the aid budget went on "phantom" aid such as "ineffective and overpriced" consultants.

But hang on. Look at the detail and you find that the report is full of dodgy assumptions. Read on and you find it is a terrible mish-mash of self-evident truths, half truths, and selective distortions interspersed with islands of sensible analysis. It juxtaposes statements about global aid and British aid and invites misleading inferences. Its figures are vague and based on extrapolations from guesstimates. It relies on anecdotes and anonymous quotes.

It is far from alone. The latest report from Christian Aid breathlessly begins: "Despite good intentions and billions of pounds worth of aid and debt relief, more money flowed out of poor African coffers into Britain last year than the other way round." But again, look at the detail, and you find they reach this conclusion by confusing a balance of payments deficit with a financial loss. This is economic illiteracy masquerading as analysis.

What has happened to Britain's aid agencies? Once they could be relied upon to act as impartial judges of the best interests of the world's poor. Increasingly they seem intent on twisting the facts to fit some preconceived agenda.

There is plenty wrong with the rich world's aid. It can be haphazard, unpredictable, unco-ordinated, and self-serving. But it can also be well-delivered, as British aid now largely is. Among ActionAid's "phantom aid" is debt relief which has, since Gleneagles, made health care free in Zambia, fed four million drought victims in Tanzania, is building roads for poor farmers in Ghana, and is getting 3.5 million more children into school in Nigeria.

Likewise with expat consultants. Such "technical assistance" can be overused. What African schools need is trained teachers, books and school buildings with toilets - not curriculum experts from Warwick University. But there are situations where outsiders are essential. If you want to upgrade an African port you need expertise in crane, storage, computer and customs systems, which will almost certainly not be available locally. And if you want good people to do these things, you have to pay the going rate.

ActionAid fails to acknowledge that. Instead it adopts a cheap-shot "down with fat cats" tone, comparing the cost of consultants with local salaries - as if all skills could be purchased locally. It highlights just £101m over five years - out of an annual £5bn budget - paid to big accountancy firms like KPMG or Deloitte but fails to say what it was spent on. You need top accountants to design good accounting systems to combat corruption in Africa. So why are aid agencies exaggerating to grab cheap headlines?

In part the answer is political. Some agencies such as War on Want and the World Development Movement fit development into a wider picture of disgruntlement about the uselessness of capitalism.

Inside ActionAid and Christian Aid there are elements which appear to regard trade and foreign investment as a bad thing and regard the poor world as a crucible for utopian self-development. Even the more sensible agencies like Oxfam, Cafod and Save the Children - whose analysis is generally sound and useful - occasionally succumb to peer pressure from other agencies to exaggerate. In a world where every agency is battling for "market share", no one wants to be left behind.

That explains the fixation on issues which have domestic political resonance, such as water privatisation. This makes big waves in the UK. But in Africa only the top richest few per cent of the population get their water piped. The really poor buy it from street vendors at vastly inflated prices or get it from dirty streams. Water privatisation may be a bad idea but there are far more important things to get the UK supporter base worked up about. It's why, of all the vast array of trade issues, agencies concentrate on trade liberalisation disproportionately.

In part their behaviour is tactical. The received wisdom is that the more extreme their demands, the more change will come. At Gleneagles they had written their condemnatory press releases in advance, having, the key people privately admitted, decided that a negative response was the best way to keep the campaign alive. They have since had to revise that judgement. "The campaigning NGOs who queued up to dismiss the pledges to Africa at Gleneagles last year have been proved wrong," as Simon Maxwell of the Overseas Development Institute put it. But the basic mindset remains.

What has been lost is the honesty and integrity that once characterised the development lobby. In the old days if Oxfam's head of research, Kevin Watkins, wrote a report and its campaigns director, Justin Forsyth, lobbied on it, everyone took notice. So much so that Watkins was taken into the UN and Forsyth into Downing Street, where he has been instrumental in Tony Blair's large-scale adoption of an agenda that was once pushed only by idealist campaigners.

Today some agencies seem intent on providing ammunition for the "aid doesn't work" lobby. They have become figures of fun. Or at least they would be were not the lives of millions of poor people at stake.