Aid: what do the numbers tell us?

Last week The Guardian run a story on aid transparency following the latest report from Aid Transpareny  Index Publish What You Fund

Here are resuts

As the table above shows donors are rated Very Good o Very Poor according to how transparent they are. In some respects there are no surprises for me with respect to some of the countries that scored very poorly. For instance China does not need an explanation, Bulgaria, Hungary, Slovenia, Poland, Romania and Latvia are in my opinion new kids on bloc with respect to development and until recently were aid recipients themselves and as such have a lot to learn in this area.

What surprises me is that aspects of  France, the United Kingdom, Germany and Luxembourg aid regimes are judged amongst the very poor. These countries  are in my opinion the founding fathers of development aid and have had at least 50 years behind them in international development.  They should be the pillars of Good Practice  with respect to  international development

The performance of Nordic countries is worth noting here too,  apart from Sweden the rest do not make into either the Very Good nor the Good categories and yet according to the Development Assistance  Committee (DAC)  there were amongst the five countries that met the UN aid target of 0.7% in 2011; the Netherlands at 0.75%, Denmark at 0.85%, Luxembourg at 0.97%, Norway at 1.00% and Sweden at 1.02%, the largest economy in the world, the United States of America (US), only achieved 0.20% of GNI in 2011, the same as Italy whilst the large economies of Europe, the UK gave 0.56%, France 0.46% and German 0.39% (OECD statistics 2011).

Source: OECD Statistics 2011: Table 1 DAC Members’ Net Official Development Assistance in 2011

A question arises as to what these countries are hiding.

One of the reasons for this lack of transparence,  in my opinion is  to do with donor interests and motives for giving aid  as well as an issue raised by  the NGO ActionAid UK amongst others that not all aid that is donated is true aid.

ActionAid has argued that most of the aid that is provided is not “actual aid” due in part to the way it is structured, aid includes debt relief, technical assistance amongst other things.

In addition some donors ‘tie’ their aid, which reduces the amount of aid that is available to recipient countries. In practice this means that aid is given on condition that it is used to buy services and goods from the donor country. The effect of this is that the true beneficiaries of such aid are companies and organisation in donor countries.

For these reasons it is to see why some donor would perform poorly with respect to transparency and leads me to another question.

How can corruption be stamped out if donors are not open about what they fund?