British taxpayers are spending some £5bn pa on the government's international aid programme. Most of us probably imagine it's going on disaster relief or feeding those starving people we regularly see on TV. Not true: only 16% of it goes on "humanitarian assistance", and according to ActionAid, around one third goes on "phantom aid", which does not benefit the world's poor at all.
In particular, they highlight the 12% of the Department for International Development's budget- roughly £0.5bn pa- spent on consultants. These include all the usual suspects, with a total of £101m awarded to the big five- PWC, KPMG, Deloitte, Ernst and Young and Accenture. Individual consultants typically earn $200,000 pa of which about one-third is for school fees, child allowances, and other expenses which would not be required if locals were employed.
According to DfID, these people are "technical experts" providing technical assistance on the ground- "building capacity" is the current buzz phrase. But according to ActionAid:
"Rich countries’ ‘technical assistance’ – consultants, research and training – too often promotes donor interests and inappropriate northern solutions instead of the alleviation of poverty."
The aid industry has long been a murky corner of government spending, where the action takes place well away from critical eyes here at home, and where it is often impossible to measure success. Hardly surprising that from the notorious groundnuts scheme onwards, government technical initiatives in third world countries have wasted huge amounts of taxpayers' money.
PS Thank goodness the terms of the aid debate are finally changing. Thanks to people like Alex Singleton and his excellent Globalisation Institute, even Saints Bob and Bonio now recognise the importance of free trade and the market in addressing world poverty. Much much more powerful and sustainable than any number of capacity building technical mumble programmes. If we in the West could abolish our egregious agricultural protection systems and really open our markets, we could all be winners.