AID POLICY: Donor transparency - winners and losers

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DAKAR, 20 May 2011 (IRIN) - Norway, Sweden, Finland and several UN agencies including the World Food Programme, the UN Population Fund, and the UN Development Programme (UNDP) rank among the lowest out of 42 bilateral and multilateral donors measured for aid transparency, according to just-published research by New York University Economics Professor William Easterly and Claudia Williamson.

The US Agency for International Development (USAID) and the UK Department for International Development (DFID) scored highest.

Researchers measured transparency by analysing donor reporting data to the Organisation for Economic Co-operation and Development, Development Assistance Committee (OECD-DAC); publicly available information; how fully donors responded to direct requests for information concerning how many people they employed; their administrative costs; salaries and benefits; and total development assistance disbursed.

Finland, Norway and Sweden were found to be poor on data sharing. UNDP fared worst partly because it published no information online, nor would it respond to any requests for information.

Williamson recognized it is hard to accurately measure transparency of all donors, but stressed that nevertheless their findings show progress on donor transparency is moving too slowly.

Contradictory findings

Sweden fares far better - coming third top after Denmark and the UK - in a separate assessment of aid effectiveness of European donors, undertaken by Aidwatch. In this case, Aidwatch assessed the availability of 35 types of information at organizational, partner country, and project level.

In the Aidwatch analysis, France, the EU’s second largest aid donor, came bottom alongside Hungary, Greece and Poland.

Four European donors - Denmark, the European Commission, Finland and the Netherlands - have agreed to join the UK in meeting the aid transparency standard set by the International Aid Transparency Initiative, by the end of 2011. The goal entails making aid spend information easier to access, use and understand.

The World Bank just became the first multilateral to attain this goal.

Donors will discuss aid transparency challenges when they meet in Busan, South Korea, at the fourth annual aid effectiveness forum at the end of 2011.

As part of an accountability drive in 2005, donors promised to open up their financial flows and policies for greater scrutiny, by signing the Paris Declaration on aid effectiveness.

WikiLeaks cables: millions in overseas aid to Africa was embezzled

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The true scale of the theft of overseas aid money by corrupt foreign regimes is disclosed in leaked documents obtained by The Daily Telegraph. Tens of millions of pounds of taxpayers’ money has been pocketed by their ministers and officials, much of it used to buy luxury goods

By Gordon Rayner, and Steven Swinford 10:00AM GMT 05 Feb 2011

In one of the worst cases, £1.2million given to Sierra Leone by the Department for International Development (DfID) to “support peacekeeping” was stolen by the country’s “top brass” and spent on plasma television sets, hunting rifles and other consumer items.

Other examples include £16.5million allegedly stolen by ministers in Uganda and £800,000 intended for schools in Kenya stolen by education ministers.

DfID is said to be fully aware of the thefts, but regards the losses as being “within reason”. Details of the embezzlement will reopen the debate over the Government’s decision to increase DfID’s £7.3billion budget at a time of cuts.

In August, 2009, a secret cable from the US embassy in Freetown reported “deep corruption” within Sierra Leone’s defence ministry, “primarily through pocketing of enlisted members’ salaries”.

June Carter Perry, the US ambassador, wrote: “The British envoy revealed that the GoSL (Government of Sierra Leone) demanded a $4 million [£2.46million] contribution from the UK for the Ministry of Defense to support peacekeeping.

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“Upon examination, the British discovered that half of the funds were for the personal use of the minister [Palo Conteh] and top brass. Items such as 36 plasma TVs and hunting rifles for the minister’s own use were included.”

Two months later, the US embassy in Nairobi reported that £800,000 from two educational support programmes funded by DfID and the World Bank had been “misappropriated” by officials working for Kenya’s education ministry, leading to the suspension of 25 staff. Separately,textbooks valued at £10.6million had been “lost” to “fraud, theft, and destruction” over the previous four years.

The embassy noted: “The primary donor, DfID, is reviewing the issue but is not expected to pull funding from the program. DfID considers the Free Education Program to be a major success and the level of losses to be within reason.”

In January last year, senior Ugandan officials were accused of “misusing” £16.5 million allocated to help pay for the 2007 Commonwealth Heads of Government Meeting. US diplomats in Kampala noted that Britain was “deeply angered” by the scandal and was “seriously considering visa restrictions” on the men in question to punish them.

HuffingtonPost: Funding Our Enemies

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"Money is ammunition; don't put it in the wrong hands," Gen. David Petraeus famously said in an August guidance to NATO troops in Afghanistan. “And remember, we are who we fund.”

By that definition, however, we are our own worst enemies.

An October report from the Senate Armed Services Committee came to the startling conclusion that the military’s hired guns are fueling the very insurgency the military is there to fight:

The Committee's inquiry uncovered evidence of private security contractors funneling U.S. taxpayers dollars to Afghan warlords and strongmen linked to murder, kidnapping, bribery as well as Taliban and other anti-Coalition activities. It revealed squandered resources and dangerous failures in contractor performance, including untrained guards, insufficient and unserviceable weapons, unmanned posts, and other shortcomings that directly affect the safety of U.S. Military personnel.

The report highlighted two cases in particular, in which security contracting firms ArmorGroup and EOD Technology relied on personnel linked to the Taliban.

Among the report’s major conclusions:

• The proliferation of private security personnel in
Afghanistan is inconsistent with the counterinsurgency strategy

• Afghan warlords and strongmen operating as force providers to
private security contractors have acted against U.S. and Afghan
government interests

• U.S. government contracts for private security services are
undermining the Afghan government's ability to retain members of the
Afghan National Security Forces by recruiting men with Afghan National
Army and Afghan National Police experience and by offering higher pay

• Failures to adequately vet, train, and supervise armed security
personnel have been widespread among Department of Defense private
security contractors, posing grave risks to U.S. and coalition troops
as well as to Afghan civilians.

HuffingtonPost: Countless Dollars Literally Taking Flight

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The Wall Street Journal reported in June that more than $3 billion in cash has been openly flown out of Kabul International Airport in the past three years -- “packed into suitcases, piled onto pallets and loaded into airplanes.” Only so much of that could be drug money. The bulk, presumably, was skimmed from U.S. aid and logistics spending.

And that’s just what people are declaring. The Journal calculated the $3 billion figure based on Afghan customs records, noting: “More declared cash flies out of Kabul each year than the Afghan government collects in tax and customs revenue nationwide.”

The actual amount of money flown out of the country is, of course, higher. As the Journal noted: “One courier alone carried $2.3 billion between the second half of 2008 and the end of 2009, said a senior U.S. official, citing other documents that are in the possession of investigators.”

The New York Times reported in August 2010:

The flow of capital out of Afghanistan is so large that it makes up a substantial portion of Afghanistan’s gross domestic product. In an interview, a United Arab Emirates customs official said it received about $1 billion from Afghanistan in 2009. But the American official said the amount might be closer to $2.5 billion.