Rich Countries Exploit by Dishing out 'Phantom' Aid

[Guest guest]

Rich Countries Exploiting Poor by Dishing out 'Phantom' Aid

Rahul Kumar

OneWorld South Asia

30 June 2005

 

"The USA and France, two of the world's largest aid donors, give the

maximum phantom aid. If these countries provide one dollar as aid to

the poor countries, almost 90 cents go back to them."

 

NEW DELHI, Jun 30 (OneWorld) - Just days before the G8 summit, taking

place next week in Scotland, international development organization,

ActionAid has hit out at the developed nations for providing aid that

serves their corporate interests, pushes privatization in recipient

countries, funnels money to rich consultants and leaves the poor

countries heavily indebted.

 

At a press conference in New Delhi on Thursday to release its report –

RealAid - ActionAid alleged that two-thirds of the donor money is

not available for poverty reduction in developing countries as it

goes back to the donor countries. Some of the countries where

research was conducted include India, Vietnam, Cambodia, Uganda and

Ethiopia.

 

International director of ActionAid, John Samuel said: "In 2003, $65

billion was given as aid to the poor countries of which only $27

billion reached the poor countries. The USA and France, two of the

world's largest aid donors, give the maximum phantom aid. If these

countries provide one dollar as aid to the poor countries, almost 90

cents go back to them."

 

The international development organisation also criticized the G-8

countries for falling short of international aid targets. ActionAid

Country Director Babu Mathew said: "The official international aid

target of 0.7 per cent of national income of the rich countries is

not being met and in 2003 was only 0.1 per cent of their national

income. A classic example is the tsunami catastrophe in which

countries like Australia, France, the Netherlands, the USA and the

European Commission have delivered between seven per cent to 33 per

cent of the pledged aid."

 

Presenting the mechanisms that the rich countries use to manipulate

aid for their own benefit, Samuel said: "The aid is in books, but not

in actuality. A big portion of the aid is given to consultants in the

form of technical assistance. Nearly 18 $billion dollars of aid was

given as fee to consultants from the UK, the USA and Canada. Another

portion of the money is 'tied aid', in which the donor dictates to

the recipient country of how and where to spend the money. In such

cases the USA will ask India to buy anti-retro viral drugs only from

American pharmaceuticals under its AIDS/HIV aid programme."

 

ActionAid has called upon both the rich and the developing countries

to bring about transparency and accountability related to their aid

dealings. Samuel alleged that in the last two years a large part of

the aid meant for eradicating poverty has been transferred to buying

arms and ammunition, even as 800 million people go to bed hungry

everyday in India and sub-Saharan Africa.

 

The RealAid report says that aid is being used to privatize the water

and energy sectors and open markets in developing countries. In India

it is being used for modernization of harbours, modernization of

fishing and for promoting beach tourism.

 

Mathew commented: "Before the tsunami devastation, a vibrant pre-

tsunami coastal economy thrived in which all the people, including

dalits, tribals and the fisher folk, could eke out a living. But

under the tsunami aid that has come to India, there is a strong push

for changing the socio-economic structure of the coastal areas. The

funding patterns of the rich countries are geared towards promoting

mechanized, export-oriented fishing which is a serious threat to

traditional fishing as well as coastal resources putting millions of

coastal communities at risk."

 

The report says that some of the poorest countries are spending upto

85 per cent of their national budgets on debt servicing, or paying

off interest to the rich countries for development aid. RealAid asks

for a new international aid agreement to make aid more accountable

and effective by setting up a new UN Commissioner on Aid.

 

The report also asks for recipient governments to reform by being

more accountable, transparent, democratic and promoting human rights.

At the same time the report says: "Donors must support and encourage

developing country efforts to reduce poverty by meeting their

international commitments to provide more and better aid."

 

ActionAid has put up demands to the G8 countries for trade justice,

debt cancellation, an increase in the quality and quantity of aid and

national efforts to eliminate poverty. It has also called upon the

governments in both developing and the developed countries to achieve

the Millennium Development Goals (MDGs) in a way that is democratic,

transparent and accountable to the citizens.

http://southasia.oneworld.net/article/view/114368/1/1893