Is Aid Wasted?

By Rachel Auld


Aid from the perspective of governments, is a voluntary transfer of resources from one country to another.  Aid may be given by individuals, private organizations, or governments. Overall, 2010 (the most recent year records are available) was a record year – levels of aid reached an all-time high of $128.7bn, up from $120bn in 2009. But while aid levels are still on the rise, and though some countries might have met their individual targets for aid spending, a multi-billion dollar collective gap remains between the promises made and the funds received.

Foreign aid or (development assistance) is often regarded as being too much, or wasted on corrupt recipient governments despite any good intentions from donor countries. In reality, both the quantity and quality of aid have been poor and donor nations have not been held to account.  But also neither has receipt nations where much aid is wasted on inappropriate projects, bureaucracy, and administration or through corruption. There are numerous forms of aid, from humanitarian emergency assistance, to food aid, military assistance, etc. Development aid has long been recognized as crucial I helping poor and developing nations grow out of poverty.

mitchell aid

In 1970, the world’s rich countries agreed to give 0.7% of their GNI (Gross National Income) as official international development aid, annually. Since that time, despite billions given each year, rich nations have rarely met their actual promised targets. For example, the US is often the largest donor in dollar terms, but ranks amongst the lowest in terms of meeting the stated 0.7% target.  The UK government has agreed to meet the United Nations target of increasing that aid amount to nearly £11 billion by the year 2014.

Advocates of aid say a third of the planet’s population who are below the World Bank’s extreme poverty line live in India. They also argue half of all children in the country are malnourished and it does not have the tax base to eliminate poverty though internal wealth redistribution.  If UK aid was reduced, there is no guarantee that the funding to the poorest states where most of India’s chronically poor live would be topped up by the Indian government.

Food Aid Distribution in Ethiopia 2

The UK must “fundamentally” change its aid relationship with India after 2015 by giving less to the increasingly prosperous country, MPs say.  However, does this look odd in the light of the poverty within India as already mentioned above? Over the last few months we have seen in the news that the UK direct aid to South Africa will end in 2015, International Development secretary Justine Greening has announced.  The DFID Bilateral Aid Review (BAR) of 2011 planned ODA to South Africa of £19m a year from FY11/12 through to FY14/15. I would have thought the South African government would have seen the writing on the wall back in 2011.

The South African government’s main complaints now seem to focus on the process – on how the termination was decided without consultation and the timing of its announcements at a major conference. The government’s aid programme to South Africa is currently worth £19 million a year, down from its peak of more than £40m in 2003, and has focused on reducing the mortality rate among women giving birth, as well as supporting businesses.


Anti-poverty campaigners have argued that the UK already had some of the most rigorous accountability mechanisms in the world. “For little over a penny in every taxpayer’s pound the UK has forged one of the most effective and efficient aid programmes in the world. So could increasing global aid levels be a vital part of achieving the MDGs by 2015?  YES….it could if all countries gave aid, which at the moment is not the case.  Also if we use the aid efficiently, this again is not always the case.


Therefore, are we giving aid to the wrong places?  Should we be giving aid as a country or should aid start at home?





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