The aid business has grown fat. It’s time there was proper scrutiny

Published in The Spectator (February 18th, 2012)

Such a simple question: should Oxfam spend a couple of hundred pounds a month opening up the swimming pool at its guesthouse in one of the nicer parts of Nairobi? It was posed by Duncan Green, the group’s head of research, on his blog, and provoked a revealing bout of navel-gazing in the aid industry.

The pool was shut, Mr Green disclosed, on the orders of the charity’s head office, which feared a scandal after an advert for a pool attendant appeared on its website. The post went viral, sparking a far bigger response than Mr Green’s usual musings on poverty. Some comments were satirical, such as the suggestion Oxfam open a golf course for staff in Kenya. Others were superbly sanctimonious, such as the humanitarian worker who wrote: ‘We all agonise that we are not Gandhi.’

One respondent alleged that a major charity recently held a big management meeting at a luxury game lodge in South Africa, where rooms are £150 a night. This is not the sort of thing mentioned in fund-raising leaflets. Aid workers admitted to delight at swapping rented flats in Europe for big houses in hot climates with maids. There was talk of ‘doing very nicely financially while fighting poverty’ and of a ‘good friend who has become a millionaire from the poverty industry’ thanks to the generosity of the Department for International Development (Dfid) and the World Bank.

Successive governments, dazzled by celebrity campaigners, have ramped up aid donations and promoted topical causes. These days, Britain even forces aid down the throats of nations that do not want it. Our government gives £280 million a year to India, which distributes foreign aid itself and in a decade will have a bigger economy than ours. The Indians asked to stop taking ‘peanuts’ from the British but, we have learned, Dfid insisted it would be too embarrassing to change course.

Mr Green’s blog highlighted the contortions of a thriving industry that would go out of business if it succeeded in its stated aims. Aid workers know they are not saints; privately, they admit the shortcomings of their trade. They accept that billions have been wasted on failed ideas and flawed projects, and acknowledge that huge sums still go missing or are misspent. These concerns find increasingly strong echoes across the developing world. A swelling chorus of economists, politicians and pundits argue that western aid policies are patronising, destructive and outdated. They say big donations fuel corruption and undermine the accountability of governments, which come to rely on handouts from abroad rather than the support of taxpayers at home. Countries are made to seem helpless supplicants by endless pictures of children with distended bellies and flies in their eyes, undermining tourism and trade.

Consider Somaliland, which broke away from Somalia 21 years ago, and has become not only a haven of good governance but also a case study in how the absence of aid can lead to success. Because Somaliland has struggled to achieve international recognition, it has never received as much international money as its peers. ‘We were left to rely on our own resources — there could be no complacency,’ the country’s energy minister, Hussein Abdi Dualeh, told me when I went there last year. ‘I’m not a huge believer in foreign aid,’ he added. ‘How many countries have moved ahead and developed with international aid? It is not the formula for development.’

I have just returned from Haiti, a place whose recent history underlines Mr Dualeh’s point. Even before the devastating earthquake two years ago, it was nicknamed ‘the Republic of NGOs’, because it had more charities per capita than anywhere else on the planet. In the past 50 years, Haiti has received four times more aid, per head of population, than Europe under the Marshall Plan, and average incomes there have fallen by more than a third.

At the other end of the same island is the Dominican Republic. Like Haiti, over those 50 years, it suffered political violence, military invasion and corruption. On the other hand, it received far less aid. Incomes in the Dominican Republic tripled.

In Haiti, since the earthquake, anger has risen. People are asking what happened to the billions donated in emergency relief: fewer than 5,000 new houses have been built and half a million people remain stuck in squalid tent cities. There are stories of charity workers living in £2,500-a-month flats and eating lobster in restaurants. The prime minister reckons that 40 per cent of the money went to support the foreigners handing it out.

Meanwhile the aid caravan is moving on to new disasters. As Gaetan Drossart, the searingly honest head of mission for Médicins Sans Frontières, told me, the humanitarian business is a business like any other, and emergencies are important to it: ‘Organisations want to be in front of the cameras in an emergency to attract attention, since this gets the money.’ But he fears his organisation is increasingly rare in actually focusing on emergency work, rather than on lucrative long-term development. ‘This is where you can save lives,’ he says. ‘The big actors are more focused on development. But there is a failure in the development model — we do not know why it is not working.’

This is a remarkable statement from such a source. But something else was apparent in Haiti: even as this courageous charity confesses to a fundamental shortcoming in its industry, most of the media is failing in its duty to hold increasingly powerful international players to account. Go to any disaster zone, and you hear disturbing tales of rapacious behaviour. One Haitian businessman told me that the chief executive of a leading charity had asked him to obtain a lorryload of free food from another organisation: pictures of its distribution then appeared on the first charity’s website, to show its donors how their money was spent. A local aid worker told me about an American pastor who filmed fund-raising videos with orphans — having flown in by private jet.

In broken countries such as Haiti and Somalia, humanitarian bodies are more important than the state: some African nations receive more than half their income in aid. Charities run schools and health services with minimal accountability or transparency. Meanwhile, as Dfid’s budget soars, more and more taxpayer money goes to charities.

Newspapers and broadcasters take pride in their readiness to challenge cant and corruption in government departments, ­corporations and public bodies. Charities, especially the big global ones, should be treated in the same manner. Bosses holding seminars in safari parks and consultants making millions from poverty should be held to account. Instead, despite growing aid budgets and growing concerns over the efficacy of aid, journalists treat their word as gospel.

When highly paid charity chief executives pontificate on the radio about the need to meet arbitrary aid targets, presenters respond with thanks, rather than hard questions. And when aid workers thrust starving children towards cameras to demand money for the latest emergency, they are rarely challenged over their statements, their solutions or their spending records — let alone quizzed over deadly bungles such as aiding genocidal killers in Rwanda, supporting deadly forced resettlement programmes in Ethiopia and propping up despotic regimes. Instead, the BBC hands over vast chunks of its schedules for fund-raising marathons such as next month’s Sport Relief, and newspapers dedicate page after page to articles promoting agencies with their Christmas appeals. Increasingly, papers also rely on NGOs to fund foreign stories, which are handed to them on a plate, presented in an uncritical manner and run without any declaration of interest.

I know this well, having done just that for more than a decade as deputy editor of the Independent. There were never the same conflict-of-interest discussions in such cases as there would have been had we struck a similar deal with a multinational business — although many businesses, through job creation, provide far more help to the developing world. It is the same at other papers. ‘I suppose we should think about this,’ said one senior broadsheet executive. ‘But it feels different with charities.’

If you doubt the value of all this airtime and newsprint, just ask why aid groups spend so much effort wooing celebrities and building up big public relations offices. Oxfam is currently searching for a head of communications on £75,000 a year; the post is one of its six most senior. Asked to defend spending £16,722 on taking journalists to India and Nicaragua last year, Christian Aid responded that the resulting coverage was equivalent to £161,000 in advertising. Nothing demonstrates more clearly how charities see such trips.

The charity industry has grown fat on unthinking compassion fuelled by uncritical coverage. Where 40 groups worked in the camps that aided refugees fleeing Pol Pot in the 1980s, more than 1,000 major aid bodies arrive for the typical modern disaster, often causing chaos. Since the 1980s, the number of charities working in Ethiopia has increased 200-fold: the real legacy of Live Aid.

Some charitable organisations are good, some are bad — but none are sacred. Together, they form one of the strongest forces in the modern world, and have an immense impact on the lives of billions. And there is strong evidence that for all their good intentions, their work often backfires. It should be the job of journalists to ask the toughest questions, however uncomfortable, not to hop on planes at the behest of powerful institutions — even if they do wear hearts on their sleeves.

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