International development: Britain unveils plan to stop misuse of aid to poor countries

from the Guardian

by Larry Elliott,

Britain's international development secretary, Douglas Alexander, will today announce a global initiative aimed at preventing the misuse of western aid to developing countries through bribery, corruption and waste.

In a plan backed by the World Bank, the United Nations Development Programme and the European commission, Britain intends to make it easier for people in poor countries to track how aid budgets are being spent.

The UK wants donor countries to provide full and detailed information of all the financial assistance provided to each country; details of individual projects and their aims; and reliable information on future aid flows so that developing countries can plan ahead.

Alexander will unveil the initiative at an international conference on aid effectiveness in Accra, Ghana, where he said: "We see this as an important first step to increase certainty for both donors and the countries receiving aid. The impact of aid in relieving poverty can be greatly increased if everyone can see where the money's coming from, who is spending it and what it should be achieving."

The Department for International Development said it was good at tracking aid from UK taxpayers, but Alexander is concerned that only half of all global flows of financial assistance show up on the budgets of poor countries, increasing the scope for the money to be siphoned off.

"The UK is vigilant against the misuse of aid and this initiative will be a crucial tool in the fight against it. If people can see where aid should be going and question whether it has been effective, the scope for corruption is greatly reduced," the development secretary said.

With leading European donors such as Germany, the Netherlands, Norway, Sweden, Denmark and Finland supporting the plan, Alexander expects the initiative to be in place by the end of 2009.

DFID said that in Uganda, an information campaign of the type envisaged about education programmes helped increase the share of funds reaching schools from 20% in 1995 to 80% in 2001.

The Extractive Industries Transparency Initiative, an agreement that covers mining, gas and oil, has helped Nigeria increase its revenue collection by more than £500m.

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