CANADIAN AND BRITISH AID UNDER THE SPOTLIGHT AGAIN
Do western countries care about what happens to taxpayers’ money doled out as aid to
poor countries? Who accounts for that money?
Recent studies and reports on British and Canadian aid programs seem to suggest that
governments seem to be turning a blind eye to what happens to aid money once it leaves
their treasuries. Two recent reports seem to support this view:
Canada: CIDA’s aid effectiveness continues to be doubted
“Nobody is keeping account of where millions of dollars are going in Afghanistan.”
Following the lead of Canada's senate foreign affairs committee, the Senlis Council, and
the Manley report, Canadian senator Colin Kenny questioned how the government is
delivering aid to Afghanistan. Kenny, who is also the chairman of the senate committee on
national security and defense, said that Canada has fallen into the habit of giving checks
to different international organizations and then walking away with only a scant idea of how
the money is spent. "The money is going to Swiss banks. a huge amount of it is getting
funneled off," Kenny said. "The problem is, once they've given the checks to them, they
have no way to determine what was done with it or measure whether it was successful.
Nobody is keeping account of where the money is going." He said corruption is rife in
Afghanistan but because CIDA does not police or properly track the money, it ends in the
hands of corrupt officials in Afghanistan.
Mr. Kenny said the senate committee was so concerned about the misuse of taxpayers
money that it sent a senior researcher to Afghanistan for six months to track it down, but
to no avail. “He could not get anything out of CIDA that described the project that was
coming through as a result of Canadian funding.” Mr. Kenny said
Canadian minister of international cooperation Beverley Oda, however, fought off these
allegations. "Senator Kenny is totally wrong because he is making wild accusations that
are without fact. He is accusing the World Health Organization, UNESCO, the Red Cross
and other organizations of no accountability and that's totally wrong," she retorted.
(Source: Ottawa Citizen, Friday 7, 2008)
Britain
Britain's £461m overseas aid budget for tackling poverty could be open to fraud because
of the lack of controls over the way it is spent in some of the poorest countries in the world,
the public spending watchdog has warned.
The National Audit Office said the Government's switch from project-linked funding to wider
"budget support" for countries in an attempt to reduce poverty had led to "significant risks"
that that the funds would be "misapplied for political reasons or through corruption".
Calling for more controls to be imposed by the Department for International Development,
the report highlighted internationally recognized data showing that the worst countries for
corruption included some of the biggest recipients of budget support, including Pakistan
(£52.5m), Vietnam (£34.5m), Zambia (£23.3m) and Nepal (£5.4m). "Donors cannot track
their own contributions individually once paid to partner governments and instead monitor
the government's overall expenditure and progress against its agreed strategy," said the
watchdog.
"Evidence on the extent to which budget support has yielded better value for money than
other ways of delivering aid, or has had an impact on income poverty, is not conclusive."
(Source: The Independent, UK-Friday 8, 2008)
UK AID EFFORT IN AFGHANISTAN DYSFUNCTIONAL
Research by the Senlis Council, an international policy group, has shown that British
efforts at restructuring Afghanistan has not made a positive impact in the country,"
(The Department for International Development) in Helmand is dysfunctional, totally
dysfunctional," lamented Senlis president Norine MacDonald, who made her statement as
the U.K., the U.S., and other North Atlantic Treaty Organization allies plod through the
seven-year process of restoring security in Afghanistan. "If DFID think they are making a
difference in Lashkar Gah and other towns, they clearly haven't been out to take a look.
I haven't seen any signs of DFID aid or development projects," MacDonald added, referring
to Helmand province's largest city. The DFID, however, dismissed the council's findings,
saying that it has spent at least USD70 million in development projects for the Afghan
province and that it has been "empowering local communities to meet their needs."
(Source: Reuters, February 7, 2008)
LONDON COURT RECORDS JUDGEMENT AGAINST FORMER
PRESIDENT CHILUBA OF ZAMBIA FOR CORRUPTION
the BK Facility and the Zamtrop account in London. This is a case in which the Attorney
General of Zambia took out a civil suit against Chiluba and 19 others who were alleged to
have siphoned millions of dollars from the Zambian state treasury.
Those co-accused with Chiluba include Cave Malik and Company, Xavier Francis Chungu
(XFC), Attan Shansonga, Stella Chibanda, Aaron Chungu, Bimal Thaker, Faustin Kabwe,
Francis Kaunda, Boutique Basile, Nebraska Associates Limited, MISSL Associates
Limited, Hearnville Estates, Jarban SA, Raphael Soriano Katoto, Belsquare Residence,
NV Roland Cracco and Robert Standaert. Judge Smith accepted that Chiluba should pay
US $58,293,724, Xavier Chungu US $58,112,727 and Stella Chibanda US $58,112,727.
Others were Aaron Chungu US $27,193,136, Faustin Kabwe US $53,757,867, Francis
Kaunda US $100,575, Boutique Basile US $ 1,815,736 and Raphael Soriano
US $29,609,582. British High Commissioner to Zambia Alister Harrison says the London
High Court judgment on Zambia’s Second Republican President Dr. Frederick Chiluba is
a merit to the fight against corruption. Mr. Harrison says the judgment serves as a
reminder to all that corruption has grave consequences.
(Source: Lusaka Times May 26, 2007 & The Mail & Guardian Newspaper, June 8, 2007)
Trace Aid lists Chiluba as one of Africa's dirty dozen.
WORLD BANK SAYS DEVELOPED COUNTRIES MUST
DO MORE TO COMBAT CORRUPTION
United Nations conference in Bali studying graft was told on Monday.
Ngozi Okonjo-Iweala, a managing director of the World Bank, told delegates that
international institutions and the private sector must also contribute because they hold
most of the $20bn-$40bn (€13.5bn-€27bn, £10bn-£20bn) in developing country state
assets stolen each year.
Her call came as Suharto, Indonesia’s former dictator who was named in a 2004
Transparency International study as the world’s greatest kleptocrat, was being buried on
the neighbouring island of Java.
Suharto amassed a fortune of up to $35bn, according to Transparency International.
Numerous cronies also became wealthy through his patronage. Jakarta has so far
recouped nothing from the Suharto family in the 10 years since the retired general was
forced from office. It has, however, prosecuted dozens of officials for corruption in recent
years and is one of the first two countries – the other being Bangladesh – to be assessed
for a joint UN-World Bank Stolen Assets Recovery scheme, which was launched last year.
Antonio Maria Costa told the Financial Times that the convention’s monitoring system
should be given “real teeth” to ensure signatories took steps to curb bribery. Penalties
for non-compliant countries were possible, but would only be considered from 2009
onwards, he added.
By John Aglionby in Jakarta and Hugh Williamson in Berlin
(Published: January 28 2008 22:57 | the Financial Times Limited 2008)
Trace Aid has always been in the forefront of urging donor countries to stop paying lip
service in fighting corruption, and one way of doing this is to stop the flow of billions of
dollars into the private bank accounts of corrupt political and government officials held in
Asian, European and North American banks.
BUSH SEEKS TO ABANDON TIED AID TO BOOST AID EFFECTIVENESS
President George W. Bush urged Congress in his annual State of the Union speech on
Monday to help provide more food aid to poor nations by buying more crops overseas.
"I ask Congress to support an innovative proposal to provide food assistance by
purchasing crops directly from farmers in the developing world, so we can build up local
agriculture and help break the cycle of famine," Bush told lawmakers, Supreme Court
justices and other dignitaries on gathered on Capitol Hill.
The United States, the world's largest food aid provider, now requires that almost all food
assistance programs purchase U.S. crops and ship them overseas, a practice that is
costly and can slow the delivery of aid for months.
As oil and commodity prices soar, relatively stable aid budgets buy less and less food for
hungry nations.
The administration has been lobbying for a change to food aid purchasing rules for years,
but it is a deeply unpopular idea with the shipping and commodity interests that benefit
from the current system. (Source: Reuters, January 28, 2008)
Trace Aid is a strong advocate for the abolishment of tied aid because it reduces the amount
of terminal aid dollars into the hands of poor countries for whom it was intended for.
BONO BLASTS HARPER, ACCUSES HIM OF BLOCKING PROGRESS ON AFRICA AID
Prime Minister Stephen Harper on Friday and accused him of blocking a meaningful deal on
African aid at the G8 summit.
Bono, lead singer for U2 and activist for humanitarian aid, singled out Harper for criticism
and accused the prime minister of blocking a deal - a charge Harper vehemently denied.
He described the prime minister as out of step with Canadians who enjoy a prosperous
economy and surplus public finances and would like to help others.
"I said some years ago that the world needs more Canadas, and I meant it. I can't believe
that this Canada has become a laggard. I think he's out of sync with the people."
His pop-star buddy and fellow activist Bob Geldof chimed in: "A man called Stephen Harper
came to Heiligendamm. But Canada stayed home."
Harper said Thursday that Africa is not Canada's "sole focus" because there are also
development challenges in the Americas. (Source; Reuters: Fri Jun 8, 2007)
IS CIDA DYSFUNCTIONAL?
“dysfunctional and demoralized state”.
“Problems emanating from a strictly centralized agency are immense. In addition to too few
field staff, total withdrawal of decision-making from field staff that do exist does not serve
an agency whose client is not Canada but in the field Managers sitting at CIDA headquarters,
with little knowledge or understanding of the field realities but who hold supreme centralized
authority, too often ignore the analysis and advice coming from the field,” the former
executive said.
Keith Martin, the Liberal critic on foreign aid ho once worked as a doctor on the South African
-Mozambique border, said he has seen CIDA’s shortcomings first hand. “Billions are poured
into CIDA and only a trickle of it is seen on the ground.”
(Source: National Post November 29, 2007)
Trace Aid has carried out a number of studies on the effectiveness of CIDA aid. Among its
recommendations is that CIDA must incorporate best aid development practices and reduce
the cost of managing aid.
WALKING THE FINE LINE BETWEEN FOREIGN-AID SUCCESS, FAILURE:
CIDA’s foreign aid to Tanzania
annual bilateral contribution has risen from $9 million in 2000 to $62 million in 2007/08.
However, the largesse that has poured into Tanzania in the past 45 years has not
transformed it into a tiger economy. It is still ranked 162nd out of 177 countries on the UN
Human Development Index. Only half of the country’s budget is covered by state revenues.
There are many reasons for this, including Socialism that the country embarked upon from
1961 to 1985. Corruption, state over expenditures and waste are the other problems.
(Source: National Post, November 29, 2007)
In one of our reports, we have concluded that CIDA’s $12 billion aid to Africa has not
produced the desired impact of reducing poverty - Trace Aid
DOES HARPER WANT OUT OF AFRICA?
In its new foreign-policy agenda, the Conservative government has made clear that it has
three priorities: backing the military mission in Afghanistan, focusing on the Americas and
pushing Canada’s relationship with emerging economies such as China and India.
Conspicuously absent from this policy was mention of Africa, according to the Africa-Canada
Forum, an organization of non-governmental organization interested in the continent.
The absence of Africa in Mr. Harper’s foreign-policy pronouncements has sparked concern
not just from non-governmental organizations but from former Conservative Prime Minister
Joe Clark as well. “Of all the Prime Minister’s press releases, statements and speeches in
the last year, not a single one mentions Africa-not the statement announcing support for HIV-
AIDS research, not on the retirement of Kofi Annan, nor the Speech from the Throne,”
Mr. Clark said recently. At the G8 Summit meeting in Germany in 2007, Mr. Harper made it
clear he was shifting the focus closer to home in the Americas, noting that “Canada’s sole
focus and the primary focus is not necessarily Africa but we remain engaged there.”
(Source: Global and Mail, November 23, 2006)
TOO FEW DEVELOPMENT DOLLARS ARE ACTUALLY SPENT IN AFGHANISTAN
"You can hire someone in Virginia, or you can hire someone locally. Hen you hire locally, it
has so many positive multiplier effects on the economy.” Scott Gilmore, Executive Director
of Peace Dividend.
Major donors, including Canada, spent about $1.36 billion in official development assistance
to Afghanistan over a one-year period ending March 2006. Only $424 million, or about 31%,
had local impact, according to a study conducted for the Afghan Ministry of Finance in the
spring of 2007 by the Peace Dividend Trust, an Ottawa non-profit agency.
(Source: Peace Dividend Report to the Afghan Ministry of Finance - 2007)
Trace aid has completed a study entitled “Effectiveness of Canadian aid administered
through CIDA, and has observed that it costs $5.00 to deliver one dollar of aid, compared to
20 cents it costs NGOs to do the same work.
CIDA UNDER FIRE OVER ‘PATHETIC' STATE OF HOSPITAL
Canada’s development agency (CIDA) has too few people on the ground to adequately
oversee Afghan aid. CIDA has three staff members based in Afghanistan, where $139 million
will be funneled this year (2007) to help with the war-torn reconstruction.
A report released in the week ending Friday 31, 2007, by the Senlis Council, a European
think tank with researchers in Afghanistan says there have been few visible results from
CIDA’s work.
The Senlis Council searched for $350,000 that the government had given UNICEF to set up
a maternity waiting area. The researchers found an empty tent that was taken down the next
day and heard from local people inside the hospital that it had never been in operation.
CIDA and UNICEF gave different versions. A UNICEF spokesperson said the $350,000 was
going to be used to create a permanent maternity waiting home at the hospital, which was
due to be completed in 2007. CIDA said the money was used for a temporary program that
provided emergency training of obstetrics health workers that had since ended, and that a
permanent initiative, costing $10 million, was about to be put in place.
(A case of Ground truth versus Official Truth: Story from the Globe and Mail, August 31, 2007)
CIDA ANTI-MALARIA EFFORT PATHETIC
April 25 marks Africa Malaria Day. Malaria kills a child every 30 seconds. At the beginning of
April, CIDA pledged $20 million to the Canadian Red Cross to distribute insecticide treated
bed nets. The amount was a $6 million cut from the pervious funding given three years ago
and a far cry from the $100 million the Red Cross had originally requested.
“It’s absolutely inexcusable” said Amir Attaran, an expert on global development policy at the
University of Ottawa. “It shows the unbelievable failure of CIDA to recognize and build on its
own successes. It shows that this government does not care about saving African children
from dying.
The success Mr. Attaran is referring to is the Canadian Red Cross distribution of 875,000 bed
nets in Sierra Leone in November 2006. They were proven to reduce malaria by more than 50%.
The tragedy, says Mr. Attaran, is that nobody, absolutely nobody has to die from Malaria. It
is a 100% preventable, 100% treatable disease.”
An editorial published in the Canadian Medical Association Journal of April 25, 2007 described
CIDA’s record on Malaria “disturbing,” calling the “indolence of Canada’s government baffling
and embarrassing.” (Source: Ottawa Citizen, April 25, 2007)
ZAMBIAN OFFICIAL JAILED FOR CORRUPTION
labour on abuse of office and corruption charges saying he deserved to be in prison for the
crimes that he committed.
This is a matter in which Bulaya, a former permanent secretary in the Ministry of Health, was
alleged to have misappropriated about K3 billion public funds meant to buy immune boosters
(Elixir 9) for people living with HIV/AIDS.
Delivering judgment in a packed courtroom, magistrate Musona said it was important that
people who were entrusted with national responsibilities look into the affairs of citizens and
not betray their confidence.
At this stage, Task Force prosecutor Fred Malambo indicated that they would apply for
forfeiture of some of Bulaya’s properties on Friday.
(Source: Zambia Post Newspaper, February 21, 2007)
CORRUPTION OF ZAMBIA'S FORMER PRESIDENT
Monday, May 07, 2007
Chiluba guilty of graft
Zambia's ex-President Frederick Chiluba has been found guilty of stealing $46m of public
money by a UK court.
The judge said that Zambians should know that when he appeared wearing his trademark
designer clothes; they were paid for with stolen money. Mr Chiluba's spokesman told a
Zambian newspaper that the ex-leader did not accept the court's jurisdiction. Mr Chiluba was
not in the London High Court but the ruling could lead to the seizure of his assets. The civil
case was brought on behalf of the Zambian attorney general. Swiss boutique Justice Peter
Smith said Mr Chiluba had a global reputation as a "smart and expensive dresser", with his
"FJT" monogram on shirts and suits and specially made shoes with high heels. He officially
earned about $100,000 while in power from 1991-2001 and yet he paid an exclusive boutique
shop in Switzerland $1.2m.
"This was at a time when the vast majority of Zambians were struggling to live on $1 a day
and many could not afford more than one meal a day," the judge said.
Two years ago, he was furious when hundreds of his designer suits, shirts and shoes were
seized from a warehouse where he had stored them.
"What they have done is to bring my underpants out to the general public," Mr Chiluba told
reporters.
The UK government backed the Zambian law suit and International Development Secretary
Hilary Benn welcomed the court ruling.
"This is an historic victory for the people of Zambia and shows their commitment to bringing
those who steal from the state to account however powerful they are," he said. "The money
recovered can now be returned to the government of Zambia to be invested in the people’s
future such as education or clean drinking water for some of the 7m Zambians living in
poverty."
Unfit for trial
Before the ruling, Mr Chiluba's spokesman Emmanuel Mwamba told Zambia's The Post
newspaper that local courts should handle any prosecutions.
"Dr Chiluba has refused to recognise the jurisdiction and authority of the London court.
He has stated that he will not submit himself to its findings," Mr Mwamba said. Mr Chiluba
laundered the money through two London-based law firms, the judge said.
A Zambian court last year ruled that Mr Chiluba was medically unfit to stand trial on
corruption charges. Mr Chiluba, a former trade union leader, ended 31 years of one-party
rule when he won the 1991 elections. He was defeated in an attempt to change the
constitution to let him seek a third term in 2001. His handpicked successor, President Levy
Mwanawasa, has been pursuing an anti-corruption drive against Mr Chiluba's former
government. Mr Mwanawasa said that he would grant a presidential pardon to Mr Chiluba if
he admitted the allegations of corruption and returned 75% of the cash he allegedly stole.
(BBC News, May 6 2007)
CORRUPTION HAS BECOME A POVERTY ISSUE
World Bank president Paul Wolfowitz has said corruption has become a poverty issue in
developing countries. Addressing participants at a conference on improving governance and
the fight against corruption in Brussels, Belgium, Wolfowitz yesterday stated that corruption
has reached new dimensions that must be tackled urgently.
"While corruption and governance are moral issues, for the Bank they are development and
poverty issues," Wolfowitz stated. "Actually every corrupt transaction has at least two
parties to it and too often, the corrupter comes from a rich and powerful country. So these
new levels of corruption must be fought urgently."
He called for greater capacity building and improvements in the business climate in
developing countries.
"Most honest governments in the world will not give developing countries good governance
if the members of that government cannot administer a simple contract, which is a
challenge in many places. So there is need to strengthen institutions in developing countries
that will help to improve the business environment as well as building capacity," stated
Wolfowitz.
The World Bank recently launched a book titled The Many Faces of Corruption, which
explores the use of prototype road maps to identify corruption vulnerabilities.
The book that is subtitled Tracking Vulnerabilities at the Sector Level, suggests
corresponding warning signals and proposes operationally useful remedial measures in each
of several selected sectors and for a selected sample of crosscutting public sector
functions that are particularly prone to corruption and that are critical to sector performance.
(Wolfowitz, March 19, 2007)
CIVIL SERVICE 'THIEVES' LISTED
President Mwanawasa has said that Government is this week making public a list of
names of public service workers who were allegedly involved in the theft of public funds.
And Mr. Mwanawasa has said that he has no intention of seeking a second term as MMD
president. Mr. Mwanawasa said that Finance and National Planning minister Ng’andu
Magande will release the names of all those involved in the alleged theft of public funds
before they are taken to court. He also clarified that the money which was allegedly stolen
was K36 billion and not K3 trillion, as earlier indicated. “I was given a list of people who
allegedly stole public funds. Next week the Minister of Finance will be giving details of all
those people. "This is the only way we can deter stealing of public funds,” he said.
Mr. Mwanawasa said that cases take too long in the courts of law and therefore those who
stole must be known before they are taken to court. He warned that there was no sanctuary
for any corrupt person. The President was speaking during an MMD 2007 membership
renewal exercise, whose theme is: Providing strong, decisive leadership for development.
(Daniel Nyau, Zambia Sunday Mail, February 11, 2007)
ARCHIVE: 2006 - 2004 CORRUPTION BRIEFS
ARCHIVE: CORRUPTION BRIEFS PRIOR TO 2004