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Last Updated: Monday, 1 August 2005, 11:48 GMT 12:48 UK
Call for rethink in aid policy
By Kevin Anderson
BBC News website

Food aid in Afghanistan
Many people rely on food aid in Afghanistan
Bob Geldof has challenged the world to make poverty history, but some four billion people in the world still live on less than $1 a day.

The organisers behind Live 8 called for the cancellation of debt, more targeted aid and the removal of trade barriers that limit African economies.

But leading minds in development at the interdisciplinary TED (Technology, Entertainment and Design) conference in Oxford have called for a radical rethink of development.

They argue that aid as it exists now actually retards broad-based development.

It is not that money is not wanted. Ashraf Ghani served as Afghanistan's finance minister and helped secure $27.5B in aid for his country.

But he argues that $1 in aid rarely means that $1 delivered to the people who need it the most.

The flaws of aid

Mr Ghani and Clare Lockhart with the Overseas Development Institute in London are currently writing a book looking at how to foster development in failed and fragile states like Afghanistan.

Failed states are a problem. They cannot provide the environment to help their population climb out of poverty.

Ashraf Ghani
What scares me most is your lack of engagement
Ashraf Ghani, former Afghan finance minister
And as been seen in recent years, failed states breed instability and insecurity.

But the current system of aid does not work and isn't helping these states and their people.

They argue that time lines for aid projects are too short to accomplish much.

Most aid programmes are tied to the annual budget cycles of donor countries, but to be effective, they argue programmes need to be designed with time frames of five years or more.

The programmes would have an end point in sight, but the aid should be focused on creating functioning, capable states.

Once that is accomplished, the states would be self-sufficient and aid no longer necessary.

And technical assistance - sending western experts to developing countries - has not proved a panacea in creating stable states that provide for their people.

Mr Ghani advocates intellectual exchanges between fledgling states and developed countries and also a programme of distance education where students could remain in their home countries and still benefit from education at universities abroad.

This major investment in the human capital of these countries would ensure a new generation of capable leaders and managers, Mr Ghani said.

Wasted aid

Aid can also distort local economies, Ms Lockhart says, pointing to countries where aid agencies pay doctors more to drive trucks than they can make practicing medicine.

And even when aid reaches these countries, bureaucratic costs limit its impact and effectiveness.

Ms Lockhart points to a project meant to deliver roofing timbers to the central highlands of Afghanistan.

Villagers described how the agency in Geneva meant to oversee the project took 20% of the $30m for administrative costs, which subcontracted to an non-governmental organisation (NGO) in Washington that took another 20%, which in turn subcontracted to an Afghan NGO that took another 20%. And then they paid money to a trucking company in Iran to haul the timber.

Once the timber arrived, it was found to be of no use as roofing timber to the villagers.

It was too heavy for the mud brick walls of their homes so the villagers chopped the wood up and used it as firewood.

They have argued that a better model is to deliver block grants to villagers who receive the money only if they hold local elections and post how the money will be used in a public place in the village.

Mr Ghani definitely follows the old charge of comforting the afflicted and afflicting the comfortable.

When asked by conference organiser Chris Anderson what scared him most when considering the future of Afghanistan, he responded: "You," although it was obvious he meant the comment much more broadly.

But he said: "What scares me most is your lack of engagement."

However, Mr Ghani clearly has a different kind of engagement in mind than the system of aid that has existed for the last 60 years.


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