Where does all the aid money go?
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Where does all the aid money go?
How much of the millions of foreign aid money actually reaches Cambodians?
Phantom aid never leaves our shores
Debra Jopson
May 28, 2007
Sydney Morning Herald (http://www.smh.com.au)
MORE than $600 million of Australia's foreign aid over the past two years never went overseas but was swallowed up in the coffers of a small Federal Government agency in Pitt Street, Sydney.
This is just one example of a shift in policy under which the Government dresses up as overseas development assistance money that never leaves Australia or is used to prop up its immigration policies.
Help for refugees in Australia, payments to support the "Pacific solution", and a legal bill at the AWB inquiry are other forms of aid which make the nation appear more generous than it is, a Herald investigation has found.
Tagged in 2006 and 2007 as development assistance to Iraq, the $644 million was used by the Government to argue that the embarrassingly low portion of national income paid in foreign aid had increased. The money was to cover a 17-year-old Iraqi debt. It had been transferred from the Department of Foreign Affairs to the agency in Export House in Sydney in the early 1990s.
"It's just not real aid for real health, real primary schools, real water wells. It's just cleaning up a mess," said Ian Wishart, the national executive director of Plan Australia, one of many agencies that do not agree with counting the debt repayment as aid.
The debt forgiveness, which includes 57 per cent interest accumulated over more than 10 years, has been dubbed "phantom aid" by Mr Wishart and others who monitor the Federal Government's expenditure.
New analysis by a Sydney-based watchdog contends that a third of the $3 billion being spent on foreign development assistance this year is really phantom aid which either never leaves our shores or has been directed away from poverty alleviation programs overseas.
Almost $1 billion which the Government has identified as official aid is being spent on programs in which no new money flows to the countries said to be getting it, Aidwatch says in a report to be released today.
Counting as much expenditure as possible as aid has become increasingly important since the Prime Minister, John Howard, made his pledge to the United Nations 18 months ago to increase official aid to $4 billion a year by 2010.
But the Herald found that much of the money has never left Australia, and that 10 private companies held almost $1.8 billion in contracts let by the Government's official aid delivery agency - AusAID - last year.
The Government's special payments to Nauru through AusAID - used to provide the camps where Australia holds asylum seekers - was described by a former government official as a naked strategy to compensate the island for being part of the "Pacific solution".
"It's just an unmitigated bribe, while we preach the virtues of good governance and the rule of law to our Pacific neighbours," said Mark Thomson, who headed AusAID's Nauru program throughout 2003.
Examples of questionable aid identified by the Herald include:
- A $27,758 payment AusAID made to the Australian law firm Sparke Helmore for legal assistance during the Cole inquiry into legal breaches of the UN oil-for-food program has been counted as foreign aid.
"It was a cost incurred in the administration of aid program assistance to Iraq," said a spokesman for the Department of Foreign Affairs and Trade.
- Another $81,993 described as foreign aid to Afghanistan between 2002 and 2004 was an Immigration Department assistance package for temporary protection visa holders in Australia.
- Half a million dollars of last financial year's $23.4 million in aid for Nauru was to be spent on co-ordinating aid, while $1.3 million went on "logistics", providing housing, transport and other costs for Australian officials.
The $644 million aid to Iraq never left Australia and is really an export debt for wheat bought from Australian farmers more than 17 years ago. A Pitt Street government insurance agency which indemnifies exporters in risky markets paid out claims to grain growers 15 years ago. The Government paid the agency, the Export Finance and Insurance Corporation, and took on the debt, which it now classifies as aid.
"They always count the Iraq money when they show how their aid is increasing ... They are pulling the wool over Australians' eyes because the average Aussie wouldn't think that paying off a wheat debt, which in effect is just a book transfer ... [is] a good form of aid," Mr Wishart said.
However, the Department of Foreign Affairs and Trade said that under Organisation for Economic Co-operation and Development guidelines it could claim Iraqi debt forgiveness as official development assistance.
AusAID said all funds counted as official assistance fell within OECD guidelines.
A spokesman for the Foreign Affairs Minister, Alexander Downer, said he stood by AusAID's answer.
Phantom aid never leaves our shores
Debra Jopson
May 28, 2007
Sydney Morning Herald (http://www.smh.com.au)
MORE than $600 million of Australia's foreign aid over the past two years never went overseas but was swallowed up in the coffers of a small Federal Government agency in Pitt Street, Sydney.
This is just one example of a shift in policy under which the Government dresses up as overseas development assistance money that never leaves Australia or is used to prop up its immigration policies.
Help for refugees in Australia, payments to support the "Pacific solution", and a legal bill at the AWB inquiry are other forms of aid which make the nation appear more generous than it is, a Herald investigation has found.
Tagged in 2006 and 2007 as development assistance to Iraq, the $644 million was used by the Government to argue that the embarrassingly low portion of national income paid in foreign aid had increased. The money was to cover a 17-year-old Iraqi debt. It had been transferred from the Department of Foreign Affairs to the agency in Export House in Sydney in the early 1990s.
"It's just not real aid for real health, real primary schools, real water wells. It's just cleaning up a mess," said Ian Wishart, the national executive director of Plan Australia, one of many agencies that do not agree with counting the debt repayment as aid.
The debt forgiveness, which includes 57 per cent interest accumulated over more than 10 years, has been dubbed "phantom aid" by Mr Wishart and others who monitor the Federal Government's expenditure.
New analysis by a Sydney-based watchdog contends that a third of the $3 billion being spent on foreign development assistance this year is really phantom aid which either never leaves our shores or has been directed away from poverty alleviation programs overseas.
Almost $1 billion which the Government has identified as official aid is being spent on programs in which no new money flows to the countries said to be getting it, Aidwatch says in a report to be released today.
Counting as much expenditure as possible as aid has become increasingly important since the Prime Minister, John Howard, made his pledge to the United Nations 18 months ago to increase official aid to $4 billion a year by 2010.
But the Herald found that much of the money has never left Australia, and that 10 private companies held almost $1.8 billion in contracts let by the Government's official aid delivery agency - AusAID - last year.
The Government's special payments to Nauru through AusAID - used to provide the camps where Australia holds asylum seekers - was described by a former government official as a naked strategy to compensate the island for being part of the "Pacific solution".
"It's just an unmitigated bribe, while we preach the virtues of good governance and the rule of law to our Pacific neighbours," said Mark Thomson, who headed AusAID's Nauru program throughout 2003.
Examples of questionable aid identified by the Herald include:
- A $27,758 payment AusAID made to the Australian law firm Sparke Helmore for legal assistance during the Cole inquiry into legal breaches of the UN oil-for-food program has been counted as foreign aid.
"It was a cost incurred in the administration of aid program assistance to Iraq," said a spokesman for the Department of Foreign Affairs and Trade.
- Another $81,993 described as foreign aid to Afghanistan between 2002 and 2004 was an Immigration Department assistance package for temporary protection visa holders in Australia.
- Half a million dollars of last financial year's $23.4 million in aid for Nauru was to be spent on co-ordinating aid, while $1.3 million went on "logistics", providing housing, transport and other costs for Australian officials.
The $644 million aid to Iraq never left Australia and is really an export debt for wheat bought from Australian farmers more than 17 years ago. A Pitt Street government insurance agency which indemnifies exporters in risky markets paid out claims to grain growers 15 years ago. The Government paid the agency, the Export Finance and Insurance Corporation, and took on the debt, which it now classifies as aid.
"They always count the Iraq money when they show how their aid is increasing ... They are pulling the wool over Australians' eyes because the average Aussie wouldn't think that paying off a wheat debt, which in effect is just a book transfer ... [is] a good form of aid," Mr Wishart said.
However, the Department of Foreign Affairs and Trade said that under Organisation for Economic Co-operation and Development guidelines it could claim Iraqi debt forgiveness as official development assistance.
AusAID said all funds counted as official assistance fell within OECD guidelines.
A spokesman for the Foreign Affairs Minister, Alexander Downer, said he stood by AusAID's answer.
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Check out: http://www.smh.com.au/articles/2007/05/ ... 79584.html
http://www.aidwatch.org.au
to see where all the cash goes!
http://www.aidwatch.org.au
to see where all the cash goes!
Interesting first post. 80/20 principle. Usually, 80% of all the advertised cash goes straight back to their own pockets. 80% of the remaining cash goes to the people who help the initial 80% go back to the "donor's" pockets. Then from that, the measly 20% of 20% that actually makes it overseas? Yeah. . . 80% of that goes to the idiots who drive the SUVS in Cambodia.
It doesn't make sense but once you realize that 'aid' has nothing to do with any of this, you'll see that it makes plenty of sense . . .
It doesn't make sense but once you realize that 'aid' has nothing to do with any of this, you'll see that it makes plenty of sense . . .
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The Australian - the Nation Features
Expat pay absorbs aid to Cambodia
Mark Dodd
November 27, 2006
HUNDREDS of thousands of dollars of Australian aid is wasted on expatriate salaries and the running costs of big Cambodian-based international aid groups, hindering assistance to 40,000 landmine victims in the war-battered country.
A country director for a prominent international charity typically receives a $250,000 package that includes a spacious villa, four-wheel-drive and schooling perks.
As much as 80 per cent of aid paid to international aid organisations based in Cambodia goes straight out again in the form of high expatriate salary packages and running costs, said Chris Minko, head of the Cambodian National Volleyball League for the Disabled.
He said AusAID's reluctance to directly fund non-Australian aid organisations in Cambodia had created major inefficiencies in the disbursement of funds.
The CNVLD is a well-respected Cambodian aid organisation audited annually by KPMG and recently given a UN best practice award.
In contrast to many of the big aid groups in Phnom Penh, the CNVLD relies on volunteers, has neither a flashy office nor even a four-wheel-drive and pays modest salaries to its staff, most of whom are Cambodians. Yet it has so far been unable to receive core funding from AusAID despite its highly commended programs for landmine victims.
An AusAID spokeswoman denied the wastage claims, but confirmed 12.5 per cent of total funding for landmine victim assistance was paid to the Australian Red Cross to cover disbursement costs, leaving 87.5 per cent for "a variety of NGOs that work directly with victims".
The Howard Government is providing about $8million to help Cambodian landmine victims over the next two years.
Mr Minko called for an audit of the agencies to track the distribution of aid funding.
"About 80 per cent of aid money coming into Cambodia goes straight out again as it covers expatriate and adviser costs and that has been going on for a long time," he said.
His claims are backed by Cambodian Prime Minister Hun Sen, who has questioned the value of large expatriate-run aid agencies based in Cambodia.
While acknowledging the key role of aid groups in helping the war-battered country out of its economic morass in the early 1990s, the International Monetary Fund is also questioning the value of foreign aid in Cambodia.
Expat pay absorbs aid to Cambodia
Mark Dodd
November 27, 2006
HUNDREDS of thousands of dollars of Australian aid is wasted on expatriate salaries and the running costs of big Cambodian-based international aid groups, hindering assistance to 40,000 landmine victims in the war-battered country.
A country director for a prominent international charity typically receives a $250,000 package that includes a spacious villa, four-wheel-drive and schooling perks.
As much as 80 per cent of aid paid to international aid organisations based in Cambodia goes straight out again in the form of high expatriate salary packages and running costs, said Chris Minko, head of the Cambodian National Volleyball League for the Disabled.
He said AusAID's reluctance to directly fund non-Australian aid organisations in Cambodia had created major inefficiencies in the disbursement of funds.
The CNVLD is a well-respected Cambodian aid organisation audited annually by KPMG and recently given a UN best practice award.
In contrast to many of the big aid groups in Phnom Penh, the CNVLD relies on volunteers, has neither a flashy office nor even a four-wheel-drive and pays modest salaries to its staff, most of whom are Cambodians. Yet it has so far been unable to receive core funding from AusAID despite its highly commended programs for landmine victims.
An AusAID spokeswoman denied the wastage claims, but confirmed 12.5 per cent of total funding for landmine victim assistance was paid to the Australian Red Cross to cover disbursement costs, leaving 87.5 per cent for "a variety of NGOs that work directly with victims".
The Howard Government is providing about $8million to help Cambodian landmine victims over the next two years.
Mr Minko called for an audit of the agencies to track the distribution of aid funding.
"About 80 per cent of aid money coming into Cambodia goes straight out again as it covers expatriate and adviser costs and that has been going on for a long time," he said.
His claims are backed by Cambodian Prime Minister Hun Sen, who has questioned the value of large expatriate-run aid agencies based in Cambodia.
While acknowledging the key role of aid groups in helping the war-battered country out of its economic morass in the early 1990s, the International Monetary Fund is also questioning the value of foreign aid in Cambodia.
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Meanwhile the tycoons, relatives, senior military and police officers and ministers closely linked to the illegally felling some of the country's last, once-great forests.
International donors, who bankroll the impoverished Southeast Asian nation, do virtually nothing to stop the plunder.
When are the donors going to start addressing the asset-stripping?
International donors, who bankroll the impoverished Southeast Asian nation, do virtually nothing to stop the plunder.
When are the donors going to start addressing the asset-stripping?
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Not a country in history has ever started to make responsible decisions regarding the depletion of its natural resources until the majority of them are gone.
How many of America and Europe's great old-growth forests are left? None. Why? Because the power elites there consistently ignored the needs of their populations and environments in favour of amassing vastly concentrated wealth.
How are the majority of developed nations energy and mineral requirements secured? Through nepostistic, corrupt, elite-level business deals, overt or covert support of equally unsavoury regimes and ultimately through the barrel of a gun.
Starting to sound familiar?
There is simply no such thing as aid - merely politically motivated bribery for the purposes of bolstering the long term economic prospects of donor nations or for destabilising regimes not being seen to 'toe the line' (i.e not allowing corporate multi-nationals in to rape natural resources rather than letting the locals cash in).
The majority of aid never even leaves the country of origin or is absorbed through staff remuneration packages which allow the recipients to live far better than they ever would be able to in their home countries, often saving enough to purchase property on their return home.
There is simply no other industry on the planet which expends such considerable funds with no oversight or international regulatory body. This is why there are country managers in Cambodia earning US$20,000 a month plus the trimmings.
Human rights, good governance etc are merely smoke screens which blacken kettle and pot alike.
So who exactly is setting the standards?
How many of America and Europe's great old-growth forests are left? None. Why? Because the power elites there consistently ignored the needs of their populations and environments in favour of amassing vastly concentrated wealth.
How are the majority of developed nations energy and mineral requirements secured? Through nepostistic, corrupt, elite-level business deals, overt or covert support of equally unsavoury regimes and ultimately through the barrel of a gun.
Starting to sound familiar?
There is simply no such thing as aid - merely politically motivated bribery for the purposes of bolstering the long term economic prospects of donor nations or for destabilising regimes not being seen to 'toe the line' (i.e not allowing corporate multi-nationals in to rape natural resources rather than letting the locals cash in).
The majority of aid never even leaves the country of origin or is absorbed through staff remuneration packages which allow the recipients to live far better than they ever would be able to in their home countries, often saving enough to purchase property on their return home.
There is simply no other industry on the planet which expends such considerable funds with no oversight or international regulatory body. This is why there are country managers in Cambodia earning US$20,000 a month plus the trimmings.
Human rights, good governance etc are merely smoke screens which blacken kettle and pot alike.
So who exactly is setting the standards?
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Correct me if I am wrong, but didn't Lord Playboy come to Cambodia as one of those "foreign experts"?........keeping_it_riel wrote:
PM Hun Sen is also currently questioning the usefulness (or not) of vastly overpaid 'foreign experts' and where exactly all the money goes.
KiR
I hope he was actually useful ...
Naturally I am not claiming that he was "vastly overpaid"....
after all ones definition of "vastly" varies depending on your background and personal terms of reference....
cheers
LaudJohn
Last edited by LaudJohn on Sat Jun 16, 2007 5:41 pm, edited 1 time in total.
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Yeah, not like in other countries, where the governments work for free and have to get around on public transport.While I totally agree with the fact that money is wasted by paying exorbitant wages to NGO workers, people tend to forget that a lot more money is wasted by enriching corrupt, nepotist government officials and their cronies.
Who Gives a Fuck?
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