Ireland still leads the way for 'real' overseas aid

Ireland's overseas aid programme is more focused on helping the poor than any other Western donor's, according to a new report.

Up to 90 per cent of Irish assistance is "real aid" that benefits poor people in developing countries, according to the report by Action Aid.

In contrast, the report labels almost half the development assistance provided globally as "phantom aid" that is not genuinely available to poor countries to fight poverty. Such aid goes instead on expensive consultants, administration costs, double counting of debt relief, tied aid, donor aid allocated to political and commercial priorities, and domestic refugee spending.

One-quarter of overseas aid - $20 billion (€15.68 billion) in total - is spent on consultants, who are usually Western and ineffective, the report claims.

The typical cost of an expatriate consultant is $200,000 a year, of which more than one-third goes on school fees and child allowances - spending that would not be incurred if local expertise were used. In Cambodia, for example, consultants earn $17,000 a month, while government salaries are just $40 a month.

"Aid needs to help the poorest, not line the pockets of Western consultants," comments report author Romilly Greenhill.

While just 13 per cent of Irish development assistance goes on such "phantom aid", the corresponding figure in the US is 62 per cent. When this is discounted, Ireland is over five times more generous than the US in giving real aid to the poor.

This is the second year in a row that Ireland has topped the "real aid" ranking in the report.

Action Aid says the costs of an inefficient and outdated aid system are enormous: "Too much aid continues to be haphazardly allocated with little reference to need, tied to requirements that it be spent on donor countries' own companies, double counted as a debt relief, or lost through cumbersome and poorly co-ordinated procedures and systems."