In a last-minute rush to hit Prime Minister David Cameron’s foreign aid target, the Department for International Development (DfID) threw over half a billion pounds of taxpayers’ money at a controversial Swiss-based fund. Critics say the gift to the celebrity-backed Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund) was pushed through in breach of the government’s own donation rules so it could “feel proud” of itself.
In order to burnish the modernising credentials of the British Conservative Party, the Prime Minister gave his personal backing to legislation committing the British government to giving 0.7 per cent of annual GDP to foreign aid. In today’s money that represents about £12 billion.
The Times reports an inquiry by the National Audit Office (NAO) which showed DfID promised the donation in December 2013. In an act familiar to anyone who observes government spending patterns approaching the end of a budgetary year, Whitehall chiefs committed £415 million extra to the Global Fund with days left to meet their foreign aid target. In doing so they increased Britain’s commitment by 324 per cent to total £543 million for the year.
Claiming they believed Britain’s generosity would prompt other governments to up their donations, the hurried gift ended up breaking DfID’s own rules. The British government’s policy was to cap contributions at 10 per cent of the fund’s entire budget, but it more than doubled that to provide more than a fifth when other donors failed to emerge.
This allowed the government to trumpet its own achievement of hitting the arbitrary foreign aid target it had set itself for the first time. Earlier this month Cameron labelled Britain “the engaged nation” – the only major country meeting both its NATO commitment of 2 per cent of national income being spent on defence and its commitment to the world’s poorest.
The politically convenient last minute rule-breaking donation could almost be justified were it well spent. Unfortunately that defence cannot be made on this occasion leaving critics to point out, as The Times says:
“…it betrayed a fundamental misunderstanding of the purpose of overseas aid. The point is not to spend enough money to feel proud of ourselves. It is to alleviate poverty and eradicate disease. Those difficult objectives are better served by cautious pragmatism than arbitrary targets. There have been few clearer demonstrations of this rule than the travesty of the Global Fund.”
The Global Fund was created in 2001 by G8 leaders and enjoys celebrity support from the likes of U2’s Bono and Carla Bruni-Sarkozy (pictured above in Burkina Faso on her first trip as a goodwill ambassador for the Global Fund), the musician wife of the former president of France.
Unlike other relief funds it does not directly supply health services but channels money to selected organisations working in afflicted countries. It claims to have funded the distribution of 548 million anti-milarial nets, but the problem of misuse is so high that some African nations have threatened offenders with prison.
The Times has found that insecticide-coated nets are being used to make wedding dresses, protect chicken coops, catch fish, strain bananas and catch white ants, a traditional Ugandan snack. Tanzanian medics fear the water of Lake Tanganyika has been contaminated by the carcinogenic insecticide in which the nets are coated at the same time as fish stocks are threatened because the fine mesh catches fry before they can breed.
The Global Fund’s own investigation into operations in Nigeria showed the National Malaria Control Programme submitted at least 73 fictitious airline ticket claims and bought overpriced vehicles and computers. Another local poverty relief organisation in Nigeria, The Society for Family Health, overcharged the fund for 426,000 mosquito nets.
Allegations of misspending are not limited to Global Fund’s external activities. It almost collapsed in 2011 amid reports of fraud and infighting. At that point Gabriel Jaramillo, a Colombian banker, was appointed as temporary general manager to rescue it. When he left the role in 2013 he said governance procedures were still inadequate.
The 600 Geneva-based staff of the Global Fund receive average annual remuneration packages in excess $200,000, representing $125,000 salary plus “health insurance, retirement and other benefits that in some cases compensate staff for the costs of moving and resettling from overseas”. Currently paying $13 million a year to lease office space, the fund has commissioned what The Times describes as “a showpiece, architect-designed headquarters with a 360-space car park in the Swiss city”.
It has been calculated that the British taxpayers’ contribution to the Global Fund now exceeds the £154 million spent on the Maritime and Coastguard Agency and the £374 million for Great Ormond Street Children’s Hospital. Even the £469 million spent on the Bank of England falls short of the £543 million DFiD gift. The £36 million Sovereign Grant to the Royal Family is a bargain in comparison.
The Chief Executive of the TaxPayers’ Alliance, Jonathan Isaby, said:
“Foreign Aid is no doubt part of building a sustainable future in developing countries, but tying spending to an arbitrary figure is nothing short of nonsense. We have heard too many tales of DfID shovelling money out of the door when the spending deadline looms, either to extremely well-paid staff in Geneva or to unaccountable consultants. It is a scandal that we now base the success of our aid programme on how much is spent rather than asking if it is actually helping the world’s poorest, and that has to change.
“The question must be asked: is our aid policy designed to improve the lives of people in the developing world, or simply for feel-good headlines?”
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