By Archie Law, CEO of ActionAid Australia
With the current discussion going on about the proposed cuts to the Australian overseas aid budget, there are plenty of misconceptions and downright falsehoods being bandied about. Here are a few of the most common myths about overseas aid – busted.
1. “If we keep giving people money they will never learn to look after themselves.”
Not all aid is created equal. The kind of aid that helps support dramatic decreases in aid dependence is what ActionAid calls Real Aid – that’s aid which empowers poor people to realise their rights. It might do this directly by supporting smallholder farmers or building schools, or indirectly by helping to create better tax systems and governance.
Real Aid is accountable, transparent, and gets the most out of every dollar spent. It supports developing countries to make their own decisions.
Real Aid is actually making poor countries less aid dependent. For example, 14 of the 30 most aid-dependent countries in the year 2000 had reduced their dependence on aid (the percentage of government spending that comes from foreign aid) by more than 20% by 2009.
2. “We can’t afford to give money away to people overseas when we have poor people in Australia. Charity begins at home.”
It’s not a case of ‘either or’. The Australian Government spends over $125 billion a year on welfare compared to $4.5 billion on overseas development. Only $1 in every $30 spent on charity is spent overseas.
Australia is the 14th richest country in the world. And yet the currently amount spent on aid represents only 35c in every $100 of our national income, well below average compared to other developed countries.
3. “Aid doesn’t work. Look how much we’ve already spent and people are still poor and dying of diseases and starvation. What’s the point?”
Not true. Arguing that because aid is found in countries that are poor, it must be the cause of low growth, is like arguing that fire engines cause fires because they can be found at the scenes of burning houses. Real Aid that genuinely targets poverty is very effective.
Real Aid has contributed to halving the number of people in poverty since 1990 and reduced the number of children who die needlessly by 10,000 a day. A DAY.
But despite this huge impact, the world spends less money on Real Aid than it does on video games (see Real Aid – 3, Reuters Online June 2011). Puts the whole thing in perspective, doesn’t it?
4. “Aid is wasted on corrupt regimes. Look how much money all those African politicians earn!”
Aid FIGHTS corruption. Real Aid, which empowers poor and excluded people to stand up for their rights, has been used successfully to combat corruption by investing in independent auditing, free media, community accountability, and parliamentary structures.
Aid also empowers poor countries to increase tax revenues from their wealthier citizens, boosting the amount of money earned to be spent on vital services that help the poor. And speaking of corruption, developing countries lose more money due to tax-dodging by global corporations than they receive in foreign aid every year (see Death and Taxes, Christian Aid, 2008)
5. “Aid money is wasted by NGOs who spend it all on administration, not helping the poor.”
A little administration goes a long way. NGOs on average spend less than 20% of the money they receive on administration, and independent assessments have found that spending less than this actually increases the likelihood that donations will be ineffective. Would you buy a car because 90% of your dollar went to building it, and only 10% towards designing and testing it?
Money spent to run programs efficiently makes sure aid is effective for the people it’s supposed to be helping. That’s a sound investment in quality control, not money wasted.
Archie Law is currently the Chief Executive Officer at ActionAid Australia (formerly Austcare). Archie has worked in conflict affected environments throughout Asia, the Middle East and Africa. Prior to joining ActionAid, Archie worked for the United Nations Development Program in South Africa and the UN’s Peacekeeping Operations in New York.
*This is a crosspost with ActionAid Australia’s original blog post here.