An enquiry has been demanded into the way some UK aid is given directly to the governments of some countries.  According to the Daily Telegraph

Figures from the Department for International Development show that over the past five years the UK has handed £1.6 billion to 15 of the world’s poorest countries. But research from campaigning group Transparency International shows that many of these rank highly in its corruption index of 180 countries.

There are several points to make about this:

1. There is no evidence that aid has been subject to corruption
   Transparency International does not claim (pdf) to have found any evidence of corruption in the use of UK aid. The Daily Telegraph report says that that some countries to which the UK gives budget support score poorly on the TI corruption index. But it does not follow that any of that aid is being corrupted and there is no evidence in the TI report that it is.
2. Budget support is no more likely to be subject to corruption than other forms of aid
   A major, multi-donor review of budget support found

   “Corruption is a serious problem in all the study countries, but the country study teams found no clear evidence that budget support funds were, in practice, more affected by corruption than other forms of aid.

   Indeed, the Conservative Party policy review on Globalisation and Global Poverty notes:

   Many oppose Programme Support, and particularly General Budget Support, because of worries about corruption. However, other modes of delivering aid are also prone to corruption.

   The same TI report hightlights extensive corruption in conflict, reconstruction and post-conflict contexts (which are not typically the places to which the UK gives budget support). The report highlights the risk of corruption in tied aid and the risk of bidder collusion in aid tenders (both of which are reduced by budget support).  In other words, in countries in which corruption is high, all aid will be at risk of corruption.  Moving aid from budget support to other forms of aid does not reduce that risk.

3. Giving budget support enables donors to tackle corruption
   Corruption is very bad for a country, especially for the poor.  If donors are serious about corruption, they should be trying to reduce corruption as a whole, and not just protecting their own money. Experience suggests that when donors bypass a country’s budget, procument and auditing processes they are less likely to take an interest in tackling broader corruption. When they are interested, they have no basis on which to get involved, since none of their money is at stake.  If donors want to help to reduce corruption they have to engage with the country’s processes. Budget support not only forces donors to do so, it turns them into legitimate stakeholders in helping to improve those systems.  This engagement helps address corruption in the whole of the government budget, and not just that part financed by foreign aid.
4. Using other forms of aid is a less effective way to reduce corruption
   Again in the same report, Transparency International say that making aid more accountable to donors is less effective at reducing corruption than steps to increase domestic accountability:

   Upward accountability by recipient countries to donors has demonstrated its serious limitations in terms of relevance as well as in its ability to detect corruption. Rather strengthening the accountability of aid toward intended beneficiaries is the most effective way of limiting abuses.

   In other words, Transparency International itself does not believe that replacing aid that is locally accountable with aid that is accountable to donors is a good way to reduce corruption.

5. Budget support improves local accountability and so tackles the broader problem of corruption and financial management
   The Conservative Party policy review observes:

   “if aid is channelled through the government budget and is accompanied by steps to strengthen public financial management, the handling not only of donor funds but of tax revenues is improved. In addition, Budget and Programme Support make it easier for parliaments, the media and electorates to hold government accountable for how aid money alongside tax revenues are spent.”

   Because budget support provides donors with an opportunity to engage in reform of the public finances as a whole, and because it increases rather than reduces local accountability, it is likely that  budget support will result in less corruption in the long run than alternative forms of aid.

6. There is a cost to switching away from budget support
   Switching aid away from budget support to other forms of aid comes at a cost: on balance it reduces the effectiveness of that aid, so reducing the the overall impact on development; and it may reduce the ability of the country concerned to tackle the very problem of corruption that we profess to be concerned about.  The Conservative Party policy review said that:

When donors create parallel structures to deliver aid they can undermine both government ownership of policy and its ability to deliver (by recruiting scarce talent). So where aid can be effectively delivered through government or departmental budgets that is desirable.

In conclusion: donors are right to be concerned about corruption, but there is no reason to think that corruption is reduced, either in aid or in the country as a whole, if donors switch their aid from budget support to other forms of aid. On the other hand there are costs to doing so - in the form of reduced aid effectiveness, which means more people dying, as well as slower progress towards systems that are more accountable and less susceptible to corruption in the future.

So it does not follow that because some countries perform badly on the TI corruption perceptions index, that it is a bad idea to give those countries aid in the form of budget support.  Perhaps that is why the TI report itself explicitly counsels against that kind of reasoning:

Some governments have sought to use corruption scores to determine which countries receive aid and which do not. TI does not encourage the use of the Corruption Perceptions Index (CPI) in this way.

Alanna Shaikk writes about the good and bad of working in international development.  Here is a big part of the bad:

… You’re a bureaucrat. An awful lot of every expat’s job involves paperwork. Most people picture international work as feeding hungry people, providing health care to refugees, or building schools. In reality, it makes no sense to pay an expatriate to do that. Instead, we do what cannot be hired locally: English-language paperwork. We write reports to HQ and donors, proposals, and program guidelines. We write even more reports. We can go days without seeing anybody who is helped by our work.

This is a very acute observation, and it is confirmed by what I see here in Addis every day.

It seems to me that we must de-escalate the amount of paperwork involved in international development.

There has to be some record-keeping to enable us to account to the people whose money we are spending.  But the bureaucracy involved in designing and getting funding for projects, for hiring people, and for monitoring and reporting, has become an industry in itself. 

Akvo is promoting “Really Simple Reporting (RSR)” which is intended to simplify reporting.

The Skoll Foundation is also apparently working on a common reporting format to simplify the paperwork for grantees of US foundations. (I can’t find anything about this project online.)

I think the time has come for all donors - government agencies, international organisations, private foundations, and NGOs - to adopt a common reporting format for their grantees, so that each organisation can provide information about finances and performance in a single report - possibly provided online - on which all their funders can rely. 

The people whose money we are spending - taxpayers and individual givers - don’t want to pay people to fill in forms; and the people who work in development don’t want to do it either.  A common reporting format would also make the information more comparable and useful.

Today is World Food Day. There are 967 million people living below the hunger line.

In one of DFID’s splendid new blogs, Howard Taylor, Head of DFID Ethiopia , emphasizes the need for greater agricultural production:

In the long-term, development assistance needs to prioritise agricultural growth and productivty, if we’re to make sure that in years to come everyone, no matter where they live, has enough to eat. In a nutshell, that’s what World Food Day is all about.

Today is a good day to remember Amartya Sen’s book Poverty and Famines, which was written partly about the the Ethiopian famine of 1972-74, and for which he was awarded the Nobel Prize.  It begins with this profound observation:

Starvation is characteristic of some people not having enough to eat. It is not the characteristic of there being not enough to eat. While the latter can be a cause of the former, it is but one of many possible causes.

This is a thought of enormous importance.  For most of the 967 million people who are hungry, the problem is NOT that there is not enough food, it is that they are too poor to buy it.

We should be cautious about pursuing a policy focused on increasing food production.  Our goal should be to increase the incomes and wealth of those who currently live in hunger and other forms of extreme poverty, so that they can exercise entitlement to the food and other things they need.  Increasing agricultural productivity is one way to improve the incomes of the rural poor, but it is not necessarily the best way, and so it may not be the way of reducing hunger.

Update: more here.

The BBC sub-editor picked an angle, with the headline Prudence pays off in Ethiopia and the teaser:

With the financial turmoil affecting many of the world’s economies, Elizabeth Blunt in Addis Ababa considers how Ethiopia and other parts of Africa may escape the worst of the credit crisis.

But that headline does not seem to be consistent with the rest of the article which goes more like this:

Over the past few years, Ethiopia has been having something of a boom of its own, and Addis Ababa is littered with building sites.

But a lot of these ambitious construction projects seem to have got stuck halfway. Some may have run out of cement, but others, even more of them, have probably run out of money.

… In all of this, the only money coming in from outside that is a significant flow in most African countries might be remittances from workers overseas.

I think the financial difficulties might hit Ethiopia, and other African countries, pretty hard; especially if remittances dry up, investment (such as it is) falters, and rich countries become more protectionist and less likely to give aid.

About 12-13 million Ethiopians need food relief or emergency assistance as a result of the failure of the short rains in southern Ethiopia, according to AFP:

The lack of rain in the main February to April wet season has left at least 75,000 Ethiopian children under age five at risk from malnutrition, OCHA said. …

The United Nations appealed in June for 325.2 million dollars mainly for drought victims . Only 52 percent of the appeal has been met.

I don’t understand how this can happen. We presumably knew - or could have known - in April that the short rains had failed, and that there would be hunger in southern Ethiopia. So how is it that we find ourselves in September - at least 4 full months later - and we’ve only raised half the money we need to prevent people from dying of hunger?

I am told that the food shortages were accurately predicted by the experts as early as May. But this predictions don’t translate into political pressure, and thus funding, until there are pictures on TV of children with distended bellies and flies on their face.

So the question for the future is: how can we translate warnings about food shortages into a flow of the necessary resources without having to wait for people to start to die?

This is the entrance to a tiny 13th Century Rock Church in Tigray, called Abuna Yemata Guh. And yes, that’s a narrow ledge you have to walk along, with a 200 metre vertical drop to your left, at the end of a terrifying ascent up the side of a cliff to get there.

The dangerous climb is rewarded with an extraordinary church, carved into the rock, with glorious paintings.

More photos here or as a slideshow.

I’ve been puzzling for a while about why food prices are rising here in Ethiopia. Teff, the local grain, has trebled in price from about 400 Birr per quintal to about 1,200 Birr for the same amount. There is almost no global trade in teff, so it does not seem to be an effect of rising global teff prices. Teff production has been at high levels for four years, according to Ethiopian government statistics (which may be inaccurate); and there is no obvious reason why overall food demand should have increased enough to cause such a sharp increase in prices.

A few weeks ago, Javier Blas in the FT, offered one possible explanation. He said that the problem was abnormally high demand, driven by substitution effects:

United Nations’ agriculture and food aid officials said that record prices of imported food have prompted a substitution effect, boosting the demand - and the price - of indigenous staples such as yam, sweetpotato, sorghum, cassava, millet or teff in Africa, Latin America andparts of Asia.

I’d be surprised if the price of teff would treble as a result of the rising price of substitute products, though I suppose this is theoretically possible.

Yesterday, Barney Jopson, also in the FT, apparently reporting from here in Addis, offered a different explanation:

The crisis has been magnified by local factors – drought, hoarding, and a splurge of public infrastructure investment that has left the finances of the country’s cash-strapped government under strain.

Unfortunately, Jopson doesn’t offer us any evidence for any of this. Who are these people “hoarding” teff, and where is it? In which parts of the country has drought caused a reduction in teff production, and by how much has the supply of teff fallen, overall? I’m particularly at a loss to understand Jopson’s thought that investment in public infrastructure would lead to rising food prices (though I can see why it has made it more difficult for the Government of Ethiopia to use subsidies or tax cuts to offset the effects.)

I’d like to see some more thorough reporting of teff production. My hunch is that food production figures  have been flattered by official statistics in recent years, possibly to bolster GDP growth figures (agricultural production being a substantial share of GDP), and that the government has run down domestic teff reserves to make up the difference between actual and reported production. Now that the reserves are running low, the tightening of supply is leading to the increase in prices. But I have no more evidence for this than Jopson’s theory that it is because of hoarding.

In a slightly whimsical account of Bill Clinton’s trip to Ethiopia in The Guardian, we find this:

Awke Tiruneh and his wife Emaye Beyene are not the only couple who are faintly bemused. They are pleased with their two lightbulbs, one in the main room and a second in the kitchen annexe of their pristine mud hut, and with the radio that everybody in Rema tunes to get music, not news. But they say they don’t want anything else.

“When they have more money, they don’t know what to do with it in Rema,” says Samson Tsegaye, country director of the Solar Power Foundation. “They are happy. They don’t need a Mercedes or a television. When they have money, the men are always going to the bar.

The idea that the people of Rema “don’t want anything else” seems improbable to me. I am all for looking at consumerism with a sceptical eye; but there is a world of difference between conspicuous consumption and having enough money to send your children to school, or to afford health care, or to have what you need to cope with the failure of the harvest. And why shouldn’t the people of Rema have a television if they want one? Does the country director of a western NGO really speak for them?

In Le Monde, David Martin has a rather intelligent piece about aid to Ethiopia:

Major operators such as Difid, the British government arm, and USAid play a cat-and-mouse game with the government (GoE) because Meles is sensitive about external pressures in an environment in which domestic critics are almost silenced and expatriate websites blocked. Yet donor aid contributes at least 20% of GNP to a precarious economy, so cash can’t be turned away.

Donors are aware of their power and responsibility. With the Ethiopian opposition parties in disarray (1) they are the only real curb on Meles. Big-time donors (the World Bank via the International Development Association, UNDP, the US, the UK, international NGOs) work through GoE to agreed MDG objectives set out in the government’s plan for accelerated and sustained development to end poverty (PASDEP). Cash goes to approved projects administered by Ethiopians.

I do wonder about the role donors should play when the domestic political opposition does not exist or, as in this case, is in disarray. It is tempting for donors to step in to the gap and provide the necessary checks and balances. But in the end this undermines the space for parliament and opposition parties to hold the government to account.

So my view is that donors should avoid playing this role: not because I don’t think it is important to hold governments to account but because I do.

Google has

launched Google News in English for Nigeria, Kenya, Ethiopia, Tanzania, Zimbabwe,
Namibia, Ghana, Uganda and Botswana allowing users to search and view news in
localized editions, and helping dozens of African news sites make their stories
available to users worldwide.

Google News Ethiopia is here: http://news.google.com.et/