Rich countries accused of giving 'phantom' aid

Friday, 27 May 2005 12:00 AM

Campaigning charity ActionAid has claimed that rich countries have been overstating the amount of money they give in aid to the developing world.

Its study of the G7 suggests that the level of aid given could have been overstated by two thirds.

ActionAid claims that such "phantom" aid includes expensive technical assistance, administration and double-counting debt relief.

This may achieve other purposes; but did not directly fight poverty it claimed.

ActionAid said only ten per cent of aid from France and America was "real". Britain was the G7's best performer with 71 per cent spent on "real" aid.

But the authors of the report, Romilly Greenhill and Patrick Wat, said less than 40p in every pound went directly to help eradicate poverty.

Patrick Watt, senior policy officer at ActionAid, said: "Among G7 countries the UK is the best when it comes to the proportion of its aid that really helps poor people. But the UK still spends too much on expensive consultants and administration, and it inflates its aid figures by including debt relief."

However, International Development Secretary Hilary Benn said the figures "just don't stack up".

He said it was "absurd" to suggest debt relief in the form of practical advice from technical experts was not real.

Britain has pledged to double aid for developing nations over the next decade and will press Japan and the US at the G8 Gleneagles summit next month to stump up more cash.

And earlier this week Europe agreed to double its contribution to development aid.

Britain is the G8 president this year and will assume the EU presidency in July.

The G7 is comprised of Britain, the US, Germany, Italy, France, Canada and Japan. Occasional partner Russia makes up the final member of the G8.

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