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Aid and Corruption

The below speech was made by the author in the House of Lords on 1 April 2019 in the House of Lords

My Lords, the World Bank identifies corruption as a major obstacle to ending extreme poverty by 2030 and its detrimental effect on the poorest 40% of people in developing countries. It is estimated that, every year, up to £2 trillion is lost globally to corruption.

My brief remarks will centre on the dangers of corruption in the post-conflict, post-ISIS Iraq referred to by the noble Lords, Lord McInnes and Lord Anderson, and on British aid to Pakistan—I should declare that I am co-chair of the Pakistani Minorities All-Party Group and visited Lahore and Islamabad last November.

On 11 October 2017, Ministers confirmed to me funding for 80 projects benefiting Yazidis and 171 benefiting Christian communities targeted by the ISIS genocide; £40 million had been earmarked for urgent humanitarian assistance and more than £25 million for UN stabilisation efforts.

On their return to the region, 746,000 Iraqis from minority communities were meant to benefit from these Funding Facility for Stabilization projects managed by the United Nations Development Programme.

Over subsequent months, news circulated that the money was not reaching the affected communities.

One of the main reasons for this failure was corruption. NGOs drew this to the attention of the Government and I attended a meeting with Ministers at which the details of a phantom project were described.

At the end of 2017, in response to a freedom of information request, the Department for International Development refused to provide information describing how these projects were benefiting those minorities and how they were being implemented.

DfID relied on several exceptions, saying that disclosure would or might prejudice relations between the United Kingdom, Iraq and international organisations or courts, and would or might prejudice the prevention or detection of crime. In reality, the information could easily have been disclosed without identifying any details that could jeopardise the various interests cited.

As many NGOs assisting survivors in Iraq insist that the money does not reach the intended recipients, such a lack of transparency is extremely disturbing.

Retrospectively, DfID now uses independent monitoring, which should have been in place from inception, rather than coming into play months if not years after the projects began.

Perhaps the Minister can tell us what the department’s current assessment is of the situation in Iraq.

What issues concerning corruption have been detected, how have they been addressed, what steps have been taken to address the issues identified by several NGOs and raised in 2018 in a letter to the Government from Dr Russell Blacker on behalf of the National Caucus for the Persecuted Church acting on behalf of communities targeted by ISIS?

This is public money and taxpayers are entitled to know the answers.

When comparable concerns about corruption in Iraq were raised with the US Administration, they responded with admirable urgency, transparency and openness, initiating internal inspector-general investigations into the final destination of US funds sent to the UNDP Funding Facility for Stabilization. The UNDP has itself initiated several internal investigations into allegations of corruption, and we should do the same.

A comparable challenge applies in Pakistan, which receives a staggering £383,000 of British taxpayers’ money every single day—£2.8 billion over 20 years.

The World Economic Forum identifies corruption as the third-greatest problem for companies doing business in Pakistan, after government bureaucracy and poor infrastructure. It affects all Pakistanis but it disproportionately affects vulnerable populations—the poor, women, and religious minorities. In its report Equality in Aid, the International Dalit Solidarity Network recommended that DfID should prepare vulnerability mapping tools, inclusion monitoring tools and methods for inclusive response programming, issues I have probed with the Minister in Questions for Written Answer.

Two weeks ago, I sent him news reports that one of the top three DfID spending programmes in 2018-19, the Khyber Pakhtunkhwa Education Sector Programme, which secured £41 million, also needs to be carefully scrutinised.

I know that the noble Lord, Lord Bates, has asked officials to do that.

It is alleged that in several districts, money allocated to establish new educational institutions and refurbish schools was misappropriated and that these are phantom projects—ghost schools.

How does the Minister intend to establish the facts? Waiting for NGOs or newspapers to report such cases simply is not good enough.

I therefore hope that today’s debate will point us towards the far more rigorous and effective use of British resources.

About Lord David Alton of Liverpool

Profile photo of Lord David Alton of Liverpool
For 18 years David Alton was a Member of the House of Commons and today is an Independent Crossbench Life Peer. He began his career as a teacher and, in 1972, while still a student, he was elected to Liverpool City Council as Britain’s youngest City Councillor. In 1979 he became the youngest member of the House of Commons and, in 1997, and when he stood down from the Commons, he was appointed a Life Peer. His motto on his Coat of Arms is taken from the Book of Deuteronomy: Choose Life.

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One comment

  1. It is interesting that the World Bank itself is no paragon – see

    https://www.forbes.com/forbes/2012/0716/feature-world-bank-robert-zoellick-too-big-to-fail.html

    World Bank projects are often the focus of corruption:

    http://webdoc.france24.com/corruption-developpement-banque-mondiale/

    In fact, if you search for World Bank Corruption on the Internet you wonder if their reports on their own ANTI-corruption activity are not intended to bury the third party reports on their own corrupt behaviour.

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