"Hypocritical" international aid system fails world's poorest

International aid agencies today rounded on the world's wealthiest nations for failing to reform an aid system they described as "uncoordinated, self-serving and hypocritical".

As International Development Ministers prepare to meet in Paris to try to improve the quality of their aid, a joint report from ActionAid and Oxfam says just one fifth of aid actually goes to the very poorest countries. And only half of this is spent on basic services such as education and health where aid can make a decisive difference in ending poverty.

ActionAid Policy Officer Patrick Watt said: "Our report tells a sorry tale of muddle and hypocrisy, dithering and stalling, with the world's poor cast unwittingly in the role of fall guys. If ministers in Paris fail to take the steps needed to make aid more effective, the UN's anti-poverty targets may end up as museum pieces in the Louvre."

Oxfam's Policy Advisor Max Lawson said: "You hear a lot of talk about the need for 'good governance' and 'accountability' in developing countries - it's time rich countries applied the same strict standards to themselves. There's now wide agreement that aid needs to be urgently increased, but we also need to know that every extra dollar is being spent effectively on fighting poverty."

The new report singles out the United States and Japan for special criticism. It says failure to reform the international aid system will undermine hopes of reaching the Millennium Development Goals, the targets aimed at halving global poverty by 2015.

The agencies accuse rich countries of:

- Using aid to reward strategic allies and pet projects at the expense of the neediest countries.

- "Tying" aid so developing countries are forced to spend it on overpriced goods and services from the donor country, reducing its value for money. Forty per cent of international aid is still tied in this way.

- Perpetuating a bewildering and byzantine aid system in which a plethora of at least 80 official agencies impose their own projects, procedures, conditions, and often competing objectives on poor countries. In 2002-2003 the Tanzanian government hosted 275 donor missions.

The OECD meeting in Paris this week is the only meeting all year wholly devoted to the quality of international aid. ActionAid and Oxfam are calling on donors to submit to monitoring of their aid by the OECD using a new set of quality benchmarks, backed up by an annual public review.