Quarter of development aid budget to expensive consultants

06 July 2006 Consultancy.uk

Nearly half of the $79 billion that developed countries spend annually on development aid, does not go to the developing countries but to highly paid consultants. This emerges from a study conducted by the British development agency ActionAid.

25 percent for consultants

Using official figures ActionAid calculated that 'ineffective' and 'overpaid' western consultants annually receive $20 billion dollars. Approximately half of that amount is spent on salaries. The fees received by western consultants stand in stark contrasts to the fees received by local advisors. A consultant active in Cambodia received a monthly salary of $17,000 while a local official in Cambodia received $40. De rest of the $20 billion dollars is spent on expenses, allowances and school fees for thechildren, often at expensive private schools.   

Foreign aid

The United States, Portugal, Greece, and France are the biggest perpetrators in this regard. 82 cents of each dollar spent on aid in Portugal never reaches its intended destination.

Foreign Aid

Besides the huge spending on consultants western countries additionally waste aid money because too much money goes to countries that do not need it. The distributions of the budget are often political considerations. For example, Two-thirds of the additional help of the United States went to Afghanistan and Iraq in recent years.

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