Originally Posted by Aprender
I have been working in development area for 10 years.
You should know that when it is written in the official release about donor country A gives X amount of dollars of foreign aid is beneficiary country B, it does not mean that ALL X amount of dollars are received by country B.
For example, US government through USAID pledged USD100 millions grants to Indonesian government in a project to develop capacity of school teachers.
This does not mean the Indonesian Government receives USD 100 millions in cash.
To manage the project, USAID as the administrator of the grants would contract a US company (usually a beltway contractor, a reference to those US development contractors in Washington DC, such as DAI, Chemonics, RTI, etc) to manage the project. ONLY a US company is given the right.
Now, out of those USD 100 millions, a certain 10% or more are paid to the contractor as management fee.
then the contractor would hire people; the chief of party, deputy chief of party and all key personnels are usually americans, and they are paid far larger amount of salaries than locally hired, usually 10x as much, plus other benefits such as free housing, school fees for their children, cars and drivers, etc. The contractors also normally fly in consultants from the US for short periods, and they are paid around USD 1,000-2,000/day. These costs and including other operating costs would take out more than 30% of that USD 100 millions.
and so you have USD 50 millions dedicated to the project, but more chunk of money are taken out for travel, accommodations, per diem, etc etc.
In the end, very little of that USD 100 millions that actually spent on "developing capacity of school teachers"
And I gave you the strictest scenario. some other loans, especially by world bank and IMF actually are stolen more than 30% by government officials (Jeffrey winters, 1997) while world bank and IMF officials were completely aware such theft were happening. Their objectives were only to loan out or disburse money as fast as they can, as world bank officials are actually paid commissions on the basis of the amoung of money that they can loan out to foreign governments.
So when you read "US government donated USD 1 trillion in the past 40 years to Africa", that means USD 500 billions went back to the US in the forms of fees, salaries, equipments, services, etc. while USD 400 billions were siphoned off by african leaders who in turn store the money back in european or US countries.