If the aid industry was a country, it would today represent the fifth world economy. Immediate relief, developing work and post-disaster reconstruction has an annual overturn of 120 billion dollars, with an expected growth towards 150 billion in the coming years. This charitable industry has become very big business.
Former World Bank and world economist William Easterly shows in his book ‘The White Man’s Burden’, that the countries which received the most aid in the last 50 years, show negative economic growth today. Dambisa Moyo writes in ‘Dead Aid’ that the Sub-Saharan African countries have received 300 billion dollars since the 1970’s, but are still among the poorest in the world. This as opposed to countries that received relatively few and mainly ‘did it themselves’. Some of them are now world economies or on the rise, such as China, Japan, India, Turkey and Brazil.
It is estimated that the overall efficiency of this industry lies around 10 to 15 percent. So what happens with the majority of the money, where does it go? A vast amount goes directly to governments, often regimes with reputations of corruption and conflict. A lot of money is wasted on mismanagement caused by insufficient knowledge of what is really needed. But mostly we simply don’t know (or do not want to tell) where exactly it all went. Since 1946 the World Bank, the world’s largest donor, has roughly spent 500.000.000.000 dollars on developing aid. It was publicly reported that in the period 2000-2005 they had only evaluated 2 percent of all their executed projects. Transparency and accountability seem to be absent at most mayor organizations. Try that at your own job!
As money attracts people, this lucrative business has grown explosively in the last 30 years. After the tsunami reconstruction effort in Sri Lanka, where around 1.500 national and international organizations were present, a thick evaluation report concluded: ‘The same amount of work could have been done with a third of the expats, half of the organizations and half of the money’. The international community actually agreed with this and promised change. Five years later we see between 12.000 and 15.000 organizations running around in Haiti.
Lately the market is being flooded with a boom of so-called Mongo’s, which stands for My Own NGO. People that are fed up with the inefficiency and wastage, people that feel they can do better, spontaneously driven to save humanity out of the goodness of their hearts. And yes, they work very local and very direct, but the local knowledge is insufficient and their feedback is low. After the 2004 tsunami 60.000 Mongo’s registered worldwide, and in 2008 in the US alone over 150.000 Mongo’s were registered. Such additional armies of do-gooders can easily block the logistic system, as we now see in Haiti. Two years after the earthquake only 2 percent of houses has been rebuilt, mainly due to a traffic jam of aid.
If we look at the general picture, it seems safe to assume that something is going terribly wrong, that things are way out of proportion. I must be honest, I am just a simple architect, so I really would not know how to tackle problems of this magnitude. But it would already be a great step if we could at least acknowledge that this industry is out of control and that this is not the way to continue. The time has come to start educating a next generation of world improvers. Preferably not dictated from the top, but starting at the bottom; for and with the people it is all meant for! A category that was not even mentioned yet in this piece…
- Martijn Schildkamp / Advisory Board Member + Faculty