Foreign aid money feeds fat profits for corporations

Foreign aid is a joke and a racket. As the late Peter Bauer once said, it is "an excellent method for transferring money from poor people in rich countries to rich people in poor countries."

AUSTRALIA'S booming foreign-aid program is delivering handsome profits to a group of seven corporations that has scored a staggering $1.81 billion in taxpayer-funded contracts.

But the lack of scrutiny of their profits, and huge sums being provided to agencies such as the World Bank, which receives $450 million a year, is under challenge.

Aid experts and the Opposition are demanding greater accountability for the money being spent to tackle global poverty.

GRM International had $500 million in AusAID contracts over the past 18 months, including $92 million to encourage Africans to study here.

Cardno, which lists former defence chief Peter Cosgrove on its board of directors, and which reported a record $59 million profit last year, has $442 million in contracts.

Coffey International booked $353.4 million in contracts, including $31 million to weed out corruption in Papua New Guinea.

The dividends for shareholders and executives will grow even fatter because Australia's aid budget is forecast to soar to about $8.5 billion by 2015-16.

Foreign Affairs Minister Kevin Rudd has pledged to spend record sums trying to tackle poverty in some of the world's poorest countries, but the rise in spending is causing resentment among ministerial colleagues.

Contract information listed on the Government's AusTender site shows SMEC International, which grew out of the Snowy Mountains scheme, had $202.9 million in contracts since July, 2010.

Aid money is also encouraging global firms to establish Australian branches, including the US-based URS, which had $170 million listed in contracts.

Stephen Howes, part of the high-level review of the foreign-aid program, wants a "greater level of scrutiny", particularly given the large increases in funding.

"There are risks that as quantity goes up, quality goes down," said Prof Howes, who is director of the Australian National University's Development Policy Centre. "As the money goes up, the scrutiny should go up as well," he said.

The review recommended the Government establish an independent evaluation committee to oversee AusAID's effectiveness in delivering tangible results.

Coalition foreign affairs spokeswoman Julie Bishop is demanding Mr Rudd urgently announce how he plans to better measure performance benchmarks of the aid program, as recommended by the review.


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