Bill Gates is wrong: there’s plenty of corruption in health aid

January 27 2011

Fascinating and rare interview on Channel4 News tonight with Bill & Melinda Gates talking about their anti-polio vaccination program. There are lots of potential criticisms of the Gates Foundation. For example, the polio program, they say, costs a billion dollars a year – is that the best use of that money? Personally, I’m uncomfortable with the fact that the Foundation is the world’s most philanthropic organisation, but is relatively unaccountable, and the system that allows one couple to amass that amount of money in the first place is probably broken.

On the whole, though, this is a bit churlish. The Gates Foundation does do good work that otherwise wouldn’t get done and we live in an imperfect world with imperfect solutions, and all that. I do, however, disagree with Bill’s line early in the video (around 2.30) that “health aid really is not much affected by corruption”.

Here’s how it was explained to me in Zambia a couple of years ago. Aid agencies and governments decide to donate medical supplies to poor countries, say a bunch of CD4 measuring devices for HIV/AIDS victims. Rather than just shipping a few crates of the monitors to the hospitals that need them, the recipient government is given the money to buy the devices from, say, a European company that makes them.

Not hugely objectionable, indeed, possibly a great way of stimulating economic growth in both countries at the same time. But what happens is that every government official who deals with the transaction wants to take a ‘commission’ or cut, because that’s the ‘traditional way of doing business in Africa’ (their generalisation, not mine) you’re told. The Europeans can’t agree to this, because that would be seen as corruption, which they can’t sanction. Even though they’ll take their own legal cut from the deal, which we call profit.

Instead of confronting the issue head on or alerting the relevant anti-corruption watchdogs, the European company doesn’t want to lose out on the highly lucrative deal, or jeapordise future business, so it comes up with a plan.

The supplier sells the montiors to a local distributor, who handles all the dealings with the government and makes sure the right palms get greased. The distributor, naturally, also takes a cut for its efforts in ensuring the smooth flow of business.

The upshot of which, of course, is that far fewer CD4 monitors arrive with the impoverished AIDS victims who need them. Goodwill is lost between donor and recipient nation and everyone gets a little more world weary and cynical next time the call goes out for help.

This may all seem rather innocuous given the flagrant abuses of aid money in some areas. But it’s just the iceberg’s tip. Don’t take my word for it – Sweden announced just three days ago it was cutting its support for the Global Fund to Fight AIDS, TB and Malaria because of graft.

Ironically, the GFFATM (I don’t think they often go by that acronym, thankfully) is protesting at the Swedish claims, but it too axed funding to Zambia for exactly the same reasons last June.

So yes, Bill, I’m afraid there is corruption in health aid.

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