Foreign aid is a shambles in almost every way

NOT long ago Malawi was a donor darling. Being dirt poor and ravaged by AIDS, it was needy; with just 17m inhabitants, a dollop of aid might visibly improve it. Better still, it was more-or-less democratic and its leader, Joyce Banda, was welcome at Westminster and the White House. In 2012 Western countries showered $1.17 billion on it, and foreign aid accounted for 28% of gross national income.

The following year corrupt officials, businessmen and politicians pinched at least $30m from the Malawian treasury in just six months. A bureaucrat investigating the thefts was shot three times (he survived, somehow). Germany said it would help pay for an investigation; later, burglars raided the home of a German official and stole documents relating to the scandal. Malawi is no longer a donor darling. It now resembles a clingy lover, which would be dumped were it not so needy. It still gets a lot of foreign aid ($930m in 2014), but donors try to keep the cash out of the government’s hands.

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Remittances are three times greater than aid – how can they go even further?

This year the World Bank expects remittances to reach over $600bn; they will play a crucial role in fundings the SDGs

When people in developed countries complain about the amount of aid sent to developing countries, the retort is a return volley of cold, hard facts: “Remittances sent to all countries in 2012 (developing and high income) was $534bn, three times greater than aid budgets to the developing world. In 2016, the World Bank expects remittances to reach over $600bn, with over $440bn being sent to developing countries”.

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