Financial Times

Aid - ensure transparency
The prospect of such generous dollops of aid being so freely disbursed - a $100 million here, $300 million there - in the relief and rebuilding effort must be mouthwatering for those criminally inclined who are in a position to somehow place themselves between donors and recipients.

We are all mindful of the manner in which aid was misused on a previous occasion - where a former ruling party MP was allegedly caught with roofing sheets meant for refugees displaced by floods. In the latest flood of relief allegations have already begun to fly about the lack of suitability of certain individuals to handle aid.

That a member of parliament can stoop so low as to misappropriate or steal something as basic as roofing sheets and be so insensitive and callous as to deprive refugees of a roof over their heads shows the extent of corruption prevailing in this country. It is all the more repugnant because the alleged culprit was himself a lawmaker.

Donor countries and agencies have offered not only aid - grants and low cost loans - but also debt relief, in some cases writing off debt altogether, although mostly it is a delay in repayments. The least we can do to reciprocate such generosity is to ensure that the money is used properly and usefully, especially since it is the people in key donor countries who have been the most generous. It is partly their initial outpouring of aid and sympathy that put their governments to shame and led to increased official pledges.

An international audit firm has been appointed to monitor aid flows and see how they are used. The World Bank itself has warned of corruption with World Bank President James D. Wolfensohn calling for transparency and accountability in the use of the millions of dollars pledged as aid for rebuilding the damage wrought by the tsunami. The bank has said the international community and governments in the tsunami-affected countries will discuss ways to ensure the funds raised for reconstruction can be easily distinguished from other development finance and tracked from donor to community, with the help of the Internet so that it would be available to everybody.

Much of the aid will be handled by Non-Governmental Organisations and there have been questions about the transparency or lack of it in some of these outfits. NGOs are frequent critics of government but they themselves need to ensure they are above board. Furthermore, one of the criticisms against NGOs is that much of the aid they use is spent on themselves - on salaries, perks and other administrative expenses - and that what actually gets spent on those who need it most is much less than the publicised amounts.

Many of the rebuilding contracts will be open for private sector investors. Therefore it is also important not to leave any room for mischief in the procurement procedures which are most likely to be simplified and accelerated owing to the urgency of the requirement. While such simplification is essential to speed up reconstruction work, it is important that any short cuts do not become opportunities for aid to be misused.

There have been many reports of corruption or favouritism in the award of contracts to American construction firms in the rebuilding effort in Iraq. We must ensure our own rebuilding effort, in which lucrative contracts would be on offer, are free of such allegations and ensure a transparent bidding process. Already there are reports that some of the aid is coming with commercial strings attached. US aid, for instance, is said to be some of the most politically tied, with laws requiring that the taxpayer money be used by recipients to buy only US products.

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