The TImes – We can no longer afford to fund the corrupt<br/> The UN rails against the banks, but the aid industry has been just as reckless in its lending and spending, by Camilla Cavendish

Biting the hand that feeds the world doesn’t seem like a great strategy. But at the United Nations, it’s normal. Last year, in a masterstroke, the UN General Assembly put Zimbabwe in charge of Sustainable Development. Yesterday, the world leaders who gathered at the UN in New York found a new excuse to rage against America, the world’s biggest aid donor, for having the cheek to try to save the West from recession.

“Using the bailouts of the international banking system,” the Chilean President said, “the scourge of hunger on the planet could have easily been eliminated.” She moved straight on to complain that “financial instability is threatening to generate a worldwide recession in which, as always, those most affected will be the world’s poorest”. Yup. The world is a complicated place. Sadly, you can’t keep economics and poverty in separate compartments.

Aid officials understandably worry that wealthy nations are falling behind in their promises. But they need to remember the terms of the deal that was done at the G8 three years ago. A doubling of aid to Africa was supposed to be contingent on clean government, and respect for democracy. That deal has not always been honoured. Last November, to take one example, Britain announced a new partnership with Uganda worth “at least” £700 million. This is the country whose President changed the country’s Constitution, so that he could stand for a third term. Who jailed the opposition leader. Who has been bankrolled by the West for so long that half of his Government’s budget is now foreign aid. It beggars belief that we are still pumping money into the Swiss bank accounts of his cronies. But we are, because we fear it will hurt the poor more if we withdraw. Or is it because it will hurt the aid industry?

The past few years have been boom years for aid, just as they have been for banking. The aid industry has not been entirely free of reckless lending, nor even from moral hazard. When we wrote off Nigeria’s debt in 2005, did we really want that country to think of debt as a free lunch? Did we know that it was about to become the world’s sixth-biggest oil producer? If so, how could anyone have thought that a $1 billion write-off was value for money? Or was value for money not an issue?

Oh nice. I forgot about that.