In June the Phnom Penh Post shone a small light on a dark corner of the international
aid community. The Asian Development Bank-funded "Tonle Sap Environmental
Management Project" had budgeted $8.3 million (or 46 percent) for consultants
out of a total budget of $20.5 million. International consultants were scheduled
to receive $12,000 per month and an extra $80 per day for expenses. Worse, these
sums were part of an ADB loan, meaning that someday Cambodians would have to
pay all of this back.
The Cambodian government questioned these sums and held up the signing of the contract. Director of Fisheries Nao Thouk said, "I think this is too much because we have to pay the loan back to the ADB. They should keep the salaries as low as possible."
A hardly-noticed study in 2000 by the Cambodia Development Resource Institute (Technical Assistance and Capacity Development in an Aid-dependent Economy: the Experience of Cambodia, Working Paper 15) makes clear the systemic nature and jaw-dropping costs of overused and overpaid TA.
According to CDRI, "From around 19 percent of the total in 1992, the share of TA rose to 46 percent in 1996 and 57 percent in 1998, mainly at the expense of food aid and assistance for budgetary, balance-of-payments, emergency and relief purposes" (emphasis added). Instead of investing in long-term capital, such as roads, sewage plants or schools, or overseas training for Cambodians, or feeding hungry Cambodians, donors are using aid to pay salaries to foreigners.
The sums are staggering. In 1998, $230.5 million of a total of $403.9 million in external assistance was spent on technical assistance. Between 1992-98, a total of $1.1563 billion was spent on TA. From 1995-98 the figure was over $200 million each year. In 1997, technical assistance accounted for 74 percent of the entire expenditure of the Cambodian government.
Japan's practice of tying foreign aid to the sale of Toyotas is infamous. They are not alone. British-based Reality of Aid reported in 2000 that for the United States, "71.6% of its bilateral aid commitments were tied to the purchase of goods and services from the US".
"I have no problem paying a reasonable salary to a foreigner if a job needs to be done," says Paul Matthews, the former head of UNDP in Cambodia. "The standard should be that the job is absolutely necessary and the person is capable."
"But," Matthews goes on, "too often TA becomes an addiction. Even if money is well spent there is a problem of sustainability with TA. Most TA is a waste of money in the absence of certain conditions, such as good governance, a functioning judiciary, the rule of law, etc. The Cambodian government hasn't made the reforms necessary to use TA well."
According to Matthews, "There is a triangle: donors, recipients and the development industry. This is a powerful lobby and there is little public scrutiny in donor countries of this."
In the mid-1990s the big joke around Phnom Penh was the salary of Matthew Varghese, the UNDP's "Poverty Alleviation Expert." He was making $10,000 per month - around 50 times the average Cambodian's annual income, or 600 times their monthly wages. We all laughed about just whose poverty he was alleviating.
But it wasn't funny. In a country with such appallingly high rates of infant and child mortality and low rates of literacy and clean drinking water, every aid dollar is sacred.
It is time to bring these artificially high salaries down to earth. Does anyone need to make more than $5,000 per month in Cambodia? Can a case be made that one cannot live on that amount, and even save a significant sum?
Until donors address this problem, ethical aid workers will face the quandary of how to respond when offered a job with a ridiculously high salary.
There are a number of moral options. One is to say no. Another is to negotiate down the salary. Perhaps most creative is to accept the high salary, and give the excess away. Form a coalition with other overpaid expats and build a school, dig some wells, donate to an orphanage. Such donations have the added allure of cutting out the large overhead taken by official donors.
Phnom Penh Post, Issue 11/18, August 30 - September 12, 2002
© Michael Hayes, 2002. All rights revert to authors and artists on publication.