The US system for financing aid is "dysfunctional", the head of the US Agency for International Development (USAID) has told the Financial Times. In a recent interview in London, Andrew Natsios, the USAID administrator, said the way Congress allocated funding to discrete initiatives made it very difficult to integrate aid in a coherent development effort. Mr Natsios also told the FT that the US would use the $50m (euro42m, £29m) pledged to help Pakistan recover from the recent earthquake for long-term reconstruction, rather than short-term relief, since there were already more emergency supplies than could be transported to the worst-hit areas. He said the funds would be allocated on the basis of need, not political calculation. But he added that it was "naive" for non-governmental organisations (NGOs) and United Nations agencies to think that aid did not have political consequences. Mr Natsios said the US had noted a dramatic turnround in support for the US at the expense of al-Qaeda in Indonesia after its prominent role in the post-tsunami recovery effort. He said the US military -- which has unique logistical capacity to intervene rapidly in crises -- was now including disaster relief co-ordination in its training programmes. The USAID administrator acknowledged that the US aid funding system -- widely criticised for channelling money to single-issue projects rather than backing general development -- was flawed. "It is not optimal. I think it is a dysfunctional funding structure," he said. An earlier report by Alison Maitland also from London adds: There is a severe risk that money freed by debt relief for some of the world's poorest countries will be lost to corruption, Transparency International, the anticorruption watchdog, has recently warned. Following the announcement of its annual index of corruption around the world, TI said all 19 countries set to gain relief on debts owed to the World Bank, the International Monetary Fund (IMF) and the African Development Bank had serious to severe levels of corruption. Chandrashekhar Krishnan, executive director of TI in the UK, contrasted overseas development assistance (ODA) with the flight of capital from Africa each year that was deposited in financial institutions in Switzerland, the US and UK. ODA commitments by members of the Organisation for Economic Co-operation and Development (OECD) were due to reach nearly $130bn (euro108bn, £72bn) in 2010, he said. By contrast, more than $150bn left Africa in capital flight each year. Iceland, Finland and New Zealand emerged as the cleanest countries in this year's index, which measures business people's and analysts' perceptions of corruption among public officials and politicians. Chad had the worst score among the record 159 countries included this year, followed by Bangladesh, Turkmenistan, Burma and Haiti, which are among the poorest countries in the world. Perceptions of corruption in Bulgaria, Colombia and Estonia have decreased over the past decade, while they have increased in Canada and Ireland. Although ranked as the sixth most corrupt country in the index, Nigeria's score improved. (Under syndication arrangement with FE)
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