IN a recent interview with a leading financial daily, Finance Minister Shaukat Tarin raised an important issue that is bound to be on the minds of fiscal managers throughout the developing world. Mr Tarin expressed a fear that the aid that we will receive (in this particular instance, he was talking about the US) might lose a substantial chunk due to administrative and intermediation costs. These fears are not at all unfounded. Anyone who has worked in or with an aid agency will have horror tales of waste and opulence to tell. Talking about the $ 7.5 billion that US President Barack Obama has planned to raise to assist Pakistan over the next five years, Mr Tarin was blunt in his estimation that nearly a staggering half of such aid seeps away in intermediation expenses. Organisations like USAID, like others, form a large bureaucratic set-up which employ foreign and local experts with ridiculously high salaries, hugely inflating the costs of these organisations to do business. This is true not just for USAID, but also for the aid agencies of other countries as well. These costs are the ones that are explicitly stated; the huge amounts lost to graft and corruption are not accounted for as yet. The audit of local NGOs that receive funding from foreign sources is even more sloppy and filled with loopholes. The Finance Minister was right when he demanded that the aid be distributed through the government's own agencies. This suggestion might be lampooned in the ever-ready local and foreign press as an attempt for the government to make a quick buck, but it is believed that wasteful expenditure will be reduced significantly if it is followed up on. There is no denying that it is the US taxpayers' money, but that only means that the said taxpayers would be interested in it being spent better, not necessarily through US aid agencies.