Will explains why with their high salaries and flashy cars, some NGOs are jeopardising a delicate economy.

I have just come back from a few meetings in Lilongwe, the capital of Malawi. Blantyre, Malawi's financial capital, is an exciting and prosperous city that breathes business. Lilongwe is a dull city that's overfed on aid. My internet connection's far too slow to ascertain exactly how much aid flows into the tree lined boulevards of Lilongwe - but it's a hell of a lot.

I'm not an aid detractor, as my last blog affirms, but walking the streets of Lilongwe, I have the overwhelming urge to send a strongly-worded letter to Bono. Everywhere you look, Western NGO workers drive around in the latest top-of-the-range four-by-four demi-tanks, with their organisation or charity's name emblazoned across the sides, without a hint of embarrassment at the irony.

It's not just the cars: NGO workers are paid a lot. For some reason, international aid organisations have got it into their heads that if they don’t pay Western wages to foreign workers, people won’t come. Now, I'm not saying Western charity workers in Malawi should be paid K5,000 (£20) a month and made to live in houses with no electricity, running water or toilet; growing their own food and selling whatever surplus they have at the local market just to be able to afford to eat - but do charity workers really need to be paid Western salaries in Malawi, where GDP is about 1/600th of that of the UK. After all - they're not bankers.

The result is an extravagant aristocracy of aid workers. Hoards of Western professionals live it up in the expensive restaurants and bars in the city, rubbing shoulders with diplomats and driving to the few nightclubs in their  brand new Toyotas.

Aside from the extravagance, paying people tens of thousands of pounds a year is affecting the whole economy of Lilongwe: for one, house rental values are soaring. I spoke with a few Western NGO workers who said their organisation was spending $2,000 a month for their houses. Later, I asked a local businessman how much he would expect to pay for a similar-sized house in the same part of the city - and he told me $600 a month, maximum. He was astonished when I told him what they paid.

Office rent is also going up sharply: space in the most expensive office block in town now sells at K2,000 per square metre compared with K1,500 in Blantyre. When I went to that building, many of the offices are rented out by NGOs.

I think the biggest problem this trend is causing is in the labour market. Obviously, it would be entirely inappropriate to pay Western staff more than locals, so NGOs have to pay local staff the same wages (although a friend of mine who went for an interview at an international donor-funded private school was asked if he minded being paid less than the Western staff. He said yes. He didn’t get the job).

Consequentially, there's a brain drain away from the private sector. A friend of mine is setting up a big-budget processing plant and was looking to recruit the top talent. He ended up having to pay over $120,000 a year to tempt a COO away from a charity: an astonishing amount over here.  Through their irresponsible attitude to money, NGOs and charities are starving the economy they're supposed to be developing of the talent that can develop it and you can't help but wonder how Lilongwe is going to wean itself off this aid addiction.