Afghanistan: Where does all the aid go?

I. Failure of development assistance

 

As newly elected Pakistan government begins to re-think its current anti-Taliban policy, a new report by the Agency Coordinating Body for Afghan Relief (ACBAR) - a 95 member coalition of private development agencies - has underlined the failure of development assistance in Afghanistan. Successful development assistance is not only important in itself but also vital to a wider strategy to tackle the Taliban. Failure in development assistance will only buttress an already failing security response.

 

II. Where aid to Afghanistan fails

 

Seven years after the fall of the Taliban, Afghanistan has little to show in the way of development. Afghanistan remains wholly dependant on external assistance. About 90% of public spending comes from foreign aid.  This too, is failing.

 

In its new report of 25 March 2008, “Falling Short: Aid Effectiveness in Afghanistan, ACBAR stated that the international aid has been “insufficient and in many cases wasteful or ineffective”. There is an aid shortfall of $10 billion as donors have delivered only $15 billion of a total of $25 billion pledged to rebuild Afghanistan.

 

A staggering 40% of total $15 billion aid spent so far – that’s 6 billion dollars - returned to the donor countries in corporate profits and consultants’ salaries.

 

While an Afghan government official earned only $1,000 a year, a full time expatriate consultant working in private consulting companies was paid between $250,000 and $500,000 a year. In addition, foreign aid came with strings: over half of all aid to Afghanistan is “tied”, meaning donors often require procurement of services or resources from their own countries.

 

Over two-thirds of all aid bypasses the Afghan government. Donors have failed to coordinate among themselves. They have failed to coordinate with the government. They have also failed even to inform: the Afghan government is unaware on how one-third of all aid since 2001 (about $5 billion) has been spent.

 

There is widespread corruption and absolute lack of transparency in the disbursement of funds. The USAID allocates almost half of its funds to five large US contractors in the country. Contractors have up to five layers of sub-contractors, each taking a cut of between 10% and 20% profit.

 

The results are predictable: a short stretch of road between Kabul and the airport contracted by USAID to the Louis Berger Group cost $2.4 million per km, which is at least four times the average cost of road construction in Afghanistan, which, depending on the terrain and other factors, is between $100,000 and $600,000 per kilometre. 

 

US policy is centred around security. The US, which is Afghanistan’s largest donor, has disbursed only half of its $10.4 billion commitment for 2002-2008 but has spent $127 billion on the war in Afghanistan since 2001. The US military currently spends nearly $100 million a day in Afghanistan; it too spends badly. The American military, has relied since early last year on a fledgling company (led by a 22-year-old man whose vice president was a licensed masseur) as the main supplier of munitions to Afghanistan’s army and police forces. Since then, the company has provided ammunition that is more than 40 years old and in decomposing packaging, according to an examination of the munitions by the New York Times.

 

International development aid provided by all donors since 2001 totals $7 million per day. In the first two years following the international intervention in 2001 Afghanistan received $57 per capita while Bosnia and East Timor received $679 and $233 per capita respectively.

 

The West is not alone responsible for the failure to deliver promised aid. India has so far disbursed only a third of its aid commitment for 2002-2008. India has disbursed only 22% of its $942.03 million aid pledge for 2002-2011 while China has fulfilled only 28% of its aid pledge of $145.5 million for the same period.

 

III. Expanding war in Afghanistan

 

According to an estimate of the Associated Press, in 2007 at least 110 U.S. troops were killed in Afghanistan, which is the highest number of fatalities since the US led intervention began. Britain lost 41 soldiers, Canada lost 30 while other countries lost a total of 40 in 2007. [1]

 

The United Nations stated that violence increased sharply in Afghanistan in 2007 resulting in the deaths of more than 8,000 persons, at least 1,500 of them civilians. In a report to the Security Council, the UN Secretary General, Ban Ki-moon stated that the number of violent incidents rose from an average of 425 a month in 2006 to 566 each month in 2007. [2]

 

While Nato leaders have been calling for member countries to commit more troops to Afghanistan, Education Minister of Afghanistan, Mohammad Hanif Atmar has demanded the “Afghanization” of security, that is local people should take over the fight against the Taleban. He also demanded that the money being spent on the foreign troops would be better spent in training and providing resources to local people. [3]

 

Ahead of the summit in Romania, on 2 April 2008 US President George W Bush urged the NATO allies to send more troops to Afghanistan. More troops are needed. But this announcement should have been accompanied by a commitment to recognize and address the failure of development assistance. Counter insurgency is the sum of its parts. Security is only one part. A failure to address dysfunctional development assistance will be very costly.