Afghanistan — Amid development failures, some see reduced foreign aid as a boon to Afghanistan

As Afghanistan braces for reduced for­eign aid as part of the NATO draw­down over the next two years, some gov­ern­ment and aid offi­cials — cur­rent and for­mer — view an expect­ed drop in inter­na­tion­al sup­port as a bless­ing in dis­guise despite the like­ly neg­a­tive impact on the local econ­o­my. These offi­cials argue that low­er aid lev­els will force Afghanistan to become less aid depen­dent and lim­it oppor­tu­ni­ties for ram­pant cor­rup­tion. More impor­tant­ly, they say, for­eign aid that builds up the Afghan gov­ern­ment and tack­les long-term objec­tives like infra­struc­ture could cre­ate a path to tru­ly sus­tain­able devel­op­ment in a coun­try long plagued by devel­op­ment disappointments. 

Here you can find more infor­ma­tion about: 

Inter­views with these gov­ern­ment and aid offi­cials, as well as with ana­lysts and busi­ness­men work­ing in the coun­try, sug­gest the prospect for Afghan devel­op­ment is less tied to over­all aid fund­ing and more to the spe­cif­ic projects select­ed for sup­port and the way funds are chan­neled to those projects. 

“Poor donor coor­di­na­tion and flaws in most inter­na­tion­al devel­op­ment assis­tance mod­els are so pro­found in Afghanistan that I am not sure reduc­ing the lev­el of aid will cause great prob­lems because most aid has not caused great good,” said Jere­my Pam, who par­tic­i­pat­ed in a U.S. Cen­tral Com­mand high-lev­el review of US strat­e­gy in Afghanistan and recent­ly returned from an 18-month stint in the coun­try where he over­saw local gov­er­nance ini­tia­tives for the U.S. State Department. 

There is evi­dence that devel­op­ment in Afghanistan is not sim­ply a ques­tion of mon­ey. Under the belief that more is bet­ter, the U.S. dou­bled its assis­tance in 2010 from rough­ly $2.3 bil­lion to $4 bil­lion only to go back to $2.3 bil­lion in 2011 with­out either the increase or the reduc­tion hav­ing had any vis­i­ble impact accord­ing to knowl­edge­able sources. The sud­den and tem­po­rary increase may have high­light­ed the lim­its of Afghanistan’s abil­i­ty to absorb aid and, per­haps more impor­tant­ly, put a spot­light on the lim­i­ta­tions of a for­eign aid sys­tem designed large­ly to serve donors’ polit­i­cal goals. 

“The inter­na­tion­al donors have been a major prob­lem. We inter­na­tion­als want­ed big sym­bol­ic state­ments. We dou­bled the resources and didn’t care about absorp­tion capac­i­ty,” added Pam. 

All in all, the impact of fluc­tu­at­ing aid lev­els on the local econ­o­my may be less than expect­ed because, some say, most for­eign aid is not spent in Afghanistan and much of what is spent there, leaves the coun­try through imports, expa­tri­at­ed prof­its and out­ward remittances. 

Wadan Farahi, a for­mer spokesman of the Afghan women’s min­istry asserts donor spend­ing has focused on “quick fix­es” and that “mon­ey spent did not pro­duce long term ben­e­fits.” Hav­ing left gov­ern­ment ser­vice to become a con­sul­tant, Farahi argued that strength­en­ing the government’s capac­i­ty to han­dle large amounts of aid should be a pri­or­i­ty. He said a lit­mus test would be the government’s will­ing­ness to enforce the law and hold those account­able who were respon­si­ble for past finan­cial mis­man­age­ment. “Our econ­o­my can­not with­stand anoth­er Kab­ul Bank cri­sis. It would spark hyper­in­fla­tion,” Karahi said refer­ring to last year’s dis­cov­ery that $1 bil­lion had van­ished from the bank as a result of insid­er loans. He said the Tokyo Coop­er­a­tion Con­fer­ence on Afghanistan this com­ing July was expect­ed to help the gov­ern­ment stream­line its pro­cure­ment pro­ce­dures in a bid to roll back cor­rup­tion and focus on its devel­op­ment priorities. 

Iron­i­cal­ly, at least one well-placed offi­cial says Afghanistan’s gov­ern­ment, despite ram­pant cor­rup­tion and lim­it­ed capa­bil­i­ty, has so far achieved a sig­nif­i­cant­ly high­er rate of effec­tive aid deliv­ery than donor man­aged funds. “The mon­ey spent through the gov­ern­ment had an 80 per­cent effect. In con­trast, the mon­ey spent by donors had a 15 per cent local impact. There is not a lot of trans­paren­cy in donor com­mu­ni­ty spend­ing. It involves mul­ti­ple lay­ers of con­tract­ing and sub-con­tract­ing. If they go through the Afghan gov­ern­ment a lot of lay­ers are erad­i­cat­ed. It is much eas­i­er to have the Afghan gov­ern­ment as a sin­gle source to coor­di­nate and mon­i­tor,” said Ari­an Shar­i­fi, a part­ner in Afghan Finan­cial Ser­vices, a pri­vate­ly owned con­sul­tan­cy, and for­mer senior finance min­istry official. 

Shar­i­fi and oth­ers may be over­stat­ing the evi­dence to argue their case. Nonethe­less, donors implic­it­ly admit­ted that the Afghan gov­ern­ment was more effi­cient at aid deliv­ery with their deci­sion at the Kab­ul con­fer­ence in 2010 that 50 per­cent of all aid would be chan­neled through the gov­ern­ment (so called ‘on-bud­get’ spend­ing) by the sum­mer of 2012. Ana­lysts and Afghan offi­cials note that the country’s GDP rose in 2011, the year aid was cut back, although eco­nom­ic growth was also aid­ed by increased agri­cul­tur­al pro­duc­tion as a result of the end of a four-year drought in the country. 

“That is what we demon­strat­ed to the World Bank,” revealed Najib Man­alai, an advi­sor to Afghan Finance Min­is­ter Omar Zakhilw­al, argu­ing that for­eign aid is not the only socio-eco­nom­ic dri­ver in the war-torn country. 

Local offi­cials like Man­alai say that a decade of chan­nel­ing aid through donor agen­cies, non­govern­men­tal orga­ni­za­tions and con­trac­tors ori­ent­ed devel­op­ment strat­e­gy toward vest­ed inter­ests of donor coun­try insti­tu­tions and a rush to allo­cate bud­gets – all at the expense of con­sid­er­ing a project’s local results. 

“Bil­lions of dol­lars were spent, projects were devel­oped that were not doable. For exam­ple, a school but no teach­ers, desks or chairs, a clin­ic with no nurs­es and no doc­tor. Every aid orga­ni­za­tion had spe­cial­ists apply exam­ples from else­where, mon­ey spent was not pro­duc­ing long term ben­e­fits,” Farahi said. 

Mikhael Shahmah­mood, the Unit­ed States Insti­tute for Peace rep­re­sen­ta­tive in Kab­ul, not­ed the fail­ure to exploit Afghanistan’s eco­nom­ic strengths in agri­cul­ture. “We are sit­ting with French imports of chick­en and eggs; we import 200 mil­lion chick­ens a year from Brazil. We import grapes and yoghurt from Iran,” he said, sug­gest­ing those could eas­i­ly be pro­duced by Afghanistan itself. Sharafi recalled being pushed by the World Bank dur­ing his days with the finance min­istry to spend his $600,000 bud­get for capac­i­ty build­ing despite his lack of qual­i­fied candidates. 

“I orga­nized a few train­ing work­shops in Dubai and New Del­hi but could not find a sin­gle per­son with suf­fi­cient Eng­lish to par­tic­i­pate,” he said. 

A decade of inef­fec­tive aid cou­pled with the immi­nent draw­down of inter­na­tion­al forces has like­ly cost West­ern donors the abil­i­ty to sig­nif­i­cant­ly influ­ence the future course of Afghan devel­op­ment. That future will be deter­mined to a large extent by domes­tic and region­al play­ers, and involves the abil­i­ty of the Tal­iban, the Haqqani net­work and the Hek­mat­yar group to under­mine the gov­ern­ment of Pres­i­dent Hamid Karzai as well as the roles of Pak­istan, India, Iran, for­mer Sovi­et Cen­tral Asian republics, Rus­sia and China. 

Com­pli­cat­ing plan­ning for the tran­si­tion is lack of clar­i­ty around what funds donors have poured into Afghanistan over the past decade and how those funds were used. “No one actor – inter­na­tion­al or Afghan – knows how much mon­ey over­all is being spent and where it goes. How do you plan a tran­si­tion under those cir­cum­stances?” Pam, the for­mer U.S. gov­ern­ment advi­sor, asked. Crit­ics argue that nei­ther the Unit­ed Nations nor the U.S. Depart­ment of State, U.S. Agency for Inter­na­tion­al Devel­op­ment, oth­er donor nations, the World Bank or the Afghan gov­ern­ment has ever pub­lished a trans­par­ent assess­ment of the flow of aid to Afghanistan, its impact of the civ­il and secu­ri­ty aid pro­grams or an assess­ment of how aid has impact­ed the Afghan econ­o­my. Nei­ther has any of these orga­ni­za­tions devel­oped cred­i­ble mea­sures for the effec­tive­ness of aid, accord­ing to a recent­ly pub­lished study of aid to Afghanistan by ana­lyst Antho­ny H. Cordes­man of the Cen­ter for Strate­gic and Inter­na­tion­al Stud­ies as well as a report late last year by the U.S. Sen­ate For­eign Rela­tions Com­mit­tee. In con­trast to Iraq, the U.S. Spe­cial Inspec­tor Gen­er­al for Afghanistan has no cri­te­ria to val­i­date plans and require­ments for civ­il and secu­ri­ty aid efforts in Afghanistan that go beyond the tra­di­tion­al audits which sim­ply doc­u­ment past failures. 

As a result, donors may find it dif­fi­cult to assess the required finan­cial sup­port to ensure the troop draw­down and expect­ed aid cuts do not dri­ve the coun­try into reces­sion. Those even­tu­al­i­ties would reduce demand for Afghan goods and ser­vices as well as pub­lic sec­tor invest­ment. The eco­nom­ic fall­out is like­ly to occur amid an uncer­tain post-draw­down secu­ri­ty vac­u­um and a dete­ri­o­rat­ing human­i­tar­i­an sit­u­a­tion. With­out a base­line to work from, it will be chal­leng­ing to ensure that the Afghan gov­ern­ment can spend enough to off­set the reduced inter­na­tion­al fund­ing flows. Last Novem­ber, a World Bank study of Afghanistan’s post-2014 fund­ing and aid needs warned that a cut-off of aid could spark a fis­cal melt­down and result­ing chaos. Under such cir­cum­stances, the study said, Afghanistan could wit­ness the erup­tion of a civ­il war with rival war­lords and a mil­i­tant Islamist fac­tion bat­tling one anoth­er much like in Somalia. 

Cordesman’s first work­ing draft report, “Afghanistan: The Uncer­tain Eco­nom­ics of Tran­si­tion,” con­clud­ed that if “the lev­el of future U.S. aid and oth­er donor mil­i­tary and civ­il aid efforts is to have any chance of cre­at­ing a rea­son­able lev­el of post-2014 secu­ri­ty and sta­bil­i­ty” plan­ners would have to “approach eco­nom­ics with a lev­el of integri­ty that has been sad­ly lack­ing to date.” That would involve being “hon­est when the data and sources are in con­flict, or so con­flict­ing and poor­ly based that they can­not cred­i­bly be used for plan­ning – a state of affairs that is more often than not the case.” 

Over­all, some local offi­cials and devel­op­ment experts are call­ing for delink­ing aid from mil­i­tary objec­tives and mak­ing jobs, human secu­ri­ty, jus­tice and gov­er­nance a pri­or­i­ty. Those inter­viewed for this arti­cle all argued for a shift away from quick impact projects dri­ven by donors’ need to demon­strate progress against mil­i­tary and polit­i­cal objec­tives to less flashy, long-term devel­op­ment and infra­struc­ture initiatives. 

“Afghanistan has been doing quick impact projects for the last 30 years. The effect is obvi­ous, they are not the solu­tion,” said Shahmahmood. 

Con­tra­dict­ing this view, a major­i­ty staff report of the U.S. Sen­ate For­eign Rela­tions Com­mit­tee rec­om­mend­ed last sum­mer that “our aid should be vis­i­ble among Afghans, and we should have a robust com­mu­ni­ca­tion strat­e­gy in place so that Afghans know what U.S. aid in Afghanistan is accom­plish­ing.” The report defined a sus­tain­able U.S. strat­e­gy as one that would “pur­sue a lim­it­ed num­ber of high-impact pro­grams that do not require com­plex pro­cure­ment or infrastructure.” 

If West­ern donors are to change their strat­e­gy, they are like­ly to increas­ing­ly rely on Islam­ic orga­ni­za­tions and region­al insti­tu­tions such as the Aga Khan Foun­da­tion, the Orga­ni­za­tion of the Islam­ic Con­fer­ence and the Asian Devel­op­ment Bank, accord­ing to Brad L. Brasseur of the Brus­sels-based East­West Insti­tute. The Aga Khan Devel­op­ment Net­work has already con­tributed around $700 mil­lion to large-scale rur­al devel­op­ment, health, edu­ca­tion and micro-finance in Afghanistan. More­over, Islam­ic and region­al agen­cies could help devel­op and finance fea­si­ble annu­al provin­cial devel­op­ment plans involv­ing trans­par­ent trans­fers of devel­op­ment funds in line with gov­ern­ment capac­i­ty to imple­ment projects. This larg­er role for the Afghan gov­ern­ment and region­al play­ers, some say, may be the unex­pect­ed devel­op­ment ben­e­fit of the com­ing reduc­tion in for­eign aid. 

About The Author:
James M. Dorsey is a senior fel­low at the S. Rajarat­nam School of Inter­na­tion­al Stud­ies at Nanyang Tech­no­log­i­cal Uni­ver­si­ty in Sin­ga­pore and the author of the blog, The Tur­bu­lent World of Mid­dle East Soc­cer.

Team GlobDef

Seit 2001 ist im Internet unterwegs, um mit eigenen Analysen, interessanten Kooperationen und umfassenden Informationen für einen spannenden Überblick der Weltlage zu sorgen. war dabei die erste deutschsprachige Internetseite, die mit dem Schwerpunkt Sicherheitspolitik außerhalb von Hochschulen oder Instituten aufgetreten ist.

Alle Beiträge ansehen von Team GlobDef →