[R-G] The Tragedy of Afghan Aid

[Anthony Fenton]

  The Tragedy of Afghan Aid  	
http://www.spinwatch.org/content/view/4847/8/
Andy Rowell, 23 April 2008

It was a photo opportunity that was meant to signal a new dawn for  
Afghanistan. In January 2006, then British Prime Minister Tony Blair  
hosted a conference for some 60 international delegates in London on  
the future of the country.

Standing side by side with Tony Blair for the conference photo was US  
Secretary of State Condoleezza Rice, then UN head, Kofi Annan and  
Afghan President, Hamid Karzai. According to the US State Department,  
the conference “represented an historic milestone for the Afghan  
people and the international community” in which “Afghanistan sets its  
reconstruction and development priorities.”

The centerpiece of the conference was the endorsement of the  
“Afghanistan Compact”, which set out an ambitious programme for Afghan  
development, committing to specific and achievable goals in security,  
governance, economic and social development. The document also  
included an entire annex on “improving the effectiveness of aid”. At  
the conference, the international community pledged some $10 billion  
dollars in aid.  For the photo, Karzai held a copy of the Compact  
proudly in his arms.

Now two years on a new report has shown that the Compact has been a  
complete failure and billions of aid money to the county has either  
been wasted or not even delivered. The report is published by the  
Agency Coordinating Body for Afghan Relief (ACBAR), which is a leading  
alliance of 94 national and international non-governmental  
organizations working in Afghanistan.

Its author Matt Waldman argues: “The reconstruction of Afghanistan  
requires a sustained and substantial commitment of aid - but donors  
have failed to meet their aid pledges to Afghanistan. Too much aid  
from rich countries is wasted, ineffective or uncoordinated.”

It seems the last two years of effort has been wasted. Even before the  
London conference in 2006, the politicians knew they had a problem  
with aid money. Despite the billions pouring into Afghanistan, there  
were already reports of wasted money, corruption and incompetence.  
Just two months before the London meeting, the Washington Post had run  
a high profile piece entitled: “A Rebuilding Plan Full of Cracks”.

The paper noted that in September 2002, the United States launched  
what would become an aggressive effort to build or refurbish as many  
as 1,000 schools and clinics by the end of 2004. However,  
Congressional figures showed that they managed to finish and hand back  
to the Afghan government only 40 schools by late 2005.

This story of failure was not unique. At the time, the World Bank  
director in Afghanistan Jean Mazurell estimated that between 35 to 40  
percent of the aid was “badly spent”. “In Afghanistan the wastage of  
aid is sky-high: there is real looting going on, mainly by private  
enterprises. It is a scandal,” said Mazurell. “In 30 years of my  
career, I have never seen anything like it.”

Other stories of wasted money began to emerge. A 45 million contract  
with the UN’s Food and Agriculture Organisation to supply badly needed  
food for the country, included the proviso that four million dollars  
went to financing its headquarters in Rome.

The tragedy is that aid has often been ineffectual and wasted. Often  
it does not even leave the country it is being offered from, as it  
goes to the country’s own consultants. The fraud of aid never actually  
leaving rich countries has been known about for decades.

In the late eighties the British All-Party Parliamentary Foreign  
Affairs Committee had noted bluntly: “In practice, the purpose of  
bilateral aid programmes in the UK, as in most countries, has rarely  
been viewed as the purely selfless promotion of other peoples’  
welfare. It has always been understood that such programmes should be  
carried out with British commercial and industrial interests and  
political interests in mind.”

As Ben Jackson wrote in his book “Poverty and the Planet” published in  
1990, “Aid is commonly thought of as handing over money to Third World  
governments for development. In fact, aid largely consists of funding  
from Western governments for services, machines, technical experts and  
consultants to be supplied by companies in rich countries, frequently  
their own.” The bottom line was that “most aid money is actually spent  
in the rich world.”  Of the $20 billion the World Bank handed out in  
1988, $15 billion went to its own contractors or consultants.

There are many more cases like this. Another book written around that  
time, called “Lords of Poverty”, examined the “freewheeling  
lifestyles, power, prestige and corruption of the multibillion dollar  
aid business.”  It found, for example, that in the African country of  
Tanzania, “over 80 per cent of all Canadian development assistance was  
tied to the procurement of Canadian goods and services.”

Another problem that has been known about for years is that rich  
countries often promise aid, but never actually deliver it, or if they  
do, what they eventually give is woefully short of what they promised.

The record of failed promises is long. After Hurricane Mitch hit  
Central America in 1998 only a third of pledged aid was delivered;  
after the floods in Mozambique in 2000 and the earthquake in Bam in  
Iran just over half was delivered.  After the Tsunami hit Asia in  
December 2004, Max Lawson, from the development charity Oxfam noted  
that: “History has shown us pledge-making is consistently undervalued  
by governments delivering about half of what they actually promised.”

Nearly two years after the Tsunami, Oxfam’s worries remain true.  
According to the UN, America promised Indonesia over $400m, but  
delivered $70m. For Sri Lanka, Spain promised $60m, but delivered less  
than $1m. France pledged $79m and came up with just over $1m. The  
Chinese promised $301m and delivered just $1m. In the Maldives, Kuwait  
promised $10m but actually delivered nothing.

So has Afghanistan been any different? The tragic answer is no.  
ACBAR’s report is truly shocking.  The international community has  
simply repeated well known mistakes. Firstly, despite the pledge made  
in the “Compact” the reasons for giving the money have been dictated  
by the big donors rather than responding to Afghan needs.

According to ACBAR, the donation of aid has “been heavily influenced  
by the political and military objectives of donors, especially the  
imperative to win so called ‘hearts and minds’.” Given to reflect  
expectations in donor countries, it is not what Afghan communities  
want and need. A significant proportion of aid to Afghanistan is being  
used to achieve military or political objectives, rather than help  
Afghans on the ground.

For example, over 70% of the Afghan population rely either directly or  
indirectly on agriculture for their livelihoods. However agriculture  
has received only $400-500 million since 2001, a tiny fraction of the  
multi-billion international aid budget to Afghanistan.
Secondly, there is a huge disparity between what America spends on war  
and what the international community spends on aid. The US military  
currently spends nearly $36 billion a year in the country, some $100  
million a day; yet the average volume of aid spending by all donors  
since 2001 is just $7 million per day. Whilst the military budget is  
vast, 2.5 million Afghans face severe food insecurity, and one in five  
children still dies before five. Life expectancy is woefully low at 45  
years.

Thirdly, over half of all aid to Afghanistan is tied, by which donors  
often require procurement of services or resources from their own  
countries. Rather than go to help Afghanistan, the money just lines  
the pockets of Western contractors and companies.  So of the aid  
actually spent, a staggering 40% has returned to donor countries in  
corporate profits and consultant salaries.

The report notes: “Vast sums of aid are lost in corporate profits of  
contractors and sub-contractors, which can be as high as 50% on a  
single contract ...  A vast amount of aid is absorbed by high  
salaries, with generous allowances, and other costs of expatriates  
working for consulting firms and contractors – each of whom costs  
$250,000–$500,000 a year.” In contrast, an Afghan civil servant is  
paid less than $1000 per year.

Often the contractors spend vast amounts of money on something that  
could be done much cheaper: For example, a road between the centre of  
Kabul and the international airport cost the US over $2.3 million per  
kilometer, at least four times the average cost of building a road in  
Afghanistan.

Finally, there is the inevitable short-fall of some $10 billion –  
equivalent to thirty times the annual national education budget. Just  
$15 billion in aid promised since 2001 has so far been spent. The list  
of culprits is long. The European Union has distributed less than two- 
thirds of its commitments for 2002-2008.  The US and World Bank has  
distributed only half of their’s and the Asian Development Bank and  
India have disbursed only a third of what they promised.

Why do we just make the same mistakes time and again. As history  
repeats itself, the US and Britain wonder why they are losing the war…