Go with the government(Afginastan)
´"Resources are not well-enough spent. We all see it and we should address it," Kai Eide, the UN Secretary-General's new Special Representative to Afghanistan, noted at a press conference in Kabul on 9 April. His remark reinforced what high-level officials had pointed out last year, and again underlined the deep rot within Afghanistan. While the initial focus following the ousting of the Taliban had been on the quantity of aid being received for reconstruction, development experts are now increasingly challenging its quality as well. This questioning has followed the mounting evidence of growing income disparities, impoverishment and non-inclusive growth strategies.
The concern is certainly not misplaced. Afghanistan has extremely low revenue generation, accounting for just 28 percent of government spending. An estimated 90 percent of all public expenditure in Afghanistan comes from international assistance, with over two-thirds delivered as 'external assistance' – ie, not channelled through the government. This makes it is crucial for observers to follow donor priorities, delivery mechanisms and monitoring. Yet, from the very beginning, donor spending (USD 15 billion delivered since 2001) has lacked acceptable levels of transparency, cohesion or coordination within the donor community itself, as well as adequate engagement with Afghan priorities.
Of course, previous criticism of spending levels continues to hold true. For all the talk of Western governments' commitment to Afghanistan's 'stability', there seems to be a different value placed on Afghanistan when it comes right down to it. In Bosnia and East Timor, their first two post-conflict years saw per-capita contributions of USD 679 and USD 233, respectively. Afghanistan, on the other hand, which had less undamaged infrastructure left in 2001 than either of those two countries, has received only USD 57 per capita. This has led critics to suggest that the international community has been trying to do "peace on the cheap".
The cost of this relative miserliness has showed itself in the administration of the little aid that was sanctioned. The 'result oriented' approach – focusing on numbers over holistic development – led to quick, cheap projects being executed with an eye on the donor requirements but without accountability to the recipients. Donors were happy as long as they could rattle off targets – so many schools, children, clinics, media outlets. The worry now has become that the quality of these 'results' remain a secondary concern.
While there has been some progress in rehabilitating infrastructure, a considerable amount of this has been shoddy, and well below standards that would be acceptable in the donor countries themselves. However, as 'beneficent givers', donors have kept themselves out of mechanisms that would make them accountable to the end users – the people of Afghanistan. Much of the donor community's monies come in the form of either 'tied' or 'preferenced' aid. The former refers to rules making it mandatory for a part of the materials bought to be sourced from the donor country; it is estimated that over half of the total aid to Afghanistan is 'tied' in this way, which makes for enormous waste and inefficiency.
'Preferenced' aid, on the other hand, enables the donor to specify where and in which sector the aid will be spent. This has allowed, for example, DFID, the British aid agency, to spend as much as one-fifth of its aid in the single province of Helmund, where British (wouldn't you guess?) troops are stationed. The 'follow the troops' approach of major donor agencies has meant that some of the southern states in the country have received a disproportionate share of the aid, even while there are critical questions about the ability of these areas, in the throes of conflict, to absorb development aid.
Not only do donors pick and choose their preferred sectors to fund, resulting in lopsided development and duplication of projects, but funding is also largely driven by annual budgets in the home country. The resultant uncertainty forces project implementers to choose fast-yielding initiatives, with life cycles of only a few months; this despite the fact that the professed interest of the international community is long-term investment and sustainability. Given the short lifespan of projects and the need for donor reporting in order to elicit the next round of funding, donors hire extremely well-paid international consultants, at an individual cost up to USD 500,000 a year. These high salaries, along with corporate profits, take approximately 40 percent of aid back to the donor countries.
Further dependency
Greater accountability, multi-year planning and capacity-building are each best achieved through the Kabul government. But donors are reluctant to commit greater resources to the government on the grounds that it lacks 'capacity'. Yet as Praful Patel, South Asia Regional Vice-President of the World Bank has said, "No wonder we ask ourselves why there is so little capacity built," referring to the two-thirds of nearly USD 13 billion that was not transmitted through the Afghan government in 2007.
This inevitably feeds the vicious cycle of continuing donor dependency and ineffective aid delivery. The result has been that the 'growth' experienced in Afghanistan, while enriching the Kabul elite and a small section of the middle and poorer classes, is ultimately resulting in further impoverishment of large sections of the people. In officially generated data relating to human-development indices, specifically in relation to access to nutrition, food, health care, education and employment, it is evident that Afghans continue to slide deeper into poverty.
There is little evidence that the paradigm shift needed to substantially change the nature of international aid is anywhere on the horizon. But hopefully this discussion itself will move from criticism of aid effectiveness to actually achieving inclusive economic growth. The answer, once again, seems to lie in the donors learning to trust the Afghan government – not only giving it money, but also the wherewithal to spend it.