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Afghanistan war: USAID spends too much, too fast to win hearts and minds

In the Afghanistan war, it's quantity vs. quality: The USAID battle for hearts and minds is being lost just as President Obama's 'civilian surge' prepares to more than double annual assistance to $5 billion.

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Those who implement USAID projects report an increasing focus on "burn rates" – a measure of how quickly money is spent. Emphasis is put on spending fast to make room for the next tranche from Congress. "It's not that there is too much money, it's that it's all spent at one time. There is no absorption capacity," says Lorenzo Delesgues, director of Integrity Watch Afghanistan in Kabul.

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Or, as James Graham, the former country director of the four-year Badakhshan contract puts it: "Part of the problem is when you were working in the 11th century, what is the capacity of the 11th century to absorb the 60 million bucks? Especially when there are people who are looking to put a lot of that in their own pocket."

In the case of the Badakhshan project, burn rates accelerated in the final year (2009) as the contractor tried to unload the 40 percent of the budget that was unspent. Some went to shoddy paving and power canal construction, some to heavy equipment, and some to last-minute handouts.

Staying within absorption limits is "Development 101," says Mr. Delesgues, "but here you are fighting with the calendars of Congress."

Many of the aid groups that have worked the longest in Afghanistan, like the Swedish Committee and CARE, know this and avoid bidding on USAID jobs. That's left USAID with nowhere to turn but for-profit contractors happy to take the money.

The aid community here is rife with tales of big-contract waste such as:

•A project that flew a team of expert cobblestone-road builders to Helmand Province from Bolivia to build a tourist road instead of just using gravel. Mr. Graham says USAID pushed – unsuccessfully – for cobblestone roads up in Badakhshan as well, despite the region's frost heaving.

•A bridge built by an international contractor near Jalalabad that washed away after the contractor failed to take into account the springtime swelling of the river.

•A massive new turbine for the Kajaki dam that remains unused after NATO diverted thousands of coalition troops to escort it through enemy territory in Helmand. It's too dangerous to bring the cement to install it.

•Three girls' schools built by the international community all within miles of Bagram. The mayor says one is attended only by a bored security guard, pigeons, and squirrels.

•The 40 criminal cases – including contract fraud and bribery – being pursued by the Special Inspector General for Afghanistan Reconstruction (SIGAR), which has recently recovered more than $2 million from contractors.

"Many of the NGOs could do a far better job, but there is no way that we can responsibly deal with contracts worth $300 [million] to $400 million," says Lex Kassenberg, Afghan country director of CARE International. "Yet somehow a lot of these consultancies are given the jobs even when not qualified."

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The BadakHshan contract wound up with PADCO, a US firm that had no prior experience in Afghanistan, after more experienced nonprofits like the Aga Khan Development Network shied away. The AKDN has been working on a lot of projects for the National Solidarity Program (NSP), an Afghan government program funded by international donors, including the US, that has spent $1 billion bringing bottom-up development to 70 percent of Afghan villages.

The for-profit model like that of the Badakhshan project relies on satisfying contract terms and moving to the next contract. Without the trust of long-term relationships, many firms spend up to a third of a contract on security.

USAID officials and other aid experts say the answer isn't to scale back spending but to upgrade the agency staffing to handle it better.