Afghanistan's Finance Minister Omar Zakhilwal says he’s hoping that international donors convening Tuesday in Kabul will agree to better enable the country to be self-reliant. To do so, he says, the donors must cut down on the waste and fraud that has hampered development programs, and entrust the government with greater control of aid money.
“Our expectation from the international community … is to respect Afghan leadership and to be serious about building Afghan institutions – not undermine them,’’ said Mr. Zakhilwal in a briefing with a small group of reporters ahead of the Kabul Conference.
Senior officials from about 40 countries – including US Secretary of State Hillary Clinton – are expected to attend the event, the ninth major donor conference since the country was invaded in 2001.
Taking place against a backdrop of unprecedented civilian and military casualties, both Afghan and international, governments and aid groups alike are under pressure to demonstrate that the billions they have poured into projects here have been well spent.
In the world of Afghan aid spending – where a government with $1.5 billion in domestic revenue is running an $11 billion budget and the US has committed more than $50 billion to infrastructure and creating a national army and police force from scratch – there is plenty of criticism about where that money is going, and why.
Zakhilwal: Only 5 percent of US aid channeled through government
Afghans say they’ll be pressing for more government control over international spending. Foreign donors such as the US will be seeking guarantees that the money they provide won’t be diverted or wasted. They also may give their agreement to the government’s effort to “reintegrate” Taliban fighters into society.
US officials say they expect no new aid to be announced at the conference, though Zakhilwal says he’s hoping that $1 billion to $2 billion for infrastructure will be announced.
The meeting itself will effectively be a ratification of already agreed upon measures to improve aid spending here by better aligning international aid programs with priorities identified by the Afghan government.
Zakhilwal said he hoped the donors in attendance would agree to “waste” no more money on counternarcotics programs, channel more of their aid through the government, and place better controls on their spending to prevent the fraud that has hampered development programs here.
The US has channeled only about 5 percent of its spending here through the government, he says, compared to about 50 percent by Britain and “well over” 50 percent by Scandinavian countries.
“I say: ‘Give me more control.' They say: ‘You don’t have the capacity, so we’re going outside [the government],' " he says, describing the dynamic. "I say: ‘How do you have the capacity?’ They buy it at a very steep price,” he answers, pointing to the international consultants who work on aid projects here. For a “fraction” of the money spent, he said, the US could help build capacity within the Afghan government.
In a written response to questions, the US Embassy in Kabul said that 13.5 percent of US aid is being channeled through the government in the current fiscal year. Next year, the embassy says it will be 25 percent, assuming “the Afghan government establishes the necessary accountability and administrative procedures.”
Zakhilwal’s tone of independence was echoed by Afghan National Security Advisor Rangin Dadfar Spanta, who says that “Afghanistan is beyond the point where the international community can tell us what to do.”
'The impact could have been greater'
Contractors for USAID and other agencies, which have channeled some of the billions of US dollars spent here, privately say that hundreds of millions of dollars have been wasted, from petty instances of buying extra laptops for personal use to large-scale problems such as programs meant to attract foreign investment here yielding meager results.
A survey released by Integrity Watch Afghanistan earlier this month found that 1 in 7 Afghans have to pay bribes to receive government services, that many government employees must pay kickbacks to their bosses to receive their salaries, and that the country’s judiciary and security agencies are considered the most corrupt branches of government.
Mr. Zakhilwal accepts that his own government has been part of the problem but bristles at suggestions that corruption and inefficiency on the Afghan side is largely responsible for the $4 billion that he says flows out of the country each year. Last month, Congress withheld $4 billion in Afghanistan spending due to such concerns.
He says that money has often been spent recklessly to create an “illusion of development.” The international approach “leads to quick spending because they have to show” they’re doing something and the “money spent is used as a success indicator” rather than effectiveness. “I don’t want to sound ungrateful… but the impact could have been greater.”
He says that he welcomes US criticism in turn and that the government recognizes it needs to do more to control corruption on its end. “If [the Afghan government] is trusted by the international community but not by our own people, then we are in trouble.”
Is US aid responsible for drop in opium production?
In Zakhilwal’s estimation, “not a single penny” spent on counternarcotics has been effective or to the nation’s benefit. “What was the aim of this spending? Find a single farmer, find a village” and they’ll tell you that poppy cultivation remains a mainstay for tens of thousands of Afghans, he said. The US is spending about $700 million on counternarcotics in Afghanistan this year.
The US Embassy in Kabul disagreed and said that opium production has fallen by about a third since 2008, that Helmand province received a $10 million grant as a reward for reducing land under poppy cultivation by 33 percent, and that 373 “high value narcotics” cases have ended in convictions in the past yar.
Like any other commodity, heroin is subject to market cycles. Two years ago the poppy crop hit a record high, and many middlemen stockpiled supplies. The UN estimated 2009 production at 6,900 tons of opium (the raw material for heroin), against global demand of about 5,000 tons.
That mismatch between supply and demand has pushed down prices. This year’s crop was also hit by poppy plight, according to farmers, whose yields have also become dramatically more efficient in recent years. For instance, 2009 production fell 10 percent over the previous year with a 30 percent fall in land under cultivation.
$100 million to clean ditches; Afghans used to do it for free
Mr. Zakhilwal says US money channeled to emergency employment programs has been actively harmful because he said it has paid money to Afghans to maintain irrigation canals that they previously looked after on their own, and for no pay.
“When it gets to the project level, $100 million is spent on cleaning ditches ... that takes away self-help,” he says.
The US embassy wrote that “ 'cash-for-work' projects offer short-term solutions for Afghanistan, which suffers from massive unemployment both on a rural and urban scale. USAID direct implementation or cash-for-work projects seek to avoid rehabilitating canals and roads where the Afghan government or local authorities can provide their own means of repair or construction of these projects.”