So a report that suggests the US government reevaluate how it invests in Afghanistan – with an eye toward ensuring that development spending create lasting solutions rather than long-term problems – is finding a welcome audience here.
“They should have made this [suggestion] years ago, even at the start of the war,” says Nadir Khan Katawazai, a member of parliament from Paktika province. “Billions of dollars came to Afghanistan and except for some highways in the country and some other infrastructure projects we don’t see any other benefits from that aid.”
The report released Wednesday by US Congress goes so far as to say that Afghanistan may face an economic meltdown when international forces leave in 2014 if the US continues its current aid policy.
“Foreign aid, when misspent, can fuel corruption, distort labor and goods markets, undermine the host government’s ability to exert control over resources, and contribute to insecurity,” said the report by the Senate Committee on Foreign Relations.
Although the US has invested nearly $60 billion dollars in Afghanistan since the start of the war, the report examined only the $18.8 billion appropriated by Congress to the State Department and the US Agency for International Development (USAID). Those two agencies alone spend $320 million each month on development in Afghanistan.
The sheer volume of cash invested into the impoverished country has reshaped the economy. Now 97 percent of Afghanistan’s gross domestic product (GDP) comes from spending related to the international military and development community.
This GDP assessment does not take into consideration the role of opium in the economy. As recently as 2007, opium production accounted for up to half the nation’s GDP, but it is now closer to a quarter.
As such, Afghanistan’s economy is anything but the picture of long-term stability.
Limited oversight of money
Despite the mass influx of aid money, there has been extremely limited oversight of how the money is spent once it’s doled out to contractors and development partners.
In Paktika, Mr. Katawazai says he’s seen US officials build a clinic against the wishes of the local people. More than a year after its completion, he says it still does not have doctors or medicine. Stories such as this about empty schools and hospitals are common throughout Afghanistan.
It has become common practice for groups who secure a development contract to hand it along to others, who then pass it on to someone else, with each person taking a commission along the way and leaving a fraction of the money originally intended to implement the project.
In Takhar province, Parliamentarian Maryam Kofi says that one of her female constituents once complained that a third party who was trying to sell an aid contract demanded sex in addition to his commission.
“I am happy to hear that the US government is talking about the corruption in aid projects and they want to have more transparency,” she says. “Of course there is corruption at all levels among those who are involved in spending the money, but at least some of it reaches the people. That’s why I say it’s better to have it, rather than to stop it.”