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Kabullish on Aid

Author: Greg Bruno
June 9, 2008

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When President Hamid Karzai arrives in Paris this week to pitch the Afghanistan National Development Strategy to donor nations, attention will undoubtedly focus on the eye-popping financial request: $50 billion. Afghan officials say that's what it will cost to stabilize the country's financial, security, and political sectors over the next five years. But like the challenges NATO has had in obtaining troop commitments for security, Afghanistan's civilian institutions face an uphill climb in convincing Western governments to pony up. The country continues to struggle with a resilient Taliban in the south, unrest along Afghanistan's border with Pakistan, limited central government control, and endemic corruption, any of which could make some donors nervous (NPR).

For Afghanistan, the stakes are high: Foreign assistance makes up the bulk of Afghanistan's public spending—90 percent by some estimates. Since 2001, an estimated $25 billion in humanitarian aid has been pledged, with the U.S. accounting for roughly one-third of that. An April 2008 report from the Congressional Research Service, however, notes that while the United States has spent roughly $140 billion on the Afghan mission since 2001, only about $11 billion has been allocated for foreign aid and diplomatic operations (PDF). Nor have pledges kept pace with delivery. The humanitarian group Oxfam International estimates that only about $15 billion of the money promised has been paid (PDF), and roughly 40 percent of that has ultimately been returned to donor countries in the form of "corporate profits and consultant salaries."

To be sure, Afghanistan is a vastly different country (PDF) today than it was just seven years ago. Roads have been built, schools erected, and access to basic health care dramatically expanded nationwide. According to statistics cited in the national development strategy, nearly five million Afghans have returned home, "one of the largest movements of people to their homeland in history."

And yet building on progress continues to prove daunting. Afghanistan struggles with integrating two types of aid (World Politics Review): military aid to the part of the country at war, and development aid to the country's peaceful regions. Anna Husarska of the International Rescue Committee agrees that the separation isn't clear enough. In an International Herald Tribune op-ed, she writes that a greater distinction needs to be made between security and humanitarian programs. A recent World Bank/IMF review of the Afghan development strategy finds other problems. It says Afghanistan must improve its financial management and budgeting systems before it can properly manage large infrastructure projects.

Afghan officials, for their part, say they are tackling their institutional morass, albeit slowly. In a combative interview with the German newspaper Der Spiegel, President Karzai said his government is working to bring accountability to the budgeting process, improve security, and feed the country. Mahmoud Saikal, a senior advisor on the national development strategy, tells CFR.org that the document is a blueprint to lift his country from the abyss. Yet Afghans still complain that their hands are often tied because only a small percentage of foreign assistance is channeled through their federal budget, while the bulk is spent directly by donor nations. Without direct control of funds, they say, the potency of rebuilding programs is weakened. "We believe that the effectiveness of aid is much larger when the money is spent by the national government," the Afghan finance minister told CFR.org in April 2008.  

Some international development experts are optimistic that donors in Paris will heed such advice, and UN officials are hopeful the international community will coalesce around the strategy. But other expectations are less rosy. The Economist argues that the biggest hurdle to success remains the Afghan government itself. "Unless the Kabul government can be made to work more effectively," the efforts of the international community "may be in vain," it writes.

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