Afghanistan

  Aid and Corruption

  Poorly targeted and directed aid programs have hurt the legitimacy of the entire international effort over the past 10 years. They have also helped feed corruption, albeit unwittingly. When Afghans have seen foreigners either dividing aid money pledged to Afghanistan up among themselves or spending it unwisely, it appeared an open invitation to have some of it themselves as soon as they are given the opportunity. This has led to a crisis situation where corruption threatens the legitimacy of the Afghan government and the steps being taken to counter it by donors also have the potential to do more harm than good.

  The Afghans saw that the aid system was siphoning off most of the money before it even reached Afghanistan. Adjusting to the rules of the new game, Afghans started to take off their share as well as soon as they could. The result, however, of this new game has been to make losers of the vast majority of the Afghan people and those elites that have not benefited from it. In 2009, the US had three inspector general organizations watching how aid flows through to Afghanistan. Yet reducing corruption in Afghanistan is going to take a long time, and Afghanistan needs well-directed aid to avoid a short term crisis. “Spending money in Afghanistan and avoiding corruption is hard to reconcile. You have to accept some risk,” said Mark Ward, a UNAMA official working on aid issues.639 The risk is not a trivial one, considering the importance aid has had in creating the culture of corruption that threatens Afghanistan, yet it is probably better to accept policies that give the Afghans more authority and insist that they assume more responsibility, even if this means a higher risk of diversion of resources.

  The perception of corruption helps ensure the reluctance by donors, especially the US, to relinquish their control over the aid process and allow the Afghan government a larger role in both determining priorities and implementing programs. Aid has also contributed to the rise of the culture of corruption by hiring many of Afghanistan’s competent former civil servants and technocrats away from the Kabul government and into their international or donor organizations. In addition, too often the aid process has demonstrated a lack of transparency and accountability by both the donors and recipients.

  Aid and the Afghan Economy

  Afghanistan needs a functioning private-sector national economy for long-term peace and stability. Afghans identify unemployment and the lack of a way to legally prosper as the most important single threat to national security. The insurgency is ethnolinguistically largely limited to the Pushtuns, while unemployment is a nationwide crisis that gives insurgents, warlords, and narcotics traffickers alike more power through their ability to offer jobs where there otherwise would be none. If Afghanistan’s economic situation in recent years was perceived internationally as not as critical as its security situation, this is due to the influx of aid and the money from opium cultivation. Real legal GDP growth has not reached the 14 percent experienced in 2005, but has still remained relatively high, at an estimated 7.5 percent in 2008. Inflation has been reduced from ten percent in 2008 to seven percent in 2009. However, food and energy costs increased in 2008 and the impact of the world economic downturn in 2009 created real hardship among the poor even if it did not undo many of the post-2001 gains reflected in development in Kabul and the availability of work on development programs.640 While this did not lead to food riots or hunger, even after neighboring countries restricted their exports, it became harder for the average Afghan to live. The hope for a better life that all Afghans shared after the ouster of the Taliban receded.

  Despite busy bazaars, a trading tradition, and a history of free exchange and silk-route merchants, Afghanistan’s economic development before the 1978 Communist putsch was dominated by the state. Since the 1980s, the part of the economy outside Kabul’s control has been dominated by regional markets and an economy based on illegal extraction: opium, smuggling, clear-cutting forests, and weapons trade during the Tajikistan Civil War. Much of the recent development since 2001 has been dominated by foreign donors and investors or those Afghans who have access to money and connections abroad, sometimes illegal: the trans-border transport and lumber mafias, narcotics traffickers, and the Kabul real-estate developers. Other Afghans used connections with Saudi Arabia and the Gulf, dating back to the war against the Soviets, to access investments from there. The creation of an entrepreneurial Afghan diaspora since 1978 has made possible much of the recent legal economic growth. Those who did not return to Afghanistan have often provided investment and access to international markets and investment. But the global Afghan community does not have the human and natural resources nor the access to capital like China or India.

  As with aid, there are examples in Afghanistan of economic success that can potentially serve as a model that can be applied to other sectors. The communications sector provided an example of a success through private investment that has avoided corruption. Media growth, also privately funded, means that even remote Afghan villages can now share Internet access and satellite television or listen to a broad range of news sources. Banking and finance, writing on an almost blank slate since 2001, have grown effectively, linking Afghanistan to the world economy and providing Afghans with a way to transfer funds other than the hawala system. This means ANSF personnel no longer have to leave their posts to deliver their pay to their home villages. Afghanistan now has a thriving privately owned transportation sector, ranging from international airlines to single truck operators. The high rates of economic growth created by the development of Kabul provided employment to a large number of Afghans. If this can be recreated on a national basis, it would directly attack the economic insecurity that clouds Afghan life today. Investment in the agricultural sector to enable exports also has the attraction of being able to potentially provide employment in areas where today poppy cultivation is the only alternative. Resource development, such as the Chinese investment in copper deposits, is another potential source of economic growth. However, Afghanistan is unlikely to achieve a functioning national economy until it can offer Afghans and investors alike security and rule of law. While these remain out of reach in the areas dominated by the insurgency in the south, instability has not blocked economic growth throughout Afghanistan. Nangarhar province continues to be the location of a strong cross-border trade with Pakistan despite the insurgency. Kabul and the more secure provinces in the north and west have better economies, and these offer potential for investment and growth.

  Nothing is more important for Afghanistan than creating a viable private-sector—based national economy. It can provide more resources than aid and, more than any number of troops, offers the potential for a more stable future. The problem is that the troops are required to prevent the threat of terrorism, insurgency, and narcotics from sweeping away this future in the near term. The Kabul government and foreign donors alike have recognized the importance of the private sector, but nurturing it has often proven problematic. Applying the successes in communications, media, transportation, and other sectors throughout the economy has been difficult. The impact of decades of state domination of the economy is still being felt, but privatization efforts have often been undercut by corruption and favoritism and have failed to take advantage of the collectivist nature of traditional Afghan society to give grassroots Afghanistan a stake in the process and, through that, a feeling of belonging in the future of the national economy. “Public ownership should have been through letting the locals buy shares and collect dividends,” was the view of a veteran journalist in October 2008. Instead, it has been marked by widespread accusations of corruption, most notably in the leasing of copper mining rights to China and in the sale of state assets, such as cement plants, to foreigners working in partnership with Afghans with family connections to the Kabul government.

  Creating the New Afghanistan

  The ability of aid, like foreign armed forces, to produce desired results in an Afghan context is, and will continue to be, limited. Merely throwing troops or money at the situation in Afghanistan will not be
effective unless it is part of an overall strategy integrated to meet Afghan realities and encourage Afghan participation, decision-making, and responsibility, all vital if the country is to be viable with a reduced foreign troop presence and aid flow in the future. The deteriorating security situation in recent years has limited the ability for aid to reach into the areas where there is, arguably, the most need for it, especially in southern and eastern Afghanistan. Even though the situation in Afghanistan mandates more troops and more aid, neither is sufficient, individually or together, to ultimately create stability that will enable Afghans to live and grow their economy in peace and not revert to being a source for global terrorism, regional instability, and narcotics. More nuanced and responsive policies must be employed, aimed at enabling the Afghan ability to rule themselves and withstand the effects of terrorism, insurgency, narcotics, corruption, warlords, and all that would return the country to the decades of conflict that came close to destroying it.

  The need to have Afghans act on behalf of Afghanistan applies to allocating aid resources as well as carrying rifles in the ANSF. Mark Ward, special advisor on development to UNAMA, said “We have got to train Afghans, not have more Pakistanis, Indians, or Iranians doing skilled jobs.”641 This course of action will ensure that local Afghans will be involved and have a direct stake in the future development while still empowering Kabul as the national government to use incentives for cooperation that only a central state could provide: roads, health, and the educational system, including universities and scholarships.

  Development that is inserted, top-down, by Kabul, foreign military forces, or NGOs, without consulting local Afghans whom it will personally affect and without insisting that there be an opportunity for buy-in and a corresponding expenditure of resources—however limited—by the local population, will remain alien and undervalued and thus the target for insurgent attack. This is the only way to create sustainable solutions that the Afghans will agree to and take ownership of and, eventually, pay for and maintain themselves. This is reflected in the Afghan government’s Nationality Solidarity Program (NSP) having a “requirement of a ten percent community contribution toward the cost of projects” to give them a stake, according to Eshan Zia, former Minister of Rural Rehabilitation and Development.642 Contributions can be cash, labor, or donation of resources, but are vital to give the locals and their kin a stake. Other local contributions have come as a result of grass roots initiatives. Local shuras or jirgas that want development in their home area will often levy such contributions to show support and attract potential donors or patrons. Projects done by Afghans are also cheaper than those done through foreign contracting. The cost per Afghan-contracted classroom in a school comes to 13,000 dollars, which is less than a third of the cost associated with foreign contracting for the same job, according to Jim Drummond, director of the South Asia division of the UK’s DfID.643

  Effective development will have to reach agriculture and religion, two areas of great importance to the average Afghan. Agricultural development will have to be tailored to each district. The Afghan state supported the emergence of cotton cultivation in the Golden Age, and there have been proposals to revive this. Afghan high-end produce, the raisins and pomegranates it has grown for centuries, have ready potential markets in the subcontinent and central Asia. Expanding such markets requires reconstructing Afghanistan’s agricultural infrastructure and removing political barriers to international trade. Friendly Islamic countries, such as Turkey, could be used as intermediaries to work with developing Afghan religion as a social force so as not to concede its role in Afghan life to those aligned with the insurgents.644 Such aid from Islamic donors can help provide mosques and maintain mullahs, while creating a system of Afghan religious education aimed at keeping radicalized pro-Taliban mullahs from holding political power or mobilizing public opinion in sermons against the Afghan government and constitution. Other foreign supporters need to be approached to mobilize their religious establishments to counter the claims that the coalition presence in Afghanistan has become part of the international “war on Islam” that is at the heart of efforts to enlist support for terrorists and insurgents.

  Afghanistan will require a strong aid effort, the “pot of gold” that rewards cooperation rather than conflict. This same philosophy should apply too when trying to shore up a much more developed but troubled Pakistan, whose impact on Afghanistan, for better or worse, is undeniable. Any aid effort is a hard sell, considering the financial downturn among the rest of the world. Years of aid have not led to a secure Afghanistan, but there is no substitute for an influx of aid as a way of helping to stabilize the region and prevent more costly wars in the future. Aid is more effective in the long term than troops in bringing security to Afghanistan, but without troops there will not be the security that aid programs require and that allows Afghans to better their own lives. Aid needs to create a non-corrupt government to enable a functional private-sector economy that offers Afghans a chance for a life above subsistence levels that will not force them into siding with the insurgents or growing poppy for lack of alternatives.

  Aid and Pakistan

  Aid to Pakistan, like much of the US policy in the region since 2001, has reflected good intentions but has not been effective.645 It is not unexpected that President Zardari has made requests for aid a central part of his relations with the US, telling a reporter “We have many plans including dealing with the 18,000 madrassas that are brainwashing our youth, but we have no money to arm the police or fund development, give jobs or revive the economy.”646 Yet Zardari’s political weakness, the military-led nationalist opposition to the US oversight provisions in the Kerry-Lugar aid bill, and the poor track record of Pakistani governments, civilian or military, in dealing with such fundamental problems, show that it will be difficult for aid to Pakistan to create tangible improvement. Despite this, aid to Pakistan remains an important tool to help create change in Pakistan that will contribute to reducing the security threat to Afghanistan.

  Aid has become even more important with the impact of the economic downturn in Pakistan. Before then, the growth in Pakistan’s economy provided the resources for constructive change even if political insecurity and the Musharraf government’s lack of legitimacy limited widespread application. Pakistan’s more established economy allows the US to work with international financial institutions such as the International Monetary Fund, World Bank, and Asia Development Bank to a greater extent than in Afghanistan. Pakistan has a well-established banking system and a governmental infrastructure, including a still-independent if flawed judicial system.

  US aid to support Musharraf’s rhetoric of reviving civil society and strengthening state institutions, such as the school system, proved inadequate in scope and limited in reach. About eighty percent of the 11.8 billion dollars in aid to Pakistan provided under the Bush administration went just to the military in order to rebuild conventional forces to balance India rather than to create a counter-insurgency capability. Little went to military efforts to aid internal refugees from Pakistan’s insurgency or natural disasters. US development aid to Pakistan, targeted at the FATA, had limited effectiveness due to violence undercutting any capability for hands-on direction on the part of the US.647 There was widespread concern in the US, especially the Congress, that there was insufficient accountability for how aid funds were being spent in Pakistan. This led to the inclusion of oversight and transparency requirements being included in the 2009 Kerry-Lugar aid bill.

  Pakistan needs to receive priority in stabilization efforts because the stakes are higher and the potential for collapse is not a graceful bankruptcy but the emergence of a long-feared “nuclear Somalia.” In the short term, the population’s vulnerability to increased energy and food costs must be combined with balance-of-payment and budgetary support in determining aid priorities. In the longer term, the best aid approach to Pakistan would be to remove constraints imposed by the US or European Union (EU), such as lifting texti
le quotas or freeing up funds for investment in regional energy pipelines. Additional funding—perhaps as much as fifty billion dollars over ten years—is required for Pakistan to start to rebuild its civil society and build up governmental and non-governmental organizations that will contribute to stability and help combat the political incapacity and internal violence that threaten its future.

  In 2009, a renewed aid approach was implemented by the Obama administration, aiming to create greater leverage for the US in Pakistan. This started with the 19 May 2009 commitment of 110 million dollars in relief aid. The Kerry-Lugar aid bill passed the US Senate in October, described as “very heartening” by GEN Petraeus.648 The Kerry-Lugar bill provided Pakistan with 1.5 billion dollars a year over the course of five years with a separate provision for military aid worth over 1 billion dollars and was considered to be a necessary complement for the further 5 billion dollars in international loans pledged at Tokyo in April 2009. Yet Kerry-Lugar became an explosive issue in Pakistani politics during October 2009.649 The Pakistani military used this issue to rally nationalist sentiment against the civilian government, using the unpopularity of the US among elites and grassroots alike in Pakistan, saying that the oversight provisions were imperialist interference in Pakistan’s sovereignty and that the certification provisions were an attempt to undercut the position of the Pakistani military in domestic politics. Public dissatisfaction with US UAV attacks, despite the fact that the Pakistani military cooperates with them, also fed into this opposition.650 This reaction to the Kerry-Lugar bill also served as a public statement that the Pakistani military, even if they were forced to reluctantly take military action against domestic Islamic radicals and insurgents, were not going to be leveraged by the US to take open and public action (intelligence sharing and targeting excepted) against Afghan insurgents in their sanctuaries in Pakistan. The military objected to the bill setting conditions for the aid, which required that the US secretary of state certify that Pakistan is dismantling nuclear-proliferation networks, that Pakistan remain a democracy, that civilian control be maintained over the military and the defense budget, and that the government of Pakistan is not supporting militant groups on its territory. Even though there were provisions for the US president to waive these conditions, the precedent for questioning the military or putting it under democratic supervision was at the heart of opposition to it in Pakistan. The Pakistani military saw that accepting the provisions in the Kerry-Lugar bill called into question their self-appointed role as the guardians and definers of the country’s national security interests, which includes allocating aid received, and as attempting to empower a civilian political system they increasingly saw as corrupt and dysfunctional. Aid will continue to prove a critical issue in the difficult US relationship with Pakistan’s military.