TCS Daily


How an Overabundance of Foreign Aid Is Killing Afghanistan

By Joshua Foust - February 27, 2007 12:00 AM

Since the Soviet invasion of Afghanistan in 1979, Non-Governmental Organizations have filled in the gaps left by an otherwise absent government—schools, health care, employment, and so on. After the American invasion in 2001, billions of dollars have flowed into the country, funding a massive reconstruction effort. The story of aid in Afghanistan is not all unicorns and sunshine, however. Its very abundance—over $8 billion pledged this year alone—is harming the country's ultimate chances of success.

Overabundance is not a problem traditionally associated with humanitarian missions. Indeed, quite often the opposite is true with programs lacking the funds required by their mandates.

The unfortunate reality in Afghanistan is that, no matter the amount donated, it would be too much. This is because Afghanistan's biggest problem is not poverty, but government.

Before the 2001 invasion, there were no institutions to speak of—no government, no services, no formal economy. There was simply no way to provide basic services, like police or fire fighting or medicine.

Yet even after years of what the IMF calls "building capacity," Kabul cannot manage its resources effectively. Trying to unravel the financial mess, the World Bank in late 2005 drafted a report on Afghanistan's public finances. It contains some sobering statistics: domestic revenues are only 5% of GDP, the fiscal deficit is financed entirely by a foreign aid, the entire operating budget is managed by a trust fund. The government cannot directly channel the reconstruction money, so it delegates to NGOs and the U.S. Agency for International Development (USAID). As a result, it exercises no control, no accountability, and, most ominously, no legitimacy over the reconstruction process.

Normally such a state would be ideal: keeping aid projects outside the corruption associated with a developing country's government should be a good thing. Except in Afghanistan. Here, the separation of aid and government, rather than minimizing corruption and creating legitimacy, is doing the opposite. As a result, the central government is still barely recognized outside Kabul, and corruption is rampant everywhere.

In Afghanistan, the NGOs operate as their own quasi-governments, with private security forces (either foreign or local), rule sets, and disbursement guidelines. While USAID projects are watched over, it is difficult to calculate how smaller NGOs operate. A facile comparison would be between an AIDS clinic in Uganda, which ultimately answers to the government; and a girl's clinic in Uruzgan, which answers to its sponsor. Kabul is cut out of the process, essentially exercising zero control over funds, strategy, or projects.

This is a bit of an oversimplification, as the national government itself performs some of these functions, in a limited context in a limited area. But the result is the same: when a well-meaning NGO moves in for a new project, often with NATO support, the villagers are in effect told the government controls nothing. In other words, keeping aid and government separate keeps the government illegitimate, making it extremely difficult to establish Kabul's relevance in other provinces.

Aid must therefore have some connection to government policy. Because the World Bank runs Kabul's finances, there is already a record-keeping system in place, which would stymie fraud. Most corruption in Afghanistan stems from opium anyway, and not necessarily aid money. Because of that, local governors and officials are loathe to get too involved with the reconstruction teams, as it makes them a target for the drug lords and Taliban. Making all aid projects budgetary line items—turning them local, instead of keeping them foreign—would make the reconstruction more about Afghanistan itself and less about the interests of the donor countries.

President Bush has requested about $8 billion for Afghanistan. This should be used to reinvigorate the Ministry of the Interior so it can properly channel and coordinate reconstruction efforts. The ultimate providers—USAID, its contractors, or private NGOs—don't have to change, but how they're coordinated should. All projects should be coordinated through various local government ministries, essentially turning them into contractors of the national government. This would introduce two improvements: a domestic budget to keep track of how money is spent, and an additional layer of legitimacy for the central government.

In this way, a much clearer message can be sent: the NGOs are there to accomplish goals approved by and in coordination with the government in Kabul—Afghan projects for Afghans. Hamid Karzai's government will be made responsible to its people, in that it will have to answer for whatever happens at the local scale.

The problems of foreign aid are never simple, so it's not easy to do them proper justice in any short format. But the aid flowing into Afghanistan desperately needs to be allocated with much more care, with coordination from the central government instead of the international donors. Building confidence in Afghanistan's government, not the NGOs, is a key to achieving peace in Afghanistan.

Joshua Foust is a writer living in Washington. He contributes to The Registan, a blog focusing on Central Asia.
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14 Comments

killing me gently
It could be that they're just following J. Sachs recommendations that even though trillions have been wasted in foreign aid, and that it has been shown to be harmful, we should just keep forcing reluctant people to keep giving. And of course all those NGO guys who are the proxy governors of those places, are not some kind of volunteers like the Peace Corps, but are highly paid special interest groups whose cushy gravy train depends on naive westerner governments stealing money from their citizens so that the 'Big Aid' industry may continue to grow.

More government control
This is not your standard TCS fare, to say the least. Afghanistan's problem, to this author, appears to be that its government is not big enough or intrusive enough.

He sees a basic flaw in nation building occurring under private auspices. Everyone knows it takes a big government to create all the institutions a country could ever want!

No Subject
Governs best, governs least? In Afghanistan it governs not at all. Unless you're an anarchist, even libertarians recognize the need for government: enforcement of contracts, police forces, and so on. The central government can barely pay the police in Kabul, to say nothing of anything else anywhere else.

There is a huge problem with nation building under private auspices: sovereignty. When an NGO moves into a country, who is responsible for them? If they're captured or kill, who deals with it? You can't dodge the issue by saying their government should abandon them to their fate, because you know a representative government cannot do that. What right has a foreign NGO to come into another country and tell it how to run its business?

The issues caused by NGOs have created a separate class of literature studying the incredibly complex problems they create. Making these NGOs accountable to the representative government of Afghanistan is the best way to sidestep the understandable xenophobia of rural Afghans, while minimizing other attendant issues of operating in a security-poor zone.

so true

Nanny state protection
"There is a huge problem with nation building under private auspices: sovereignty. When an NGO moves into a country, who is responsible for them? If they're captured or kill, who deals with it?"

It's no one's problem but their own. When you go into a lawless area you willingly undertake risks knowing you're operating without a net.

In Afghanistan it got so bad back in 2003 or so that Doctors Without Borders pulled out. And they never pull out. They even stayed in Chechnya. So Afghanistan is not for the faint of heart.

I do not understand the following: "You can't dodge the issue by saying their government should abandon them to their fate, because you know a representative government cannot do that. What right has a foreign NGO to come into another country and tell it how to run its business?"

What the hell business is this of anyone but the person volunteering to put himself in harm's way, outside the protection of any sponsoring government? Don't we have NGOs recisely because in this world there are crucial things needing to be done, that governments ignore and that private industry finds unprofitable?

Describe for us a sample problem, from the "incredibly complex problems they create". Problems for whom?

Governments Respond to Irrational Popular Demands
Problems for the host country, for one. NGOs often have interests that are at odds with conflict resolution. For example, in the process of operating a refugee camp, they treat militants as well, and are often turned into staging areas for further attacks.

From Strategy Page:

"The NGOs, as they have taken over the delivery of foreign aid during the last half century, have also become part of the problems they are trying to treat. Despite their description as “non-profits” and “relief workers,” the NGOs live from contract to contract. While “non-profit,” they are not “non-revenue.” They have to bring in contracts to take care of their payroll and expenses. This has become an issue in some of the countries where NGOs operate. The locals have been noticing how much of the aid money given to their country is going through the NGOs, and how the NGOs use a lot of it to pay NGO expenses, and generally distribute the aid as they feel best, without a lot of consulting with the locals. But a major reason so many donor nations prefer to give aid via NGOs is that it cuts down on corruption. In too many poor countries getting emergency aid, local officials are quick to divert aid to personal use."

Except the unique conditions in Afghanistan would minimize much of the corruption normally associated with an NGO.

Plus there is the issue of sovereignty. If an NGO security worker commits a crime, who holds him responsible? The non-existant government? The NGO?

Karzai
Too bad Big Brother doesn't have the guts to bring Hamid and his corrupt cronies and family into custody for providing false intel to the US Gov over the years, and extorting millions in taxes from the US taxpayers, misappropriating funds, etc.
Hopefully, my recent meetings with Constitution Party operative Don Rosenberg and Libertarian Party reactionaries here in Nassau County will help me get nominated and elected to serve honorably and save the tax payers some big bucks.

re NGOs as not non-profit
Good reference about that. It's a myth that they are non profit, they are very profitable for the guys who organize and run these modern day mafias. Indeed, I remember guys telling me about how in
east timor a few years ago it was getting scandalous. There they were in a broken down poverty striken place, but new trendy yuppy cafes were sprining up all over to cater to all the rich ngo workers riding their gravy trains while the locals suffled past looking for some scrap of rice. NGOs are a multi billion dollar businesses, the beneficiaries are their own staff.

Giving aid and comfort
"Problems for the host country, for one. NGOs often have interests that are at odds with conflict resolution. For example, in the process of operating a refugee camp, they treat militants as well, and are often turned into staging areas for further attacks."

This would seem to be an excellent rationale for doing away entirely with hospitals and clinics in the targeted countries. After all, is it not possible that insurgents might come, seeking treatment? Can't have that.

Also providers of food and shelter should be put out of business, lest the fedayeen avail themselves of these humanitarian services.

I believe you have intuited the proper approach for winning over the hearts and minds of the populace. Treat 'em rough!

And if an NGO worker commits a crime in an unsecured area, I believe it is up to the resident population whether they want to skin him alive, or whatever else they deem to be the proper resolution. Whereas if he be in an area where the writ of law applies, that writ shall fall upon his shoulders like the wrath of Jehovah.

Oh Please
I'm talking about problems from a legal and policy standpoint, not your delusions of Heinlein.

I'm curious as to what your alternative is, since you don't seem to have one. Shall the U.S. invade countries that do pose security problems, then refuse to properly manage the aftermath since that is "up to the local population?"

A difference in interpretation
"Too bad Big Brother doesn't have the guts to bring Hamid and his corrupt cronies and family into custody for providing false intel to the US Gov over the years, and extorting millions in taxes from the US taxpayers, misappropriating funds, etc."

Our foreign policy establishment are not babes in the woods. We CHOOSE to believe those persons whose figurehead movements we want to endorse-- whether or not they lie, whether or not they have any genuine following, etc. We know they're full of crap-- but it's OUR crap.

Comes now Ahmed Chalabi, pleading the cause of a democratic Iraq (and the sovereign right of self-enrichment). And behind him, Iyad Allawi... same cause, same pleadings. Or, invoking the cause of a free and democratic Iran, witness Manucher Ghorbanifar-- one of the most conniving, triple crossing swindlers ever to have curdled his mother's milk.

We're always going to have some guy like that up our sleeve or on display. Not to have fore-armed ourselves with a plausible proxy leader to endorse, we would have to admit to the world that we were just in those countries in our own self interest.

Delusions of Heinlein
That's a good one. I'm going to have to remember that one.

Re countries posing security problems for Americans, I would offer this low cost solution:

DON'T GO THERE.

Re managing problems in the absence of any lawfully constituted authority: the fact is, by definition these problems will be resolved by local initiative. NGOs operating in lawless areas do take that chance.

If we're going to examine our own activities in the eastern marches from a "legal and policy standpoint" we should admit that destroying Iraq's government and substituting one of our own invention was an illegal act under relevant international law. As was dictating to them the terms of their new constitution, after declaring the old one to be null and void. Those are not lawful acts.

I suppose though, by allowing such things to be self evident and reliant on observations within the real world, I am just betraying my Heinleinian roots.

go hide
Countries make laws, the U.N. and international groups make treaties and agreements. Therefore, wars and regime changes can not be "Illegal. "International Law" exists only where it can be agreed upon by all parties involved and enforced. who does the enforcing?

Now it may have been "immoral", but who decides the morality of the situation? Is it moral to allow despots like Saddam to opress and kill? What if they go against said international agreements, support terrorists, attack their neighbors?

You are a moral relativist and an internationalist. You hat America and blame it for all the world's ills.

Have fun with that roy!

Straying off the reservation
I think you're hiding behind euphemism. A body of international law can only be built through treaties. So if nations sign to such an agreement-- the Geneva Conventions, for instance-- and then forego abiding by its tenets, we would say in casual sppech that they are "breaking the law". Which is a way of saying more precisely that they are abrogating their treaty obligations.

Is it moral to allow, in ridiculously loaded language, despots like Saddam to oppress and kill? An axcellent theoretical case can be made that it is not.

But how about the instance where in real life we have caused violent death rates there to be greatly higher than they were under any period during Saddam's rule? And furthermore that we have destroyed the rule of law in that nation, without its consent? And further, that we have given them a legacy of intractable civil war, where before our uninvited entry they were governed by a strict authoritarian regime that gave them-- at a price, to be sure-- a body of law, a measure of social justice, a progressive social environment (nonsectarian body of law, equal treatment of women, etc) and order in the streets?

So in that light, have we improved their lot? If you scroll forward to the future you see the likelihood that after our departure blood will flow in the streets until the time when some new Saddam gains control of the body politic, destroys all his enemies and once again restores law and order.

So our experiment will have gained the recipient nothing, other than the death and destitution of untold numbers who would not have died had we not performed our act of "regime change".

You're tired tirade "What if they go against said international agreements, support terrorists, attack their neighbors?" amounts to kicking a dead horse. The subject is no longer Saddam. The subject is continuing aggression against the defenceless remains of what used to be Iraq. And the aggressor today is an entity well known to us all. His departure from the scene will not be missed.

So yes, in this instance the moral to be drawn is relative. We have replaced an evil with a greater evil.

Am I an internationalist? I believe people are the same the world over, and should all enjoy the same rights. Among them, the right to be secure in their homes and persons-- which are today placed in jeopardy by the militarism of an outlaw nation.

So, I would plead guilty as charged. But I think we stray from the subject. How does this relate to the activities of NGOs in areas where governmental programs do not alleviate the suffering of the population? That, I believe, is what we were discussing.

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