Monday, March 22, 2010

Afghanistan: Donors spent $36 billion in Afghanistan in 2001-2009, how much was squandered by corruption?

Brisk business for this Kabul money changer. Donors spent US$36 billion in Afghanistan in 2001-2009

Afghanistan has been showered with foreign aid since the fall of the Taliban in 2001, but it has been an uphill battle for the government and its donor allies to prove it was all money well spent.

Critics contend there has been a lack of transparency and coordination and that much of the funding has been squandered through corruption, mismanagement and poor targeting: achievements the government likes to point to in health, education, governance, and communications, could have been achieved at a fraction of the cost, they say.

Now, with the release of the first Donor Financial Review (DFR) by the Ministry of Finance, some basic facts and figures are finally available.

How much?

Donors spent US$36 billion in Afghanistan in 2001-2009 out of a total of $62 billion pledged in grants and loans, according to the DFR.

Among the dozens of donors, Sweden came out top in terms of covering the gap between commitment and action - translating 90 percent of its pledges into concrete funding, followed by the UK and the USA, while the Asian Development Bank ranked last at 60 percent.

The USA has been the single largest donor to Afghanistan over the past eight years, disbursing US$23.417 billion.

Compared with?

Over the past five years per capita donor aid has been $1,241 - far less than the amount spent in Iraq and Bosnia, according to the DFR, despite Afghanistan having some of the worst poverty and vulnerability indicators in the world.

Low aid absorption capacity has also been cited as a reason why more aid has not reached the vulnerable in Afghanistan, experts say.

But the quality of aid is an important issue: “The priority is not necessarily on increasing the volume of aid, but on making sure it is spent effectively and has a positive outcome for Afghans,” Ashley Jackson, Oxfam’s head of policy and advocacy in Afghanistan, told IRIN.

Who controls spending?

President Hamid Karzai’s government has been pilloried over allegations of endemic corruption, ineptitude and the mismanagement of aid, but it disbursed only 23 percent of foreign grants (about $8 billion).

Over $29 billion (77 percent of the total disbursed aid) was directly spent by donors with little or no government input; more than $15 of the $29 billion was disbursed directly by foreign military channels, according to the DFR.

This includes the Commanders Emergency Response Programme - where senior officers in the field have access to cash for tactical spending - and the Provincial Reconstruction Funds, which "aims to win ‘hearts and minds’,” said Oxfam’s Jackson.

Mark Ward, special adviser on development to the UN’s top envoy in Afghanistan, said donors have funded their own projects because the government has not produced enough well designed national programmes.

“The donors' projects are often not designed closely with the Afghan government and may reflect domestic priorities, not Afghan priorities,” he told IRIN.

During an international conference in London in January 2010 donors supported the government’s ambition to disburse 50 percent of total development aid by 2012.

Spending on what?

Over half of the total disbursed assistance in 2002-2009 (about $19 billion) was spent on the security sector, particularly on strengthening the police and army, the DFR figures show.

Health received 6 percent, education and culture 9 percent and agriculture and rural development got 18 percent of the total $36 billion aid.

“Investments in the security sector are very important because it is hard to support improvements in governance and development if the environment is insecure,” said Ward.

Improved security is welcomed by aid agencies but they also emphasize that poverty alleviation, genuine development and good governance must not be sidelined by an overemphasis on counter-insurgency objectives.

Money went where?

The UN Assistance Mission in Afghanistan and some aid agencies have often argued that relatively little funding has been targeted at the more stable central and northern provinces. But the DFR presents a different picture, with the following amounts spent in the regions (figures in billions of US dollars):

5.2 in the central provinces
1.7 in the north
1.6 in the northeast
1.4 in the east
1.3 in the west
1.2 in the south
0.9 in southwest

Disclaimer:This material comes to you via IRIN, the humanitarian news and analysis service of the UN Office for the Coordination of Humanitarian Affairs. The opinions expressed do not necessarily reflect those of the United Nations or its Member States.
Photo: Copyright IRIN

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