The Senate Foreign Relations Committee has released a damning report on Afghan reconstruction. According to the Washington Post:
The report describes the use of aid money to stabilize areas the military has cleared of Taliban fighters — a key component of the administration’s counterinsurgency strategy — as a short-term fix that provides politically pleasing results. But it says that the enormous cash flows can overwhelm and distort local culture and economies, and that there is little evidence the positive results are sustainable.
In other words, it says little new, but appears to do so in an authoritative way. The report, available on the SFRC website, offers reams of data to show why the reconstruction experiment in Afghanistan is fundamentally broken. For example, of the Kajakai dam, the terribly fraught project to bring hydropower to the south, is, according to the report, sending half of its power into Taliban-controlled areas, “enabling the Taliban to issue electric bills to consumers.”
While that’s bad, and not terribly surprising, it gets worse. On page 30 the report notes: “an estimated 97 percent of Afghanistan’s GDP is derived from spend- ing related to the international military and donor community presence.” Now, the World Bank is fond of bragging of 20% growth rates in Afghanistan’s economy—and the January SIGAR report said the biggest growth area in Afghanistan’s economy was in “services.” This probably means that the majority of “growth” in Afghanistan’s economy is due to providing services to the U.S. military and international community.
To give an idea of how unbelievable that distortion is, let’s go back to the World Bank, which supplied the SFRC with that 97% foreign donor-supported GDP number. In February of this year, they estimated that in 2008/9 Afghanistan’s GDP was about 48% supported by foreign donors—and in the interim, remember, the economy has posted growth rates very near to 20%. What might have caused such a dramatic change in the composition of Afghanistan’s GDP?
Since January of 2010, the U.S. military has spent $1.3 billion alone in Marjah, Helmand. “Foreign aid expenditures by the State Department and the U.S. Agency for International Development in Afghanistan,” the Post explains, add up to about about $320 million a month, which itself “pales beside the overall $10 billion monthly price tag for U.S. military operations.”
It is impossible to think that this extreme level of cash-dumping has not had pernicious effects on Afghans. And, since so little of that money has gone toward building the fundamentals of a healthy economy—one in which it is relatively easy to start or expand a company, where taxes and laws are explicit and predictable and enforced, where goods can be moved with relatively little hassle and so on—we have no reason to expect a positive outcome from any of it.