The Issue of Aid

I think I might write something more formal about this, because it’s a such huge issue and barely ever discussed. One of the themes I’ve seen and noted but not really explored much in depth has been the misuse of foreign aid in Afghanistan. The issue of foreign aid is one part of what I’ve taken to calling the Golden Triangle of Failure: security, aid, and opium. They influence each other, and must be improved in tandem if the country is to have any hope of ever emerging from the violence. I have explored at some length how NATO and ISAF and the U.S. are all bungling the security side of things (too few troops, to little flexibility), as well as how the Karzai government, with American and British backing, has been bumbling the opium side of things (eradication and interdiction are failing miserably), but I’ve barely touched on the issue of aid.

Part of that is complexity—to really dig through what’s going on requires a tremendous amount of time, and access to occasionally proprietary databases (mostly scholarly journal archives, but sometimes repositories of raw data), something I had while still in college but not so much now that I have a day job. Another part is its sheer overwhelming-ness: just trying to figure out the security and opium aspects, which I have done at best in a peripheral fashion here, takes a lot of work. Nevertheless, since the issue of foreign aid is often left unspoken yet so vital, I need to try to at least establish a rudimentary framework for examining it in more depth.

First, an overview of what the situation looks like on the ground. Those privincial reconstruction teams I mentioned back in January are set to receive a brand new, huge infusion of cash, to the tune of about $8 billion. This sounds like a fantastic idea, since development to fill in the voids left behind by the fighting has been less than forthcoming from the various NATO countries.

The idea, however, is a terrible one. Afghanistan’s finances are a mess: while it posts growth rates around 10% year after year, and while macro-finance development has been positive (including currency reform and the development of a fairly stable if rudimentary banking sector), it remains a mess. In December of 2005, the World Bank Published one of its massive reports on the tenuous state of Afghanistan’s financial state: domestic revenue was only about 5% of GDP, and the entire fiscal deficit was financed by foreign sources. Making matters worse, only 30% of spending happened outside of Kabul. It was lopsided, and still is—the lion’s share of spending happens in the capital, in an attempt to beef up the capital where most of the foreigners live.

The big problem when it comes to Afghanistan’s finances is what is called the “external economy,” or money spent by foreign agencies outside the control or supervision of Kabul. While the agencies themselves are not nefarious, and their efforts are for the most part desperately needed, the lack of direct connection with and through Kabul undermines the central government’s credibility, highlighting its inability to provide for its own citizens.

One of the biggest sources of funding is the World Bank’s Afghanistan Reconstruction Trust Fund, or ARTF. It essentially funds the entire government, literally placing Karzai’s government at the mercy of foreigners. Why is this a problem?

Put simply: service providers. Unless and until the government is the primary provider of services, it will not be seen as legitimate. In a “normal” country, there is a fairly simple relationship between citizen and state: taxes pay for government services, whatever form either may take. In Afghanistan, there is a third player involved: the NGO. Sometimes at the same time and within the same agency, NGOs are involved in both providing services and acting as oversight on the government, usurping much of the roles citizens and government traditionally play. In a sense, NGOs have formed a quasi-state within Afghanistan, as citizens are often as likely to go to an NGO for needs as they are the government.

This has come to seriously bite NATO. In the midst of a renewed campaign against girls’ schools, a Taliban-affiliated religious leader said something very worrisome:

A decree issued last week by Mufti Khalid Shah, a religious leader, said: “All these NGOs are working on the agenda of Zionists; it is a duty of every Muslim to destroy their offices, attack their vehicles and to kill its members.”

He added: “It is permissible to use weapons of mass destruction against these -infidels.”

This is a very bad thing, since NGOs are a primary service provider in the country. The locals are starting to see NGOs not as good agencies looking out for them, but as foreigners (“Zionist” is one of the worst slurs a Muslim cleric can hurl). It also demonstrates another worrisome trend: the politicization of aid. This has been known for years: David Bosco reported in 2004 that Médicins Sans Frontières had left the country because of this politicization (though, at the time, I doubted their motives, in hindsight I think he was right). Here’s what Bosco said:

And that leads to what may be the more important reason for MSF’s departure: the perception that humanitarian aid is being politicized in Afghanistan. MSF stated that “the violence directed against humanitarian aid workers has come in a context in which the U.S.-backed coalition has consistently sought to use humanitarian aid to build support for its military and political ambitions.” For months, aid workers here have complained that the military is encroaching onto their territory and blurring the line between military and humanitarian action.

Particularly nettlesome are the Provincial Reconstruction Teams that the United States, Britain, and NATO have established. These teams blend security and reconstruction work in a way that is troubling to humanitarian purists. But it’s not just the PRTs; it’s also the SUVs: Some coalition soldiers have taken to driving around the country in white Toyota Land Cruisers, aid agencies’ vehicle of choice. It’s a practice I never witnessed in the Balkans, and the humanitarian community’s discomfort is understandable.

And then there were the leaflets. Apparently, U.S. forces dropped flyers in the southern town of Spin Boldak suggesting that humanitarian aid might not continue unless the population helped turn over opposition forces.

Much of this speaks to laziness on the Coalition’s part: a refusal to understand how the humanitarian industry traditionally works, and to accommodate that. But it also speaks volumes of the basic complication of the mission: NATO is working so closely with USAID, the two are nearly indistinguishable, and those PRTs are often seem as extensions of NATO, rather than civilian teams. As such, unarmed groups of civilian engineers building a road or repairing a dam work closely with their NATO security providers, making the two forces essentially indistinguishable.

All of these teams are working outside the direct supervision of Kabul, and though in recent weeks the government has been asserting more control, there is still a basic problem of oversight.

This consolidation into Kabul needs to happen faster. While there are obvious practical considerations to channeling so much foreign aid through Kabul that the government’s budget balloons beyond its ability to control and manage properly, the transition toward that very end state must begin now. It should have begun before 2003 when the initial batch of aid packages were lined up. The presence of non-government aid workers is a daily reminder that the government has no power, and therefore the locals have no compelling reason to assign the government legitimacy.

While this should be the ultimate end state of any use of humanitarian NGOs, in Afghanistan the problem is particularly acute, as the government has never really had solid control over the country. For centuries Afghanistan has been loosely held together more by its boundaries with its much more stable neighbors than the occasional strongmen who asserted rule for a few short decades here and there. Establishing a legitimate, strong, central government must be a priority for Afghanistan’s long-term survival.

As I said at the very beginning, aid cannot be examined outside the contexts of security and opium. Indeed, the ideas behind aid should be tied very closely to the problem of opium, especially if a non-eradication method, such as the subsidization or direct funding of alternative crops like orchards and large-scale farms, is to be tried. Similarly, all the reconstruction projects and community development won’t come to mean much if the Taliban cannot be held at bay by an effective security presence.

In a way, Afghanistan is lucky: since there were no institutions to speak of, the country offered a perfect chance to build them from the ground up, according to solid macroeconomic principles. And that kind of development has gone as well as could be expected. It is on the microeconomic level, the individual transactions between individuals, where development has fallen critically short. In this context, new news about increasing microfinance are encouraging—the process has been used to great effect in other poor Muslim countries like Bangladesh.

But there is a long, long way to go. Having never really had a central government, Afghanistan is unique—there is no by-default state, even a new one. Most other countries where NGOs operate have a central government to work with or toward. Here, NGOs had to take over virtually all elements of government while one was built, a process that takes many years. While things are slowly shifting toward Kabul taking the reigns, even if it results in bad policy like the new eradication campaign, they can not happen fast enough. Government really is the answer here.

The question isn’t whether or not the NGOs and foreign aid should remain: most introduce expertise and resources Kabul can’t even theoretically produce for decades. The issue is how that aid is structured, and the context in which those NGOs operate. They need to subordinate themselves to the central government, and through that deliberate budgetary allocation establish and solidify the legitimacy of Kabul. That is how the basic foundation of a functional country is build.

This post was written by...

Joshua Foust – author of 1801 posts on Registan.net.

Joshua Foust is a Fellow at the American Security Project and the author of Afghanistan Journal: Selections from Registan.net. His research focuses primarily on Central and South Asia. Joshua is a correspondent for The Atlantic and a columnist for PBS Need to Know. Joshua appears regularly on the BBC World News, Aljazeera, and international public radio. Joshua is also a regular contributor to Foreign Policy’s AfPak Channel, and his writing has appeared in the New York Times, Reuters, and the Christian Science Monitor. Follow him on twitter: @joshuafoust

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