A 2010 Afghanistan country level evaluation noted that while the volume
of aid needs to increase to achieve development goals, the effectiveness of
'how' aid is delivered must also improve significantly.
Thus, with large amounts of development aid going to Afghanistan, it is
imperative that the funds are directed to where they are most needed and to
maximise the benefits to the Afghan people.
Before assessing Australia's contribution to the stabilisation and
reconstruction of Afghanistan, the committee looks at the particular
difficulties that donor countries, including Australia, face in their efforts
to help the Afghan people rebuild their country and livelihoods. In this
chapter, the committee considers the obstacles to delivering development
assistance in Afghanistan in order to better appreciate what is needed to
ensure that Australia's aid to that country is effective.
Impediments to aid effectiveness in Afghanistan
Afghanistan presents a most difficult, complex and challenging environment
for those seeking to provide development assistance.
Some of these features, such as the country's terrain and climate, are fixed,
others including social structures and behaviours can be changed or improved to
help in the effective delivery of development assistance.
The country's harsh physical environment makes it hard for donors to
deliver aid effectively. The rugged terrain, severe climate of extreme aridity
and cold and the poor state of the roads create challenges for those delivering
assistance, especially to remote regions of the country.
With four-fifths of the population living in rural and remote areas, the scope
for economic development is limited. Destructive events, such as floods, droughts,
earthquakes, avalanches, landslides and mudflows frustrate the efforts of many
Afghans attempting to rebuild their country and of those helping them to
recover from the devastation of war and natural disasters. For example, from 1
June to 31 July 2012, the UN recorded 58 natural disasters in 57 districts,
affecting 31,783 people, causing 116 deaths and destroying 2,046 homes.
Magnitude of destruction and
Not only does the physical environment create difficulties for
rebuilding the nation, but the extent of devastation caused by years of civil
war means that Afghans have a long and arduous road ahead if they are to lift
themselves out of poverty and meet their basic needs. Indeed, Afghanistan is
one of the world's least developed countries and the task of reconstruction was
and remains formidable.
As described earlier, the years of conflict and neglect left much of
Afghanistan a devastated land.
The loss of life, the sheer number of displaced persons, the widespread
infrastructural damage, the substantial collapse of state institutions and civil
structures and continuing insecurity which impedes development progress present
clear evidence of the magnitude of effort required for recovery and
Moreover, development indicators including life expectancy, infant
mortality and literacy rates are some of the worst in the world. Afghanistan
has one of lowest life expectancy at birth of 48 years, though indicators
suggest that this is improving.
It has one of the highest maternal mortality rates in the world with 1 out of
every 11 women dying from a complication related to pregnancy or childbirth.
The situation is extremely poor for young children as Afghanistan had
the second highest under-5 mortality rate in the world with around one in five
children dying before they reached their fifth birthday.
Although this rate has now fallen to 1 in 10, it remains one of the highest in
The country also has high rates of stunting which is primarily caused by the
mother's poor nutrition during pregnancy and recurring episodes of infectious
diseases during a child's early life. Thirty-six per cent of the population
live below the national poverty line with 'more than half vulnerable and at
serious risk of falling into poverty'.
Forty-five per cent of Afghanistan's population of 26.59 million experience
food poverty and almost three-quarters of the population are illiterate.
Despite a decade of concerted effort by the Afghan Government together
with the international donor community, Afghanistan still faces an enormous
task if it is to improve the overall wellbeing of its people.
Foreign aid is a major and vital contributor to Afghanistan's economic growth
Afghanistan is not only one of the world's largest aid recipients; it is also
one of the most aid dependent.
Moreover, a 2012 World Bank report noted that Afghanistan's aid dependency has
'soared since 2001'.
According to Professor Stephen Howes and Mr Jonathan Pryke, Development
Policy Centre, ANU, Afghanistan now 'receives much more aid than any other
country in the world with a level of aid almost double (80 per cent more than)
that of the next biggest aid recipient, the Democratic Republic of Congo'.
The Asian Development Bank (ADB) suggested that the amount of aid going to
Afghanistan is 'almost unique' with only a few smaller entities, such as
Liberia and the West Bank and Gaza, having on occasion received more aid per
It estimated that external support accounts for 82 per cent of total public
spending—including central government and off-budget spending channelled
directly to government line agencies.
Civilian aid is estimated at more than $6 billion a year, or nearly 40 per cent
of GDP. Overall, in 2011–2012, bilateral donors committed US$8.391 billion and
multilateral donors US$815 million.
OECD figures record that Afghanistan received US$6.426 billion net ODA in 2010
and US$6.711 billion in 2011.
The Afghan Government recognises that reconstruction is not possible
without 'the strong support' of the international community and despite
developing its own national development strategy, lacks the ability to finance
its development priorities with its limited resources.
A number of witnesses suggested that Afghanistan's reliance on foreign
aid at this stage of its recovery should be seen as part of a necessary process
to self-sufficiency. Mr John de Groot, Caritas Australia, viewed aid dependency
in Afghanistan as 'an unsurprising reality given the level of devastation in
the country at all sorts of levels and the sense of fear and disempowerment'.
Mr Peter Leahy, CARE Australia, also noted that dependency was to be expected
for some period. He warned, however, of the need for Afghan institutions and
their capacities to develop, which, according to Mr Leahy, have to be grown in
part by the Afghans themselves:
We need to create spaces for that to occur, not smother it by
trying to go in and do everything on their behalf.
Thus, Afghanistan's dependence on external assistance to deliver even
basic services creates particular challenges for the donor community—providing much
needed assistance but avoiding the trap of encouraging or supporting aid
Severe capacity constraints, including low levels of education and a
chronic shortage of qualified personnel, frustrate the Afghan Government's
attempts to deliver front-line services and underscore the extent of the
country's dependence on external assistance.
Severely weakened institutional infrastructure and administrative systems
combine with widespread illiteracy and a diminished knowledge base to further
undermine the government's capacity to function effectively and absorb development
finances. Even with the large amounts of assistance, Afghanistan is struggling
to restore its bureaucratic structures and to find trained and suitable staff to
administer public programs.
Provincial and district level
All levels of government, national, provincial and district
administrations, suffer from a want of capable and skilled personnel.
For example, the 2012 TLO Profile reported that, after ten years of state
building, Afghanistan's formal justice institutions remained weak, including in
Based on a small survey of government officials in Tarin Kowt, the TLO found
all the sampled departments, except the Department of Public Health, reported a
lack of essential staff.
AusAID also noted that illiteracy was common amongst provincial officials in
Uruzgan and that their ranks were severely depleted.
Private sector and civil society
The private sector has not been spared the damaging effects of
decades of conflict and instability and must also rebuild if it is to help the
economy recover, generate jobs and lift living standards. AusAID's Minister
Counsellor at the Australian Embassy in Kabul, Mr Paul Lehmann, observed that while
there had been progress in reviving the private sector, it had been incremental
and driven largely by the economic activity associated with the security
infrastructure and the presence of military and development missions. Afghanistan's civil society, including its
local community groups and NGOs, which also have an important role in
delivering development assistance, similarly suffer from a lack of qualified
personnel and weak institutional structures. Building capacity in Afghanistan's
public and private sectors is vital to the effective delivery of aid but will
Perceptions of corruption in Afghanistan may influence the attitudes of
donor countries and counter the effectiveness of their aid.
Transparency International's corruption perception index for 2011, which
measures the perceived level of public sector corruption, rated Afghanistan as one
of the world's worst performing countries placing it 180 out of 183 countries.
It shared this position with Myanmar ahead of only North Korea and Somalia,
which were perceived as the most corrupt.
Worryingly, in 2012 Afghanistan slipped to the last place of 174th with
a score of 8 out of 100 and sharing this position with North Korea and Somalia.
There are sound reasons for Afghanistan's poor ranking. A report by the
United Nations Office on Drugs and Crime indicated that corruption is both wide
and deep throughout the whole public sector in Afghanistan including key
government institutions such as law enforcement as well as local authorities
and service providers.
Moreover, Afghans themselves recognise that corruption, nepotism within
institutions and warlordism in some parts of Afghanistan damage the authority
of institutions and impede economic development. A policy note from the Afghanistan
Research and Evaluation Unit, stated bluntly that most delivery processes were
'plagued by high levels of corruption'.
While acknowledging the improving levels of skills in the local police
and military, an ACFID study cited corruption in the ANA and ANP as a primary
According to the study's author, Mr Phil Sparrow, provincial coverage and lack
of data on how many personnel there are in the ANA or ANP undermines
transparency and accountability. For example, he noted that the official number
of police in Uruzgan was 1,319, but approximately 1,650 were paid. 
The recent Afghan People's Dialogue on Peace found that people
from all parts of the country expressed their anger consistently at the level
of corruption, which they believed denied them critical infrastructure and
services. It stated that people cited corruption among public officials as the
main reason for the lack of progress and the poverty of many Afghans.
A 2012 survey of the Afghan people similarly found that the majority of Afghans
thought that corruption was 'a major problem in all facets of life and at all
levels of government'. It concluded:
Perceptions that corruption is a major problem in Afghanistan
as a whole and at the provincial level are at their highest points since 2006,
and perceptions that corruption is a major problem at the level of local
authorities and the neighbourhood, too, have been steadily rising.
Afghanistan's President Hamid Karzai acknowledges that corruption is 'a
menace that has undermined the effectiveness, cohesion and legitimacy' of
As a donor country committed to working with the Afghan Government, this
long-standing problem of corruption is particularly significant for Australia. Witnesses
to the committee's inquiry also raised concerns about the level and type of
corruption existing in Afghanistan. For example, Professor William Maley, who
has published extensively on Afghanistan, noted that providing aid may have the
unintended consequence of 'fuelling corruption'.
He explained that this situation could arise all too easily in Afghanistan:
...where substantial aid monies flowing into a complex
bureaucratic environment set the scene for the payment of bribes by contractors
and sub-contractors as a means of lubricating the process of policy
Recognising the prevalence of corruption in the government, Dr Nematullah
Bizhan, a research scholar at the Australian National University, was
particularly concerned about the inefficient use of funds channelled to
projects outside the government system and their greater susceptibility to corruption.
...massive corruption has been reported through off-budget
mechanisms because there is no proper reporting and monitoring in place.
Notably, Uruzgan is recognised as having high levels of corruption,
which is particularly relevant for Australia with its considerable involvement
in the province.
For example, the 2009 TLO report on government capacity in Uruzgan referred to
widespread incompetence and corruption, weak capacity and significant lack of
Three years later, the 2012 TLO Provincial Profile of Uruzgan reported that
corruption remained endemic throughout government:
Most NGOs saw government corruption or bribes demanded from
powerbrokers as one of the single largest sources of waste in the sector. One
local NGO representative openly admitted to bribing government officials to
ensure monitoring of their projects was actually conducted. The representative,
echoing numerous other interviews, alleged that bribery is widespread in the
province and that organizations often have no choice if they want to continue
to operate and access full government support, or not be disrupted by local
power politics. 'Corruption is like a virus', he noted, 'everyone is affected'.
AusAID acknowledged that 'corruption compounds the capacity constraints
that already exist'.
Clearly, donor countries such as Australia must find ways to counter the
negative effect that corruption can have on the effectiveness of their aid.
Centralised government, loyalties
The highly centralised nature of public administration in Afghanistan with
weak links to remote provincial and district government institutions also
impedes the effective delivery of aid. In Professor Maley's view, the highly
centralised state with its presidential system presented a 'most significant
problem'. He noted:
The Afghan state is diversified in the sense that there are
provincial governors and then there are people known as wuleswals, who are
sometimes called district governors but they are more administrators. These are
not people who have come from local communities. They are centrally appointed
from Kabul through what is called the Independent Directorate of Local
Governance. They are creatures of the central state in districts, rather than
legitimate local actors.
Professor Maley also observed that the centrally appointed officials had
little interest in building organic relations with the local population and, if
they did, were more likely to pursue future political agendas than ensure that
development projects were implemented effectively.
He noted further that the requirement to refer matters to Kabul for decisions
on a wide range of personnel and financial issues has had a 'profoundly
stultifying effect' on administration. In his view, this level of central
control was one of the reasons for a large amount of aid entering Afghanistan,
estimated at 77 per cent between 2002 and 2009, bypassing the state altogether
and going directly to UN agencies, NGOs or private contractors.
According to Professor Maley, this system of administration creates real
difficulty in matching the needs of the local population with what the officials
may be attempting to do. He explained that this disconnect may occur because there
is no requirement for officials, even at the local level, to engage or consult
with those who are to be assisted through aid projects.
Mr Pallassana Vaidyanatha Sarma Krishnan, Country Director, Afghanistan,
ActionAid, likewise noted that most aid programs were centred in the capital
and support did not percolate down to communities on the ground.
He argued that, unless there was a strong connection between the local people
and the national level, development gains could not be sustained. He stated:
This sustainment can happen only when it is rooted in the
grassroots and the ownership happens at the grassroots level, not at the top
level. So we surely do not advocate a top-heavy approach or a top-down
approach; it has to be a bottom-up approach and development.
Dr Bizhan made a similar observation about the extremely centralised
government in Afghanistan, noting that even for minor matters approval was
required from Kabul, where most public servants were located. In his view, the
government was in a dysfunctional state and the degree of central control was a
major constraint and challenge in Afghanistan.
He also observed that the President appointed the governors.
Security remains critical to the effective delivery of aid. Since 2005–2006,
however, a resurgent Taliban have continued to sabotage efforts to stabilize
the country and keep it on the path to recovery.
In 2007, the UN Secretary-General spoke of 'an insurgency emboldened by their
strategic successes, rather than disheartened by tactical failures'.
Indeed, the former Australian Chief of the Defence Force looked back on 2006 as
the year when the Taliban gathered strength. He stated:
The Taliban were chased out of Afghanistan in very short
order in 2001–02. NATO were then given the job of stabilising Afghanistan and
for two or three years they conducted a stabilisation operation in various
parts of Afghanistan. The Taliban were not very active. There was the odd
attack but not many and then in 2006 we started to see the Taliban insurgency
gain momentum. It has gained momentum each year since and what we have seen
each year is a marked increase in the number of violent incidents.
Although ISAF has expanded its areas of operation into southern and
eastern parts of Afghanistan and Member States continue to contribute
personnel, equipment and other resources toward making Afghanistan a safe
place, the insurgency has remained stubbornly resilient.
Conflict and the continuing hostilities are critical barriers to the effective
delivery of aid. The broader insurgency environment is complicated by local
power plays and patronage networks.
Local patronage network
The donor community must also work in a country that is divided into
numerous ethnic groups including Pashtuns, Tajiks, Hazaras and Uzbeks and in
communities where a web of informal power relations can exert considerable
influence outside the central government. History shows that these informal
power structures and deeply entrenched patronage links based on ethnic or
tribal alliances or around former mujahedeen commanders have been important in
shaping Afghan political, social and economic dynamics.
Evidence strongly suggests that these networks continue to play into every
facet of Afghan society and donors cannot ignore their presence or influence.
For example, the 2010 TLO report noted that the continuing tensions
between pro-government strongmen, former Taliban and marginalised tribal
leaders combined with tribal/community divisions over power and leadership to
create a very complex political dynamic. In this environment, parties to the
conflict opted to align either with the government or the insurgency.
According to the more recent 2012 TLO report, it was important to appreciate
that existing tribal and ethnic divisions were often stoked or exploited by
local powerbrokers in order to expand their personal power.
These inter-tribal and inter-ethnic clashes, which often centred on the
disputes of prominent strongmen, remained a source of instability that
sometimes overlapped into the broader conflict between the government and
Professor Maley pointed out that aid activities are politically sensitive
because they can 'create losers as well as winners'.
There are numerous other domestic influences that create difficulties
for the effective delivery of aid to Afghanistan including the country's
dependency on opium production and discrimination against women and girls. (They
are discussed in detail in Part III of the report.) Generally, the numerous
domestic obstacles to the effective delivery of aid combine or feed into one
another to compound the task of providing assistance. Overall, AusAID
recognised that the risks of working in Afghanistan were high and that a range
of factors constrained development efforts.
Corruption, insecurity and low government capacity all pose
serious challenges to the design, delivery and monitoring of aid activities.
DFAT similarly acknowledged that Afghanistan would be 'beset by
security, governance and development challenges for decades to come'.
Afghanistan presents a most difficult and challenging environment in
which to deliver aid. The committee has referred to the physical features of
the country—the remoteness of some areas and the prevalence of natural
disasters such as drought and landslides. It has noted the sheer magnitude of
the development problems, the lack of infrastructure, capacity constraints within
government to deliver services including at the sub-national level, corruption
Whereas Afghanistan itself presents considerable impediments to the
effective delivery of development assistance, the actions of international
donors may also lead to inefficiencies when providing aid. In the following section,
the committee looks at the behaviours of international donors that can lead to
funds being wasted, misdirected, poorly targeted, or of limited benefit and at
the internationally accepted principles intended to counter such activities.
Achieving aid effectiveness
While sections of the Afghanistan population call on the international community
for more aid they are also asking for 'more effective aid for humanitarian,
reconstruction and development activities throughout the country'.
They want overseas donors not only to commit more aid but to deliver aid more
A study sponsored by a number of NGOs found that:
Many individuals felt that though much had been promised to
the Afghan people, little had actually been delivered—creating frustration and
disillusionment and ultimately undermining stability. In particular individuals
called for better measures to ensure that economic development and aid reach
those who need it the most.
Indeed in 2009, the UN Secretary-General welcomed the surge in attention
and resources that Afghanistan had received in recent months. He added,
however, that the lessons to be drawn from the past seven years demonstrated
that increased aid of itself would not suffice: that resources must be used 'intelligently,
according to a coordinated and comprehensive plan' with the aim of enabling all
Afghans to bear responsibility for their future.
In this regard, the international community has long been interested in
increasing the effectiveness of aid delivered to Afghanistan. Since 2002,
numerous international conferences have endeavoured to identify ways for the
improved delivery of aid and for the international community to commit to
adopting these practices. Although not part of this series of conferences, the
Paris Declaration in 2005 stands out as a major landmark for international
development assistance, which influenced the thinking at the subsequent
meetings on Afghanistan. As noted in the previous chapter, the 2005 Paris
Declaration enunciates five fundamental principles underpinning aid
effectiveness to which donor countries are expected to adhere—ownership by
partner country; alignment and harmonisation of aid; managing aid for results; and
Consistent with these principles, the numerous international conferences
on Afghanistan have from the beginning placed a heavy emphasis on Afghanistan's
ownership of aid projects, aligning projects with the government's priorities
as set down in the ANDS, avoiding parallel structures, better coordination
between donors and improved transparency and accountability.
The committee now looks in greater depth at the extent to which these
principles apply in Afghanistan.
The importance of donors channelling a substantial proportion of aid
through Afghanistan's national budget was a constant refrain coming out of the
international conferences. By using its systems, the Afghan government would
have ownership over development assistance—a key principle of aid
Evidence indicated, however, that one of the main causes of the
ineffectiveness of aid to Afghanistan stemmed from funding that operated
outside the national government system.
A Ministry of Finance joint evaluation found that many donors, without properly
consulting with the Afghan Government, continued to invest in programs designed
and implemented directly by the donor country and delivered by their contracted
agencies. According to the evaluation, because the government has no control
over the financing or accountability of these donor-driven programs, Afghan
ownership of such programs, comprising close to 80 per cent of Afghanistan's
development budget, is yet to be established.
Witnesses also drew attention to the high proportion of international
assistance to Afghanistan channelled through off-budget mechanisms, which
bypassed the state mechanisms. Dr Bizhan indicated that some donors were
directly funding projects without proper consultation with the government or
local communities. Within that context, he identified a couple of challenges that
emerge, including the sustainability of those projects. He noted clinics and
schools that were built, but with no teachers or nurses or doctors to sustain
their use and local demands on the government to provide funds to maintain the
facilities but without the resources to do so.
Community involvement in decision-making and the implementation of
development projects is also an important component of ownership, critical to
aid effectiveness. Mr Rahatullah Naeem, Afghan Development Association, noted
that by using local partners, donors can develop the community's capacity and
implement programs efficiently and effectively as compared to other approaches.
He observed that by engaging local people, the communities feel ownership in
the development activities and, therefore, 'provide full security and
protection to the staff and programs'.
Mr James McMurchy also referred to well-intentioned aid that, because of
lack of consultation with the local community, has led to inappropriately
designed or located projects or even development assistance that has caused
local family or tribal disputes over land and water rights.
Mr Krishnan, ActionAid, noted that the current development priorities for
Afghanistan by the donors miss one very vital component: 'the community
There needs to be community involvement, community ownership
and community participation, otherwise development remains as structures only.
He suggested that this lack of community engagement in Afghanistan was why
schools were built but with no children in them; hospitals opened but nobody uses
them; and roads constructed but no one is able to travel between provinces. In
his view, 'It is simply because the community is not yet accepting of or
involved in this progress that that is happening in the country'.
He informed the committee the donors need to reach out to more communities and
'to ensure that people, civil society and other stakeholders are each equally
informed and involved in the development work in Afghanistan'.
Alignment and matching priorities
The Paris Declaration recognised the importance of aligning aid with the
priorities of the recipient country. A number of witnesses were concerned that
aid projects did not support the priorities of Afghanistan and local
communities. A number of reports indicated that the stated goals and objectives
of various aid agencies, donor governments and the Afghan Government do not
align. For example, the Office of the United Nations Population Fund in
Afghanistan reported on the 'need for better alignment of efforts and resources
of all government and non-government, Afghan and international partners'. It
noted that 'a unified vision dictates combined efforts, resulting in peace and
development in the country.'
An Oxfam study referred to this mismatch between the work of donors and
Afghanistan's needs. It stated:
The emphasis of many donors' strategies on quick impact
projects and the use of expensive consultants must be revaluated and redirected
to meet Afghan needs, particularly the creation of income generation
opportunities, and address the underlying causes of poverty.
According to one witness, the misalignment of a donor's stated
objectives with those of the Afghan government was 'certainly the case with Australian
Many donors contribute to development in Afghanistan. The Paris
Declaration highlights the importance of harmonisation and ensuring that aid
projects complement each other. With regard to Afghanistan, an Oxfam study
The lack of coordination and overall effectiveness of aid is
a complex problem, but one that must be urgently addressed as it has undermined
reconstruction efforts and created mistrust among many Afghans. 
Dr Bizhan also cited the problem of coordination, notably with funding that
does not go through the Afghan Government.
Managing for results
While acknowledging improvements in Afghanistan, an Oxfam study found
that not only had the volume of aid to Afghanistan been insufficient but much
of it had been delivered in ineffective or wasteful ways. It stated that
'nearly 40% of all aid since 2001 has returned to donor countries in the form
of profits or remuneration', with a large share of aid failing to reach the
poorest in Afghanistan.
Afghans were also of the view that aid does not always reach its
intended beneficiaries. A majority of participants in the 2011 Afghan
People's Dialogue on Peace reported that despite some clear improvements,
achievements had 'not been equal to the billions of dollars in donor aid that
has been spent in the last ten years'. The Dialogue found:
Men and women all over the country stressed that progress
should not be measured in terms of the quantity of services, such as the number
of schools and hospitals built, but should also be based on the quality of
these critical services, which many people said was far from satisfactory.
The 2012 TLO Report on Uruzgan noted that regardless of the underlying
reasons, community members and NGO representatives continuously cited 'waste,
dependency, tribal rivalries, and the lack of management oversight as chronic
issues hampering infrastructure development'.
It noted local frustration and disappointment with assistance due to:
- high salaries of foreign contractors and development personnel,
especially when project implementation is substandard;
- preference for large development contractors which translated
into ever-increasing number of sub-contractors, with funds disappearing into
each new sub-contract;
- staff recruited from other areas—a long-standing grievance,
though NGOs indicated that they try to hire locally but there are simply not
enough Uruzganis available with the required skill sets; and
- failure to match facility construction with adequate management
capacity and to consider sustainability including sequencing (for example, the
sewage treatment plant built on the outskirts of Tarin Kowt, which although described
as 'beautifully constructed' was not operational because of the lack of
adequately trained local staff to manage the facility).
The report also cited respondents concerns about waste or inefficiencies
due to the need to provide security to guard against insurgent attacks, looting
of construction sites and, as mentioned before, corruption.
Witnesses supported this view of failing to manage for results.
Professor Maley cited reports from many parts of Afghanistan of unsettling
complaints that aid monies were being 'wastefully pumped' into conflict zones,
leaving residents of the more stable areas of Afghanistan frustrated onlookers.
He also referred to the leakage of funds due to a reliance on contractors,
which he regarded as one of the most serious problems, and drew attention to
the way in which funds:
...nominally hypothecated for the benefit of Afghans have ended
up going to consultants who have not necessarily added an enormous amount of
value but have charged significant prices for what it is that they have done
The suggestion is that 'money ends up in bank accounts in Washington DC,
in Paris, in Berlin and or in London, in places like that, rather than in
An independent journalist who visited Afghanistan in 2012, Mr Antony Loewenstein,
was similarly concerned about the over reliance on foreign workers at the
expense of local interests and the leakage of funds whereby contracts were
awarded to NGOs. He argued that:
...often the vast bulk of that money does not go to the local
people. It is going to foreign contractors who are taking the money out of the
country. In other words, local groups are not being empowered.
Consistent with this perception, Dr Bizhan observed that much of the
international spending had been spent outside the country or has left the
country through imports, expatriated profits and outward remittances.
He referred to a report prepared jointly by a concerned group of donors, international
and local organisations in Afghanistan. It found that money directed off budget
was going to persons who were leaving the country, toward ex-patriots' salaries
and for conditions attached to foreign aid. Dr Bizhan cited the reported
observations of a former finance minister, Dr Ashraf Ghani, who indicated
that 'for $1 of foreign aid which donors spend in Afghanistan, only 10 per cent
goes to real beneficiaries'. He explained:
The big international companies get a contract and then they
subcontract that—and there is a huge amount of subcontracting—so in each
transaction they deduct a certain amount of money for overhead costs. So
finally, the real amount of money decreases so that a very small amount of it
goes to real beneficiaries.
Generally, the factors working against effective aid are linked and
combine to make the task even more difficult. A recent World Bank report noted
that although the large aid flows had benefitted Afghanistan, it had also
brought problems tied to corruption, fragmented and parallel delivery systems,
poor aid effectiveness, and weakened governance.
Based on her research, Ms Lydia Khalil noted that while the ravages of decades
of war had left a legacy difficult to overcome, the mismanagement of
development assistance, the misalignment of priorities, waste and corruption
were serious and endemic problems.
Referring to an International Crisis Group report, she noted:
Poor planning and oversight have affected projects'
effectiveness and sustainability, with local authorities lacking the means to
keep projects running, layers of subcontractors reducing the amounts that reach
the ground and aid delivery further undermined by corruption in Kabul and
bribes paid to insurgent groups to ensure security for development projects.
Professor Howes and Mr Pryke noted that the slow pace of reconstruction,
poor project design, perceptions of corruption, and lack of local ownership
undermined positive perceptions of aid. For example, they cited Uruzgan, as a
province producing ample evidence of the destabilising effects of aid projects.
According to their research, aid was perceived 'to be poorly distributed, highly
corrupt and benefitting mainly the dominant powerholders'.
Donors also cited factors such as staff turnaround that interferes with
the effective delivery of aid. For example, the USAID Mission to Afghanistan
has experienced high staff turnover coupled with multi rest and recuperation
breaks which limited the development of expertise, contributed to a lack of
continuity and overall hindered program oversight.
The challenges confronting Afghanistan are formidable and the
constraints on delivering aid—insecurity, political instability, perceptions of
corruption, capacity weaknesses—make the task of ensuring that aid is effective
far more difficult. As part of the donor community, Australia must contend with
the range of domestic circumstances in Afghanistan that have the potential to
undermine the effectiveness of its aid to that country.
The committee also drew attention to a number of major criticisms
levelled at the international donor community that undermines the effectiveness
of aid. They include poor coordination between donors and funding that operates
outside the national system, which does not promote Afghan ownership or align
priorities with those of the Afghan Government or local communities. There were
also concerns that aid could be wasted due to factors such as the use of
contractors and sub-contractors; the leakage of funds through imports,
expatriated profits and outward remittances or projects simply not taking
account of the running costs of sustaining a project. In this regard, it is
important for Australia to consider its own policies on development assistance
to Afghanistan and their implementation to ensure that maximum benefit is
In the following part of this report, the committee examines Australia's
performance when it comes to the effectiveness of its aid.
Navigation: Previous Page | Contents | Next Page