Aid delivery channels
As foreign troops withdraw and government revenue shrinks, one of the
key concerns with development assistance to Afghanistan is ensuring the
uninterrupted delivery of basic services currently funded by the international
community and in many cases delivered by NGOs. The lack of capacity within the
Afghan administration to deliver basic services presents donor countries with
particular challenges—selecting the right mechanisms to help fill this gap
while at the same time helping the country to become self-reliant.
Another important consideration is sustaining the achievements brought
about through aid. The committee has discussed the importance of concentrating
on critical sectors not only to maintain Afghanistan's momentum toward
development but to prevent any reversal. In this chapter, the committee continues
its consideration of the steps that Australia can take to ensure the
effectiveness of its aid to Afghanistan as the country moves toward the
transformation decade. Having considered the particular sectors Australia should
fund, the committee, in this chapter, is concerned with the mechanisms for aid
delivery—on budget systems, international NGOs and local community groups or
On budget funding
For many years now, Australia has allocated a significant portion of its
ODA directly to the Government of Afghanistan to support the ANDS using in
particular the ARTF. The fund has proven to be a successful means of delivering
assistance to Afghanistan and of strengthening the country's institutions.
Australia's focus on channelling assistance through the fund is to continue. As
noted previously, the Australian Government has undertaken to direct 50 per
cent of its aid funding to Afghanistan through national systems.
AusAID informed the committee that Australia had exceeded this target in
2011–2012 with approximately 55 per cent ($93 million) of AusAID's funding
being directed to Afghan systems. Of this sum, $92 million went through the
ARTF, which represented 54 per cent of AusAID's ODA to Afghanistan.
Australia rates highly among the donor community for the proportion of its
funding that is on budget.
Table 15.1: Achieving the 50% on-budget commitment of the
(current ratio of aid
channelled through the core budget by donor countries)
Asian Dev. Bank
Isl. Development Bank
United Arab Emirates
The majority of witnesses recognised the sound work of the ARTF and
supported Australia's commitment to boost its funding to Afghanistan's national
budget through the fund.
The committee commends the government's decision to direct 50 per cent
of its ODA through national systems and for achieving this objective. The
advantages of this arrangement include close alignment with Afghanistan's
priorities, better coordination of funds from a number of different donors and
close monitoring and evaluation of projects.
The committee recommends that the Australian Government continue to
channel a substantial proportion of its ODA (at least 50 per cent) to the
Afghanistan Reconstruction Trust Fund.
The committee also recommends that the Australian Government use its
influence with other donor countries to encourage them to abide by the Kabul communiqué and channel 50 per cent
of their ODA through the Afghan national budget.
The committee recommends further that, in light of the findings of the
recent 2012 independent review of the ARTF, the Australian Government continue
to encourage the World Bank to implement the review's recommendations.
The committee, however, notes that the government in Afghanistan is
highly centralised and the administration's capacity to deliver basic services
is severely constrained. In this regard, the National Solidarity Program (NSP) has
been particularly successful in promoting local ownership through its
community-based projects. Even so, the lack of capacity in the administration
to deliver essential services effectively remains a major obstacle now and into
the foreseeable future as Afghanistan endeavours to take charge of its own
affairs. NGOs, which have had an important place in providing development
assistance, even at times of heightened insecurity, will be a critical link in
Afghanistan's transition to self-reliance.
The committee has noted NGO's contribution in Afghanistan, particularly
their determination to remain working with communities even during the most
difficult of times. Their continuity, understanding of the communities they
serve and ability to work safely in insecure environments will be vital as Afghanistan
enters the transformation decade.
Currently, critical services such as healthcare and education are funded
almost entirely by international donors with NGOs being a vital link in the
delivery chain. According to Caritas, as a result of this investment,
considerable achievements have been made towards the MDGs and a solid
foundation for service delivery has been established. It warned, however, of
the risk that such gains would be threatened if the Afghan Government had 'no strategy
for ensuring an uninterrupted delivery of essential services to the Afghan
Caritas informed the committee that it was crucial that the donor community
supports the delivery and development of basic service provision in
well-coordinated ways both through the Afghan Government and through bilateral
partners. Mr Fernandez explained:
In order to build upon hard-won gains in health and deliver
on some of the indicators in the health MDGs...there is a need to scale up
partnership approaches, like the BPHS, that are proving to be successful.
The evidence is clear—ministries, line ministries and Afghan institutions
need to develop their capacity if they are to assume responsibility for funding
and providing basic services. Also, given the decentralised nature of
government in Afghanistan, the success of transition to Afghanistan leadership
will also depend on the capacity of local administrations to serve their
communities. Thus, stronger and endurable connections need to be established in
Afghanistan between district, provincial and federal bodies and civil society.
In this regard, the committee has noted the significant successes that have
resulted from community-based programs such as the National Solidarity Program
and the major contribution that NGOs have made in delivering education and
health services under the program. Looking to post 2014, some NGOs are likely
to continue to fill the gap in the Afghan Government's capacity to deliver
services on the ground.
Phasing out of PRTs
Through the transition period and into the transformation decade, the
role of international donors is intended to evolve from delivering services
directly to supporting and helping the Afghan Government to build the capacity
of its institutions so that it can exercise its sovereign authority in all its
This shift will 'entail the phasing out of all PRTs, as well as the dissolution
of any structures duplicating the functions and authority of the Government of
Afghanistan at the national and sub-national levels.'
The UN Secretary-General recognised that transition offered 'the chance
for significant realignments, bringing civilian agencies increasingly to the
fore'. He cautioned, however, that this change 'must be subject to careful
planning and preparation', explaining that:
Provincial reconstruction teams, for example, have provided
significant logistical and financial assistance at the sub-national level.
Their evolution must not mean the evaporation of funding and assistance for
local government, but rather the continuity of support for sustainable Afghan
systems of governance.
The Australian led PRT has continued to fund infrastructure upgrades and
carry out education and health care projects all in support of the transition. Approximately
$30 million has been spent directly in Uruzgan province where Australia
maintains a sizeable troop presence.
As noted earlier, approximately 20 per cent of AusAID’s program to Afghanistan would
be directly focused on Uruzgan province for the 2012-13 financial year.
Mr Dawson explained that in the coming years AusAID would strengthen its
Kabul-based presence as its programs in Uruzgan wound down with the transition
to Afghan taking responsibility for security.
Australia's intention is to have a strong but less direct role in the province
and to deliver assistance through development programs administered at the
national level. AusAID acknowledged that this approach carried risks beyond the
general security threats and cited Afghanistan's weak governance systems and
widespread corruption. It explained that Australia would try 'to mitigate these
risks by insisting the Government of Afghanistan makes progress on its own
commitments to tackle corruption'.
AusAID also stated that it would manage its increased aid budget to
Afghanistan effectively and work closely with other agencies during its
transition out of Uruzgan Province. It indicated that it would limit its
exposure by having credible partners deliver Australian aid and put in place
'robust monitoring and evaluation processes' and respond quickly if it detected
The committee has mentioned the 'Children of Uruzgan' program delivered
through Save the Children.
The second Australian program to operate in Uruzgan will be delivered through a
UN agency—UN Office for Project Services (UNOPS)—and involve rural road
construction and rehabilitation. AusAID expected that Australian aid would also
be used during transition and thereafter to help the provincial government develop
its basic administrative and financial management capacity.
AusAID informed the committee of two additional activities that would continue
in Uruzgan past 2013—a sanitation and hygiene program delivered in conjunction
with a Dutch NGO; and a small scale infrastructure program (retaining walls,
bridges and wells) delivered through the UNDP in partnership with the Ministry
of Rural Rehabilitation and Development.
In this regard, the committee understands that AusAID undertakes and
publishes an assessment of multilateral organisations in relation to, among other
things, their 'poverty orientation and impact' and value for money.
It does not do so for NGOs.
The committee notes AusAID's assurances that, although it is to pull its
staff back to Kabul, it intends to maintain at least two main projects in
Uruzgan—Save the Children' to deliver the 'Children of Uruzgan' program and UNOPS
to deliver a reconstruction project as well as two smaller projects. The
committee has considered the advantages in using multilateral organisations and
international NGOs to deliver aid in Afghanistan. It found that NGOs have made
a valuable contribution by helping to deliver services and would continue to
have a pivotal role through the transition. Evidence before the committee also
highlighted the central importance of building partnerships between
communities, civil society, government, donors and NGOs in achieving the
effective delivery of essential services.
To this stage, the committee has mentioned only in passing the role of
local NGOs and civil society organisations as partners in delivering
assistance. A number of witnesses, however, have underscored their importance
in service delivery particularly as Afghanistan moves toward self-reliance.
Civil society including local NGOs
Mr Poulter, CARE Australia, noted that a healthy society has, as well as
effectively functioning governments at the national and local level, a vibrant
Many other witnesses agreed with this view and argued that Afghanistan's civil
society would also have an essential place in assisting the Afghan Government
move through its transition. Caritas highlighted the importance of local and
national governance recognising the value of civil society:
The success of withdrawal relies upon the transition to
Afghan leadership, much of which must be exercised at the local level given the
decentralized nature of the Afghan political structure.
Thus, it argued that civil society engagement and participation were necessary
to encourage government transparency and to make programs more responsive to
people’s needs. In its view, an active functioning civil society was 'essential
to the delivery of equitable development and the achievement of the MDGs'.
Mr de Groot underscored this important role of civil society:
...there is certainly a role for the emergence and fostering of
greater civil society leadership and agency within Afghanistan post 2014. There
is today, and that needs to increase. The Tokyo agreements that talk about
directing 50 per cent of the ODA to government we understand and support. The
other 50 per cent we think civil society should be really encouraged to come
forward and access and show how effective they are.
Some witnesses would like to see an increased use of local NGOs and
civil society organisations (CSOs). They suggest that these smaller local
organisations have been left aside by Afghan and international decision makers:
that they have not been sufficiently consulted nor given the chance to contribute
to decisions that will deeply affect the life of Afghans.
For example, Mr de Groot was of the view that there was space to further engage
small, local NGOs for capacity and community building. He could see that they
would be needed to govern their schools and their health systems and hold their
government to account. Indeed, he said that they would be the future and needed
to be nurtured. His organisation, Caritas, argued that NGOs were well placed as
impartial, independent agencies to work with local communities, and women in
particular, to build their capacity to engage in local level decision making
According to Mr de Groot, Caritas had adopted an approach that would allow
greater opportunity for civil society structures to emerge and for it to
partner with more small community-based organisations.
He spoke of civil society actors in country, as well as international NGOs 'trying
to walk in solidarity to help meet community needs, not just now but over time'.
In its submission, the Afghan Development Association maintained that
through the use of local partners it could 'develop the capacity of local
partners and implement programs efficiently and effectively as compared to
other approaches'. It stated further that by using local partners, the
communities feel ownership in the development activities; therefore, they 'provide
full security and protection to the staff and programs'.
Mr Bryant, AID/WATCH, advocated a move toward more local NGOs while
Oxfam argued that empowering local civil society organisations was 'the way to
According to the TLO report, several smaller Afghan NGOs lamented a perceived
shift of AusAID to funnel its money either through bigger international NGOs or
the Afghan Government. A respondent to the TLO review noted the inefficiency of
this trend, stating:
The Australians don’t give money to small NGOs, but only to
big ones, even though those then in turn need implementing partners. Why not
give the money directly to local NGOs and eliminate the middle-man?
Mr Lowenstein submitted that Australia has a choice to support existing local
Afghan NGOs. In his view, some of the NGOs were doing 'wonderful work' and getting
access to, and operating in, areas where foreign troops were not present. He
indicated, however, that a number of them were not tied to the government and
needed support. It appeared to him that in many cases elements of the
Australian Government and AusAID did not really want to think of using local
NGOs as an option.
He stressed the need for Australia and AusAID to provide support for local
organisations doing work on the ground. To his mind, it was unfortunate that very
few of them were getting support from Australia and that the issue of local
NGOs had been 'largely ignored for a long time.'
Mr Leahy, CARE Australia, also highlighted the important role of civil
society in Afghanistan in managing aid. He noted, however, that the frameworks
developed through the Tokyo process—the mutual accountability framework and subsequently
the aid management policy—are almost silent on the role of civil society in
monitoring and participating in decision making around aid programs. In CARE's
assessment, that omission was significant.
While recognising the importance of local NGOs, Caritas explained that 'regardless
of their capacity civil society will be ineffective if they are omitted from
decision making, planning and implementation processes'.
The Afghan Australian Development Organisation informed the committee of
the 'great demand for village based education and training initiatives, with
classrooms formed in the homes of local leaders and public village mosques'.
A representative of the organisation, Mrs Bianca Pilla, explained that smaller,
locally based organisations that have very well-established linkages with local
government can 'achieve a lot more in terms of challenging the cultural norms
or building acceptance amongst local leaders'. They are able to work with local
leaders and in effect convince them that community based education programs are
beneficial and do not challenge cultural norms and are safe. According to Mrs
Given how scared people in Afghanistan are about what is
going to happen post-2014, they are more likely to accept that model of
education after 2014.
She noted further:
...there is not enough of an emphasis on programs with
community based education and with accelerated learning programs. I think there
is a challenge with Australian organisations not having the linkages with local
organisations who can really get into the remote rural areas and establish this
kind of community based education model.
The committee appreciates the importance of involving local NGOs in
project design and implementation. Local NGOs or civil society organisations suffer
from a number of weaknesses including lack of physical resources—offices,
supplies and remoteness from the central government.
For example, Mr Poulter referred to the limitations of local NGOs including
their inability, at times, to gain access to discussions happening in
ministries in Kabul because of technology or language problems or physical
Mr Naeem, Afghan Development Association, suggested that in the current
context some part of Australian aid be allocated to strengthen NGOs/CSOs as
started by Tawanmandi. Launched by a consortium of donors, this program aims to
strengthen CSOs across Afghanistan and is funded by the UK, Sweden, Denmark and
According to AusAID, it used lessons learnt from the Tawanmandi program in
Afghanistan to inform the development of its new program—the Australia
Afghanistan Community Resilience Scheme.
This program is intended to fund up to five Australian and international
NGOs to work with Afghan NGOs to deliver food security and livelihood programs
in rural Afghanistan.
On 17 December 2012, however, the Australian Government announced that it
was going to reprioritise resources within the aid budget. As a result, the
2012-13 revised budget estimate for the Afghanistan program was reduced by
$11.8 million, which involved deferring the new community resilience program
The committee is concerned that a program targeted at involving local NGOs has
been deferred especially at this time of transition when one of the key
concerns is to build the capacity of local people so that they can become a
vital part of the service delivery chain to their communities.
The committee understands the importance of ensuring that development
assistance reaches the local level and the most vulnerable. It recognises that
Australia works through multilateral organisations and NGOs that in turn team up
with local organisations. The committee, however, is of the view that more
could be done to foster the use of local NGOs. The committee recommends that
Australian agencies providing development assistance in Afghanistan place a
high priority on selecting international partners that have deep connections
and relationships with the local community and use local organisations to help
The committee recommends further that any proposed cut to the aid budget
to Afghanistan should take account of the need to defend the gains made to
date. One key means of doing so, is by building the capacity of local
communities to assume responsibility for delivering front-line services such as
education and health. In this regard, the committee notes the deferral of the
Australia Afghanistan Community Resilience Scheme and recommends that the
Australian Government strengthen not weaken its efforts to involve local NGOs
in the delivery of development assistance.
Civil society monitoring and evaluation
Civil society, including NGOs, can also make a valuable contribution to
evaluating projects funded under arrangements such as the ARTF. An examination
by Oxfam of the strengths and weaknesses of the World Bank-led trust funds highlighted
the importance of independent monitoring by civil society and NGOs in the set
up and delivery of projects under such funds.
CARE Australia proposed including women in the process of establishing and
monitoring internationally funded development programming and government policy.
Mr Leahy suggested that by involving civil society including women, the
intention would be to have the programs and the government accountable to the
people of Afghanistan and not necessarily to foreign donors such as Australia.
He argued that the people of Afghanistan are the owners of their own future,
and need to be given a voice.
Mr de Groot also underscored the important role of civil society. He said:
With the 50 per cent that is government focused, we need to
set targets to see how effective that is. The way of measuring that is by
empowering civil society within Afghanistan to be the judges of how effective
that aid is and how their government is performing to meet their needs
So there are lots of roles, not only in the delivery but in
the monitoring, the evaluation and their own advocacy to empower civil society...Should
that increase more and more? Definitely.
Dr Bizhan identified the need for greater Afghan involvement in
monitoring and evaluation so that the Afghan government and others associated
with the delivery of aid can be held to account.
Recently, the IMF suggested that an immediate challenge for Afghanistan was
to stabilize the security situation and provide an environment that would encourage
the private sector to play a greater role in the economy and become a main
engine of growth. According to the IMF that would require—improving governance,
safeguarding the rule of law, reducing the role of the illicit sector, and
limiting the influence of vested interests.
In a similar vein, Mr Dawson, AusAID, indicated that, for the private
sector to develop and grow, the Afghan Government needed to provide a broad enabling
environment—establish the rule of law, provide court systems to allow
commercial arrangements to be properly arbitrated. He also noted the importance
of looking to provide the opportunity for private sector development at a lower
level. In his view:
Much of the work that has been done around community-level
infrastructure, such as basic road rehabilitation, has generated not just a
significant number of jobs and labour days, but it has also started to build
and encourage a small private sector engaged in the construction industry,
which is a good start for many local-level entrepreneurs.
Mr Dawson also noted the openings created, particularly through the
international presence and through the basic level of services that were
beginning to generate private sector activity. He saw this sector's
contribution as a critical issue especially during the transition period when employment
was needed to absorb increases in population and number of school leavers and
youth. This need would continue throughout the transition period and, after
that, through the transformation decade.
While Mr Lehmann noted that the future situation was far 'less easy to predict',
he was of the view that:
The one thing that commentators consistently say is that the
entrepreneurial spirit of the Afghan people is certainly there and very strong.
In their resilience, their ability to deal with difficult circumstances and the
potential that is created by their position in that part of West Asia.
Mr Poulter referred to the public sector and individual enterprise as a
means of helping recovery through economic growth.
Dr Bizhan noted, however, that the private sector, which could have a critical
role in helping Afghanistan move away from aid dependency, has captured less
attention. He stated:
When we are focusing on helping an aid-dependent country, we
should also think of an exit strategy. In that context, the private sector can
be a good platform for or a way to build on that. 
As an example, he cited private sector engagement in the area of
education and producing graduates that match market demands. He noted that while
there is an emerging private sector in Afghanistan for education with a number
of private universities and schools, there was a lack of support for them. In
his view this was an area where Australia could help because of its experience
in working with the private sector, especially in the area of education.
Considering the commitment that Australia has given to help Afghanistan
rebuild and the important role of the private sector in this recovery, the
committee recommends that DFAT consider establishing an Australia–Afghanistan Institute.
The intention would be for the institute to have a business and education focus
that would help pave the way for increased academic and business engagement
between both countries and strengthen institutional links between their
universities, research institutes and NGOs.
There are many Afghans in Australia keen to help Afghanistan recover and
to be part of the country's reconstruction.
In response to a question about available mechanisms to assist Afghans in
Australia contribute to the rebuilding of Afghanistan, AusAID informed the
committee that there were no specific programs addressing this matter through its
country program. Mr Dawson did note, however, that other groups assist their
home country by registering and getting accreditation as an overseas operating NGO,
which enabled them to access funding through the AusAID-NGO Cooperation
Program. He also identified other ways interested members of the Afghan
diaspora could make a contribution, for example through academic connections or
through individual community level linkages that have nothing to do with a
funding relationship with the Commonwealth.
The committee recommends that AusAID and DFAT look at implementing concrete
and practical ways in which they could assist members of the Afghan community
in Australia to contribute to the development of Afghanistan. The proposed
Australia–Afghanistan Institute could provide one such avenue.
The committee recommends further that AusAID look carefully at
the requirements for an organisation to be accredited as an overseas operating
NGO with a view to giving positive encouragement and support (both funding and
administrative) to Afghans in Australia seeking to assist Afghanistan with its
The committee fully endorses Australia's commitment to allocate 50 per
cent of its aid to Afghanistan through on budget mechanisms. It particularly
supports Australia's increasing contribution to the ARTF.
For many years, Australia has channelled a substantial proportion of its
aid to Afghanistan directly through NGOs and continues to do so. The committee
acknowledges the good work that is being achieved through this mechanism and
recognises that NGOs will have an important role during the transition period
and beyond. The committee, however, also recognises the importance of using
local NGOs and other civil organisations in Afghanistan to build up their
capacity to serve their people. The committee does not suggest that the
Australian aid agencies should fund local NGOs directly but should pay close
attention to the mechanisms they use to ensure that local NGOs figure
prominently in the design, planning and implementation of aid programs.
The committee understands that Afghanistan needs a healthy private
sector in order to drive the necessary economic growth that would provide
income earning opportunities for its growing population and generate the
revenue needed for government to deliver essential services. In this regard,
the committee believes that DFAT and AusAID should be looking at creative and
practical ways to encourage Australian organisations, including within the
Afghan diaspora, to forge links with the business and academic community in
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