Friday, July 25, 2014

Falling Short on Afghanistan

By PADDY ASHDOWN and JOSEPH INGRAM–

A just-released report from Afghanistan’s Ministry of Finance has produced some shocking findings with disturbing implications for the future of the war-ridden country and its unstable neighborhood. Yet the report and its conclusions have failed to capture the attention of the key politicians overseeing financial and military support from Afghanistan’s allies.

What this technical report, “The Donor Financial Review for 2008,” concludes is that the international community is falling woefully short in financing its own estimates of Afghanistan’s needs. For the period from 2008 to 2012, the financing gap is about $22 billion, or 48 percent of estimated needs. Worse, the activities financed by the donors have so far been seriously out of line with the strategic priorities established in Afghanistan’s National Development Strategy, which has been strongly endorsed by the donor community as a whole.

Although the Obama administration and its allies have stressed the need to direct more resources to economic and social development, the review suggests this direction is still to be established. As under the Bush administration, proportionately more appears to be going to security, with shrinking resources available for meeting Afghanistan’s development needs.

If this trend continues, as projected donor commitments suggest it will, the suffering of a very poor population will get worse, fueling support for the fundamentalist insurgency that threatens the entire region.

How can these dangerous trends be addressed, and are there lessons to be drawn from “successes” in other parts of the world?

Given that in the first years following conflicts in Bosnia and East Timor, financial aid per capita was on the order of $580 and $400 respectively, commitments today of only $57 per capita to Afghanistan seem laughably insufficient. These numbers suggest that the financing aid that has been committed or actually disbursed needs to be dramatically augmented.

At the same time, the proportion of resources being managed through Kabul’s own budget – rather than separately by each donor – needs to be increased. Currently, only 20 percent of the international community’s financial aid is being managed through Afghanistan’s national budget and in accordance with its strategic priorities. This is occurring despite a recent World Bank assessment that shows substantial improvements in the government’s overall capacity to manage developmental resources. Instead, 80 percent is being managed by donors themselves, creating costly inefficiencies.

Indeed, the situation described in the review defies all the principles of good practice in donor coordination, principles established by these same donor governments in a recent document known as the “Paris Declaration on Aid Effectiveness.” While coordinating the donor community is often equated with herding cats, and each situation is unique, there are “success stories” like Bosnia, which offer important lessons.

In Bosnia, the international community was led by a so-called high representative, an impartial individual with credibility in the eyes of both the civilian and military communities. Though equipped with extraordinary powers conferred by a council made up of the government signatories to the Dayton Peace Accord, the high representative used these powers selectively, and only after consultation with the Bosnian government and council members.

Critical to successful coordination, however, was the creation locally of a board of key donor agency heads, a de facto cabinet under the chairmanship of the high representative, which met weekly, set common objectives and worked to align those objectives with government priorities. The board consisted of the heads of NATO forces, international police and security forces, the ambassadors of the European Union, the United States, Britain, the United Nations, the I.M.F. and the World Bank. Through this arrangement, the high representative, an E.U. national, was perceived as representing the interests of the broader international community rather than those of any single power.

This enabled the international community to act with unity in a way that allowed them to be better partners to the domestic authorities. The result was an efficient use of international aid, through a more effective prioritization of financial resources directed to infrastructure, health, education, a social safety net and job creation, as well as ensuring adequate security.

Given the desperate poverty and the danger of a fundamentalist takeover in the region, Afghanistan deserves no less.

Lord Ashdown is a former E.U. high representative in Bosnia. Joseph Ingram is a former director of the World Bank’s office in Bosnia.