Falling Short: Aid effectiveness in Afghanistan | Aids

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Increasing insecurity and criminality is jeopardising progress in Afghanistan. With low government revenues, international assistance constitutes around 90% of all public expenditure in the country, thus how it is spent has an enormous impact on the lives of almost all Afghans and will determine the success of reconstruction and development. Given the links between development and security, the effectiveness of aid also has a major impact on peace and stability in the country. Yet thus far aid has been insufficient and in many cases wasteful or ineffective. There is therefore no time to lose: donors must take urgent steps to increase and improve their assistance to Afghanistan.
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    Aid Effectiveness in Afghanistan Matt Waldman March 2008 FALLING SHORT ACBAR A DVOCACY   S ERIES      Contents EXECUTIVE SUMMARY.........................................................................................................................1 INTRODUCTION ....................................................................................................................................6   1. VOLUME .............................................................................................................................................7   2. PURPOSE AND IMPACT..................................................................................................................10   3. OWNERSHIP, ALIGNMENT AND COORDINATION.......................................................................16   4. EFFICIENCY.....................................................................................................................................18   5. TRANSPARENCY AND ACCOUNTABILITY...................................................................................20   6. CONCLUSION AND RECOMMENDATIONS...................................................................................21    APPENDIX 1 .........................................................................................................................................25    APPENDIX 2 .........................................................................................................................................26 BIBLIOGRAPHY...................................................................................................................................27 ENDNOTES...........................................................................................................................................28    Author:  Matt Waldman (1)  Policy and Advocacy Adviser, Oxfam International, Afghanistan Photos: Leslie Knott, Adviser to the APPPA ‘Unheard Voices’ Project which presents photographic per-spectives on poverty through the eyes of Afghan women. Photo: Matt Waldman (page 23).    Executive summary Increasing insecurity and criminality is jeopardising progress in Afghanistan. With low government reve-nues, international assistance constitutes around 90% of all public expenditure in the country, thus how it is spent has an enormous impact on the lives of almost all Afghans and will determine the success of reconstruction and development. Given the links between development and security, the effectiveness of aid also has a major impact on peace and stability in the country. Yet thus far aid has been insufficient and in many cases wasteful or ineffective. There is therefore no time to lose: donors must take urgent steps to increase and improve their assistance to Afghanistan. Reconstruction assistance is a fraction of military spending. Since 2001 the United States has appropri-ated $127 billion for the war in Afghanistan and the US military is currently spending nearly $100 million a day in the country, some $36 billion a year. Yet the average volume of international aid provided by all donors since 2001 is woefully inadequate at just $7 million per day. This paucity of aid is reflected in comparative aid per capita figures. In the two years following international intervention, Afghanistan re-ceived $57 per capita, whilst Bosnia and East Timor received $679 and $233 per capita respectively. Since 2001 some $25 billion has been spent on security-related assistance to Afghanistan, such as building Afghan security forces. Donors have committed to spend the same amount on reconstruction and development, yet some leading donors have failed to fulfil little more than half of their aid commit-ments. Thus, there is an aid shortfall of some $10 billion – equivalent to thirty times the annual national education budget. Just $15 billion in aid has so far been spent, of which it is estimated a staggering 40% has returned to donor countries in corporate profits and consultant salaries. In absolute terms, the US is by far the largest donor, contributing one-third of all aid since 2001. Other major donors are: Japan, the UK, the European Commission (EC), the World Bank (WB), Germany and Canada; the relative contributions of The Netherlands, Norway and Sweden also are substantial. France and Spain, however, have made scant bilateral contributions since 2001 of just $80 million and $26 mil-lion.  Although a number of donors have major projects underway, according to Afghan government figures, the Asian Development Bank (ADB) and India have disbursed only a third of their commitments for 2002-2008. The US has to date disbursed only half of its $10.4 billion commitment for this period; and the WB just over half its $1.6 billion commitment. The EC and Germany have disbursed less than two-thirds of their respective commitments of $1.7 billion and $1.2 billion. These shortfalls are partly attribut-able to challenging operating conditions, high levels of corruption and weak absorption capacities – and government data may not capture all donor spending. However, the magnitude of the shortfalls under-scores the importance of donors increasing efforts to mitigate or adapt to such problems, to factor them in to programme planning, and to improve the flow of information to the Afghan government. 1 ACBAR Advocacy Series    Separately, a number of donors are not on track to fulfil their aid pledges for 2002-2011. Overall, $39 billion has been pledged up to 2011; but, so far, less than 40% of that amount has been spent. Accord-ing to Afghan government figures, Spain has disbursed only 10% of the aid it has pledged for 2002-2011, and the US and India have disbursed only 22% of their respective pledges of $22.8 billion and $940 million. Turkey, China, the ADB and WB and Saudi Arabia have all so far delivered less than 40% of their aid pledges for this period. Much has been achieved in Afghanistan since 2001: there has been the establishment of democratic institutions and ministries, significant improvements in health care and immunization, the major expan-sion of primary education, the construction of roads and transport infrastructure, economic growth, and the formation of state security forces. There are many cases of well-delivered aid, for example in the education sector or in community-based rural development projects that are part of the National Solidar-ity Programme (NSP), which have made a significant difference to Afghan lives. However, most Afghans still endure conditions of hardship and millions live in extreme poverty. Far too much aid has been prescriptive and driven by donor priorities – rather than responsive to evident Afghan needs and preferences. Too many projects are designed to deliver rapid, visible results, rather than to achieve sustainable poverty reduction or capacity-building objectives. One quarter of all aid to Afghani-stan has been allocated to technical assistance – which is intended to build government capacity – yet much of such assistance has been wasteful, donor-driven and of limited impact. In the design or execu-tion of projects, too often the promotion of the capabilities, status and rights of women is an afterthought or perfunctory consideration. Most aid has been directed to Kabul or other urban centres, rather than to rural areas where it is most needed and more than three-quarters of Afghans live. At a macro level, ar-eas such as agriculture have been under-resourced due to a lack of prioritisation. Whilst there are undoubtedly resource constraints in Afghanistan, donors have fallen short on pledges made under the Afghanistan Compact to use more Afghan human and material resources. Over half of all aid to Afghanistan is tied, by which donors often require procurement of services or resources from their own countries. NGOs have a vital role in supporting rural development and are comparatively cost effective. Yet some donors have reduced funding for Afghan and international NGOs, which has limited their ability to sup-port the delivery of essential services, especially in rural areas, and to build the capacities of communi-ties and local government. There are significant disparities in the geographical distribution of aid. This is due to a range of factors, but not least because aid is being used to achieve military or political objectives. A number of major do-nors direct a disproportionate share of their funds to the southern provinces where the insurgency is 2 Aid Effectiveness in Afghanistan
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