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Major donors failing Afghanistan due to US$10bn aid shortfall

Forty percent of aid spending returns to rich countries in corporate profits and consultant costs

The prospects for peace in Afghanistan are being undermined because Western countries are failing to deliver on their promises of aid to the tune of US$10bn and because aid going to the country is used ineffectively, according to a new report written by ACBAR, an alliance international aid agencies working in Afghanistan.

The international community has pledged US$25bn to Afghanistan since 2001 but has only delivered US$15bn. The US is the biggest donor to Afghanistan but also has one of the biggest shortfalls - according to the Afghan government between 2002 and 2008 the US only delivered half of its US$10.4bn commitment.

An estimated 40 percent of the money spent has returned to rich donor countries such as the US through corporate profits, consultant salaries and other costs, vastly pushing up expenditure. For example, a road between the centre of Kabul and the international airport cost the US over US$2.3m per kilometer, at least four times the average cost of building a road in Afghanistan.

Around 90 percent of all public spending in Afghanistan comes from international aid so the massive shortfall hinders efforts to rebuild infrastructure damaged by over two decades of war, and to ensure the widespread delivery of essential services such as education and health.

The report’s author Matt Waldman, Afghanistan policy adviser at international aid agency Oxfam, said: “The reconstruction of Afghanistan requires a sustained and substantial commitment of aid - but donors have failed to meet their aid pledges to Afghanistan. Too much aid from rich countries is wasted, ineffective or uncoordinated.

“Given the slow pace of progress in Afghanistan, and the links between poverty and conflict, the international community must urgently get its act together.

“Spending on tackling poverty is a fraction of what is spent on military operations.

“Whilst the US military is currently spending US$100m a day in Afghanistan, aid spent by all donors since 2001 is on average less than a tenth of that - just $7m a day.”

The report says a level of donor under-spending can be expected because of the lack of government capacity, large-scale corruption and challenging security conditions. But the size of the shortfall highlights the importance of donors making concerted efforts to address these issues.

The report also shows that a disproportionate amount of aid follows the conflict and is being used for political and military objectives rather than reducing poverty.

Mr Waldman said: “This is a short-sighted policy. There must be strong support for development in the south but if other provinces are neglected then insecurity could spread.”

Looking to the future of aid to Afghanistan, Mr Waldman said:

“The priority now is to increase the volume of aid and ensure it makes a sustainable difference for the poorest Afghans, especially in rural areas. Aid must address Afghan needs, build local capacities and help Afghans help themselves.”

ACBAR’s main recommendations are:

  • Increased volume of aid, particularly to rural areas.
  • Transparency by donors and improved information flows to the Afghan government.
  • Better measurement of the impact, efficiency and relevance of aid.
  • An independent commission on aid effectiveness to monitor donor performance.
  • Effective coordination between donors and with the Afghan government.
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