Ailing aid

Editor’s note: This is Part I of a two-part series focusing on aid provision in conflict zones, with tomorrow’s edition to focus on Afghanistan.

Although the White House was cautiously optimistic in its recent strategy review on Afghanistan, even for seasoned AfPak watchers, it can be difficult to discern exactly what the U.S. strategy is towards Afghanistan. The sound bite summary "clear, hold, build" may be simplistic, but it still offers a useful starting place to evaluate U.S. and NATO efforts. The "clear" and "hold" represent the straightforward ideas (in theory if not execution) of taking and holding ground, operations with which militaries are well-acquainted. The real issue, and the key to success or failure, is defining what "build" really means, and examining how the United States and NATO are "building" in Afghanistan.

While many factors in Afghanistan (and Pakistan, for that matter) are unique, in a larger sense, the challenges faced there are the same issues, with new faces, that the United States has been long been struggling with in other countries. The U.S. government clearly hopes to "build" the Afghangovernment and military up to the point that it will take the lead in battlingthe Taliban. For decades now, in countries around the world, the tool most frequently called on to "build" countries is aid. Sometimes aid comes in the form of humanitarian, short-term assistance, i.e. emergency food, medicine,water, and shelter, aimed at stabilizing crisis situations. In other cases, aidcomes in the form of "official development assistance" or ODA, most often adirect cash transfer from a donor government or donor institution to a recipient country, usually in the form of grants or low-interest loans, and aimed at promoting long-term growth by developing infrastructure, education,and more. In the case of Afghanistan (and Pakistan), aid to the region hasconsisted of a mixture of both humanitarian and strategic (ODA) aid.

Is it working? If the recent comments of General Sir David Richards, the former NATO Commander in Afghanistan, are any guide, the track record of aid in building Afghanistan is mixed at best. "It may have been better and more efficient if the international community had simply air-dropped bundles of money throughout the country," he said in an interview, "It’s a very interesting philosophical point, the effect of aid. It can have a pernicious effect."

A look at three short books may shed some much-needed light on how efforts to "build" countries’ capacity for self- government have fared elsewhere, and when taken in combination, offer a fresh perspective that can help evaluate the successes and failures of "building" Afghanistan. The first is The Crisis Caravan; What’s Wrong with Humanitarian Aid by Dutch journalist Linda Polman. The second is Dead Aid; Why Aid Is Not Working and How there is a Better Way for Africa by Zambian economist Dambisa Moyo. Last, but not least, is the cultural primer by Afghan sociologist Ehsan Entezar, Afghanistan 101.

As a veteran foreign correspondent, Polman has seen the most appalling conflict zones of the last three decades. She starts by looking at the refugee camps in Goma, Zaire in the mid 1990s, populated by thousands of the same Hutu "genocidaires" that initiated the anti-Tutsi orgy of killing in Rwanda,then fled in fear of retribution as a Tutsi army entered Rwanda to put a haltto the slaughter. The aid workers running the camps proved willfully blind bothabout who their "clients" were, and the implications of providing those murderous clients aid. These "genocidaires" first inflated the number ofrefugees to the aid groups, then took the excess provisions provided by aidagencies, sold them on the black market, and used the money to buy weapons to continue the anti-Tutsi genocide in the country surrounding the camps. Even worse, though, was the blatant refusal on the part of aid agencies to acknowledge the campaign of murder and intimidation the genocidaires waged within the camps themselves. Most inexcusable was the frenzy to land aid contracts,which lead aid groups into arrangements that in any other circumstance would be called open collaboration with war criminals. Polman sums this attitude up with a quote from an aid worker, "For the aid organizations in Goma, it was a matter of feed the killers, or go under as an organization."

The next stop of Polman’s "Crisis Caravan" is Ethiopia inthe 1980s. Polman takes a hard look at the "famine" in the mid 1980s in Northern Ethiopia, coverage of which culminated in the world-wide fund raising effortsknown "Band Aid" and "Live Aid." In the first half of the 1980s, Ethiopia’srepressive government found the northern regions of Eritrea and Tigray in open rebellion. Government troops blockaded the area, and then began a methodical campaign of atrocities. Murder, rape, arson, destruction of food and livestock created a refugee crisis. The Ethiopian government then invited in the international media to witness the tragic refugees and attributed their suffering to "famine arising from drought." The various Band/Live Aid fundraisers in response generated more than $100 million dollars, which were then spent in compliance with conditions laid-down by the Ethiopian government…the very same government whose atrocities caused the refugee crisisin the first place. The strategy worked so well, the Ethiopian government conducted another round of atrocities in 1999, and then extended invitations to foreign journalists to cover see the refugees. In 2007, more atrocities emerged, with the result that in 2008, Ethiopia was the third-largest recipient of humanitarian aid in the world, totaling 807 million dollars.

While revealing the Ethiopian aid travesty, Polman relates at the same time how neighboring Sudan adopted a similar strategy, deliberately creating a refugee crisis as part of a civil war, and then cynically milking the international community for all the aid it was worth. And it worked, there, too. In 2008, Sudan was one of the only two countries that received even more humanitarian aid than Ethiopia. While the recent South Sudan referendum offers a glimmer of hope that the crisis may be abating, in a region where failed nation-building and relapse into civil war is common, it is too early to judge whether the civil war is truly extinguished, or merely subsided into banked coals awaiting fresh fuel.

Polman winds up with a look at war-torn Sierra Leone. The scene starts in Murray Town Camp, where a group of amputees become willing participants in a fund-raising farce, displaying their mangled limbs in daily photo opportunities with countless aid organizations, all the better to tug onthe heart-strings of various donors. Next is an interview with a rebel captain who admitted that the campaign of mass amputations during Sierra Leone’s civil war was no accident, but carefully calculated savagery to lure western press, and thus Western aid dollars, to the area. Polman’s exposition of Sierra Leone’s heart of darkness is wrapped up in a visit to one splinter group of rebels that refused to sit down at the peace table when other rebel factions had laid down their arms. When asked why they were not at the peace negotiations in Freetown, one of the fighters yelled the response, "Do you know what WAR means? … WAR means ‘Waste All Resources.’ Destroy everything. Then you people will come and fix it."

Dambisa Moyo’s Dead Aid, as befits a book penned by a Harvard and Oxford-trained economist who has worked at both the World Bank and Goldman Sachs, is less anecdotal and polemical than Polman’s work, and more an exercise in crunching numbers. After putting decades of ODA to Africa under the financial microscope, Moyo’s conclusions, while less viscerally upsettingthan Polman’s tales, are no less damning to the notion that aid provides a developmental boost.

Moyo starts with the Marshall Plan, the post WWII aid effort to revive and rebuild war-ravaged European economies, one trumpeted as the prime example of the successes possible with aid. A tour of the facts show that while the Marshall Plan was a notable success for aid, the very things that made the Marshall Plan a success are absent from ODA programs. Unlike most ODA to Africa, the Marshall Plan was limited to reconstruction of physical infrastructure. War-ravaged though Europe was, it nevertheless retained the framework of functional financial and governmental institutions and know-how to efficiently and honestly distribute Marshall Plan Funds. Even at its height, aid flows under the plan never exceeded 3% of Gross Domestic Product (GDP) to the recipient countries. The Plan was not attempting to build what had never existed, but rather rebuild what had once been. Most important, the Marshall Plan was finite, with a five year cut-off period.

Contrasting the Marshall Plan’s success with the typicalsituation of aid recipients in Africa, Moyo notes that currently 15% of Africa’s GDP comes from aid, five times the percentage of GDP of the Marshall Plan. Most of the recipient countries have weak civil institutions, making it almost a certainty that ODA dollars will be stole by recipient governments. Not limited just to infrastructure, ODA has poured into all sectors of society, permeating health care, education, various militaries, and every level of civil society, with the net result of encouraging bloated budgets and staffs. Worst of all, as the aid kept flowing for decade after decade; it created a culture of dependence that smothers nascent economic development.

While acknowledging the various well-intentioned attempts tomake aid "work," Moyo does not shy from analyzing the roots of the serial failures. For instance, though donor nations/institutions usually attempt to attach conditions to the way ODA is to be used, those conditions are blatantly ignored on an ongoing basis. She cites World Bank studies that show almost 100% of aid tranches were distributed, even when compliance with conditions attached to the aid was less than 50 percent, and another that noted that 72 percent of aid goes to countries with poor compliance records. In one specific example, she reports on one education project in Uganda in which 80 cents of every dollar sent to the project was stolen.

Moyo also notes that aid in the form of direct transfer of goods is incredibly counterproductive: farmers cannot grow grain for sale when donor countries depress prices by providing vast quantities of free grain. Makers of mosquito netting cannot make and sell their products if they are given away for free by NGOs. Every item delivered for free delivers a short term benefit…and a death blow to domestic production of those same items. One of the most telling statistics Moyo cites about the efficacy of ODA is the simple fact that "Over the past 30 years, the most aid dependent economies have on average shrunk at .02 percent per annum," precisely the opposite of what one would expect if ODA had a positive effect.

Although Polman’s book is largely about humanitarian aid,and Moyo’s is about strategic or "ODA" aid, Polman does look at ODA in a chapter aptly titled "Afghaniscam." The spectacular mismanagement of a housing project in Bamiyan province is emblematic of the failures of ODA in Afghanistan. The project started with 150 million dollars indonor funds, which was given to an aid agency in Geneva, which kept 20% for "expenses" and passed the contract onto a Washington D.C based agency, whichkept 20%, and passed it on to a further contractor, which kept a further 20%. What was left was passed onto an organization which purchased wooden beams fromIran, and trucked them to Bamiyan province at five times the normal freight fee, the haulage provided by a trucking company owned by the governor ofBamiyan province. Upon arrival, the (alleged) beneficiaries of the projectimmediately realized the beams were too heavy to be used with the loam-walledconstruction common to the area, so the wood was chopped up and used to fuel cook-fires, providing what was surely the single most expensive load of firewood in the history of man.

As one former director of the World-Bank in Kabul put it, "In Afghanistan, the wastage of aid is sky-high: there is real looting going on…It’s a scandal. In my 30-year career, I’ve never seen anything like it." In the uniquely useful dictionary of "aid-speak" that follows the main body of the Polman’s book, she enlightens the reader about "phantom aid", of which the Bamiyan housing project was a prime example. "Phantom aid" is one of the dirtiest little secrets of the aid world: most aid dollars never leave the donor country, but are instead paid straight into the bank accounts of aid agencies, lobbyists, and interest groups in the donor country, where the funds are absorbed by administrative expenses or spent purchasing goods and services for shipment to the crisis zone at exorbitant first-world rates. The averagerate of "phantom aid" is 60%, but for the U.S. government-funded donations, it is closer to 80%. One study found that U.S. aid expenses in Iraq could have been cut by an astonishing 90% if the infrastructure projects had been contracted to Iraqi rather than American companies, and noted that over half the U.S. aid dollar expenditures in Iraq had been spent providing food, housing, and protection to the Americans sent to Iraq to implement the aid projects. Given that the same "usual suspects" of the contracting world which operated in Iraq are also operating in Afghanistan, it is hard not to draw the conclusion from the Crisis Caravan that similar rates of wastage are probably going on in Afghanistan as well.

One area in which Polman’s Crisis Caravan and Moyo’s Dead Aid are in perfect agreement is that aid programs, be they humanitarian or ODA, actively fuel and intensify civil conflict, with the struggle virtually always expanding from the original casus belli into one overcontrolling the resources the aid provides. Moyo puts it like this: "The problem is that aid is not benign — it’s malignant. No longer part of the potential solution, it’s part of the problem — in fact, aid IS theproblem." (Note: neither Moyo nor Polman argue against short term emergency aid for natural disasters, i.e. tsunami or earthquake relief. It the pouring of aid into man-made disasters that makes those disasters worse.)

Art Keller is a former case officer for the Central Intelligence Agency’s National Clandestine Service. He participated in counterterrorism operations against al-Qaeda in the FATA of Pakistan in 2006.