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Emerging Markets

Afghan aid oversight blasted

The international community’s push to improve security in Afghanistan will fail without urgent reforms to foreign aid, the country’s finance minister has said

The international community’s push to improve security in Afghanistan will fail without urgent reforms to foreign aid, the country’s finance minister has said.

“There is a new security strategy for Afghanistan that needs to be followed up by a new coherent and sustainable development strategy,” Omar Zakhilwal, told Emerging Markets in a telephone interview.

US president Barack Obama has recently vowed a new “civilian surge” of up to 600 non-military experts to Afghanistan, in addition to a massive troop surge. Last week, British prime minister Gordon Brown vowed more donor coordination in aid disbursements after pledging an extra £500 million to the country over the next four years.

But Zakhilwal argued that foreign aid should be funneled into the central mechanism of the Afghanistan Reconstruction Trust Fund, led by the World Bank, and should focus on “capacity building of Afghan institutions”.

Afghan policy-makers and Western development practitioners have long complained that foreign aid bypasses the national budget, appears to be uncoordinated, and is whittled down on account of the procurement of expensive goods and services from developed countries.

The national budget is 90% financed by foreign aid, but only 20% of all donor commitments are channelled through the Afghan government. Western governments cite rampant corruption in the country, human resource deficiencies, and their greater technical capacity to justify the largely donor-driven ownership of Afghanistan’s development strategy over the past seven years.

Zakhilwal credited efforts to coordinate the military and development push in the southern province of Kandahar as the key to the success in aid delivery in that area.

The US Congress is drawing up benchmarks to assess the progress in security, governance and economic development in Afghanistan. Some in Washington argue that money to Afghanistan has been wasted in recent years due in part to the perceived weakness of the country’s president Hamid Karzai.

But Zakhilwal said the culpability of the Afghan authorities in corruption was vastly overstated, given their lack of control over development spending. In addition, he argued that the donor community “should itself be judged by benchmarks” set up by an independent committee. This would ensure that foreign aid is effective and aligned to government priorities.

Ashraf Ghani, the country’s former finance minister and a candidate in presidential elections in August, told Emerging Markets: “Karzai has tolerated massive amounts of corruption. His weakness is largely why Afghanistan’s security and development has remained so poor in recent years.

“Good governance can reverse the insecurity and corruption that is rampant in the country”, Ghani said. “Afghanistan needs a strong leader with a national strategy and a good mechanism for aid delivery.”

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