The Problem with US Aid

I�m posting an extract of an article which opened my eyes about the
US Aid programme which many Americans, and many posting on this
site, often quote as if it was the saving grace behind all the US
administration�s blunders, mismanagement and miscalculations. I�ve
often seen US posters here reminding us how generous US Aid is,
and it seems to me it is deeply buried in the US psyche that somehow
US Aid is the world�s saviour.

Why It's Not Working in Afghanistan
By Ann Jones
TomDispatch.com August 28

During the last five years, the U.S. and many other donor nations
pledged billions of dollars to Afghanistan, yet Afghans keep asking:
"Where did the money go?" American taxpayers should be asking the
same question. The official answer is that donor funds are lost to
Afghan corruption. But shady Afghans, accustomed to two-bit
bribes, are learning how big-bucks corruption really works from the
masters of the world.

A fact-packed report issued in June 2005 by Action Aid, a widely
respected NGO, headquartered in Johannesburg, South Africa, makes
sense of the workings of that world. The report studied development
aid given by all countries globally and discovered that only a small
part of it -- maybe 40% -- is real. The rest is "phantom" aid; that is,
the money never actually shows up in recipient countries at all.

Some of it doesn't even exist except as an accounting item, as when
countries count debt relief or the construction costs for a fancy new
embassy in the aid column. A lot of it never leaves home. Paychecks
for American "experts" under contract to USAID, for example, go
directly from the Agency to their American banks without ever
passing through the to-be-reconstructed country. Much aid money,
the report concludes, is thrown away on "overpriced and ineffective
Technical Assistance," such as those very hot-shot American experts.
And a big chunk of it is carefully "tied" to the donor nation, which
means that the recipient is obliged to use the donated money to buy
products from the donor country, even when -- especially when --
the same goods are available cheaper at home.

According to targets set years ago by the UN and agreed to by
almost every country in the world, a rich country should give 0.7% of
its national income in annual aid to poor ones. So far, only the
Scandinavian countries, the Netherlands, and Luxembourg (with real
aid at 0.65% of national income) even come close. At the other end of
the scale, the U.S. spends a paltry 0.02% of national income on real
aid, which works out to an annual contribution of $8.00 from every
citizen of "the wealthiest nation in the world." (By comparison,
Swedes kick in $193 per person, Norwegians $304, and the citizens
of Luxembourg $357.) President Bush boasts of sending billions in
aid to Afghanistan, but in fact we could do better by passing a hat.

The Bush administration often deliberately misrepresents its aid
program for domestic consumption. Last year, for example, when the
President sent his wife to Kabul for a few hours of photo ops, the
New York Times reported that her mission was "to promise long-
term commitment from the United States to education for women
and children." Speaking in Kabul, Mrs. Bush pledged that the United
States would give an additional $17.7 million to support education in
Afghanistan. As it happened, that grant had previously been
announced -- and it was not for Afghan public education (or women
and children) at all, but to establish a brand-new, private, for-profit
American University of Afghanistan catering to the Afghan and
international elite. (How a private university comes to be supported
by public taxpayer dollars and the Army Corps of Engineers is
another peculiarity of Bush aid.)

The criteria by which contractors for USAID are selected have little or
nothing to do with conditions in the recipient country, and they are
not exactly what you would call transparent. Take the case of the
Kabul-Kandahar Highway, featured on the USAID website as a proud
accomplishment. In five years, it's also the only accomplishment in
highway building -- which makes it one better than the Bush
administration record in building power stations, water systems,
sewer systems, or dams.

The highway was featured in the Kabul Weekly newspaper in March
2005 under the headline, "Millions Wasted on Second-Rate Roads."
Afghan journalist Mirwais Harooni reported that even though other
international companies had been ready to rebuild the highway for
$250,000 per kilometer, the U.S.-based Louis Berger Group got the
job at $700,000 per kilometer -- of which there are 389. Why? The
standard American answer is that Americans do better work --
though not Berger which, at the time, was already years behind on
another $665 million contract to build Afghan schools. Berger
subcontracted to Turkish and Indian companies to build the narrow,
two-lane, shoulderless highway at a final cost of about $1 million
per mile; and anyone who travels it today can see that it is already
falling apart.

Former Minister of Planning Ramazan Bashardost complained that
when it came to building roads, the Taliban had done a better job.
Now, in a move certain to tank President Karzai's approval ratings
and further endanger U.S. and NATO troops in the area, the Bush
administration has pressured his government to turn this "gift of the
people of the United States" into a toll road, charging each driver $20
for a road-use permit valid for one month. In this way, according to
American experts providing highly paid technical assistance,
Afghanistan can collect $30 million annually from its impoverished
citizens and thereby decrease the foreign aid "burden" on the United
States.