international aid | ukwatch.net

Cock 'n' Kabul Story

Ellie Keen — Sat, 14 Jun 2008 11:37:32 +0000

How the plan to devastate and then 'reconstruct' Afghanistan is paying dividends

This week the 100th soldier was killed since (illegal) British operations began in Afghanistan more than six years ago.”They have paid the ultimate price” said Gordon Brown, “but they have achieved something of lasting value.” Shareholder value that is - with most of the ‘aid’ / reconstruction cash going to a small number of corporate contractors for overpriced and shoddy work.

It’s considered legitimate for a corporation to make huge profits if its prepared to invest in a warzone. Its all about ‘rewarding risk’ and entrepreneurial prowess – War is an attractive proposition for right-wing money men and ex-army / militia thug types. £8bn in reconstruction money (almost all of it from the U.S) has been spent so far and, on average, each contract awarded to the private sector costs four times more than if it was run by the Afghan government. It costs, for example, £6,000 to build a classroom under a government run contract - but US corporations are building the same schools with the same sub contractors for more than 25 grand a piece. Half of all aid is actually spent outside of the country. At the same time the average resident of Kabul will be lucky to get more than six hours of electricity a day.

Most of the loot is being sucked up by reconstruction which runs over-budget. And since there’s no one’s checking the cashflow that comes as hardly a surprise. On average international ‘donors’ are spending three quarters of their ‘aid’ on privately run projects with no government oversight. Although the State Department does not gather the statistics because (says a spokesman) the figures are “not important to us” – it is estimated that only 3% of US aid is given to the Afghan government. The rest goes to the corporations that are so closely tied to (and sponsor) the Bush administration.

It was never the invading powers’ intention for their governments to pay for the reconstruction themselves - they’d be leaving that to the US and UK taxpayers. Using their leverage and influence to snap up lucrative investments and non-exec positions with the same companies bankrolling the political class help them all pick up this bountiful tax income through reconstruction, security and ‘advice’ contracts. Any shares in the corporations that win contracts can be packaged in a variety of ‘financial instruments’ (e.g. offshore trust funds) so the voter need never know that their political representative is making a fortune.

And if you’re vice President and former Chief Executive Officer of Halliburton, like Dick Cheney, then you can simply operate under a subsidiary name - Kellogg, Brown and Root (KBR) in this case. And what a nice little earner that’s turning out to be. KBR picked up a £50 million contract from the State Department back in 2002 to build a new embassy in Kabul. The company has since been awarded further contracts worth £115 million. Mindful of all the bad PR, Cheney left Halliburton in August 2000, promising to sever all financial ties to the company. A few stock options later and Dick was £20 million better off. But he still pockets anything between £100,000 and £1/2 million each year in ‘deferred compensation’ showing that he continues to profit from the war he made the decision to wage.

Afghanistan’s Rebuilding Agricultural Markets Program has been bankrolled by USAID (the government agency awarding contracts), with more than £25 million a year going to Chemonics International to persuade Afghanis to adopt the more profitable western approach to growing food. Chemonics is the the knowledge economy game where it receives hefty fees to ‘advise’ governments. Ninety percent of its cash comes through USAID - where its controlling owner, Scott Spangler, used to work as director under papa Bush.

The Price is Right

To help make the loot flow in the right direction, between 1990 and 2003 the Spangler family gave the republican party £50,000 – and now they want to see a return for their investment. Despite Chemonics best efforts a country once more than self sufficient in food now sees half the population go hungry.

Another option is to obtain a valuable contract – in security for example – and sub contract it out to the locals for a nice fee. Private security firm, United States Protection and Investigations, charges £2,500 a month for a security team of six. But when western security forces charge more than £1,000 a day, its so much cheaper to pay an Afghani security worker who only commands £60 a month. With six employees costing just £360 – 80% of the money is straight profit. In fact even the World Bank director in Kabul, Jean Mazurelle, estimates that 35 to 40 percent of all international aid sent to Afghanistan is “badly spent.”

The consequences of inaction on locally-led development are clear. While Brown talks of an ‘historic mission’, Afghanis are wondering where all the promised assistance has gone. Corruption in government and blatant profiteering by western corporations is only serving to alienate a population which then turns against those responsible for the abuses – be they warlords, government officials or the international forces that support them.

For more info on the recent rise of private military companies, check out Jeremy Scahill www.alternet.org/authors/5434

* More than one in five of the 100 soldiers killed since November 2001 were not caused by enemy fire – but accidents. The statistics are a little skewed when the crash of an aging Nimrod spy plane killed all 14 crew. Nevertheless of the 201 British soldiers killed in Iraq and Afghanistan more than 80 died because of accidents. Oops.

The Tragedy of Afghan Aid

Ellie Keen — Thu, 24 Apr 2008 22:45:38 +0000

It was a photo opportunity that was meant to signal a new dawn for Afghanistan. In January 2006, then British Prime Minister Tony Blair hosted a conference for some 60 international delegates in London on the future of the country.

Standing side by side with Tony Blair for the conference photo was US Secretary of State Condoleezza Rice, then UN head, Kofi Annan and Afghan President, Hamid Karzai. According to the US State Department, the conference “represented an historic milestone for the Afghan people and the international community” in which “Afghanistan sets its reconstruction and development priorities.”

The centerpiece of the conference was the endorsement of the “Afghanistan Compact”, which set out an ambitious programme for Afghan development, committing to specific and achievable goals in security, governance, economic and social development. The document also included an entire annex on “improving the effectiveness of aid”. At the conference, the international community pledged some $10 billion dollars in aid. For the photo, Karzai held a copy of the Compact proudly in his arms.

Now two years on a new report has shown that the Compact has been a complete failure and billions of aid money to the county has either been wasted or not even delivered. The report is published by the Agency Coordinating Body for Afghan Relief (ACBAR), which is a leading alliance of 94 national and international non-governmental organizations working in Afghanistan.

Its author Matt Waldman argues: “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.”

It seems the last two years of effort has been wasted. Even before the London conference in 2006, the politicians knew they had a problem with aid money. Despite the billions pouring into Afghanistan, there were already reports of wasted money, corruption and incompetence. Just two months before the London meeting, the Washington Post had run a high profile piece entitled: “A Rebuilding Plan Full of Cracks”.

The paper noted that in September 2002, the United States launched what would become an aggressive effort to build or refurbish as many as 1,000 schools and clinics by the end of 2004. However, Congressional figures showed that they managed to finish and hand back to the Afghan government only 40 schools by late 2005.

This story of failure was not unique. At the time, the World Bank director in Afghanistan Jean Mazurell estimated that between 35 to 40 percent of the aid was “badly spent”. “In Afghanistan the wastage of aid is sky-high: there is real looting going on, mainly by private enterprises. It is a scandal,” said Mazurell. “In 30 years of my career, I have never seen anything like it.”

Other stories of wasted money began to emerge. A 45 million contract with the UN’s Food and Agriculture Organisation to supply badly needed food for the country, included the proviso that four million dollars went to financing its headquarters in Rome.

The tragedy is that aid has often been ineffectual and wasted. Often it does not even leave the country it is being offered from, as it goes to the country’s own consultants. The fraud of aid never actually leaving rich countries has been known about for decades.

In the late eighties the British All-Party Parliamentary Foreign Affairs Committee had noted bluntly: “In practice, the purpose of bilateral aid programmes in the UK, as in most countries, has rarely been viewed as the purely selfless promotion of other peoples’ welfare. It has always been understood that such programmes should be carried out with British commercial and industrial interests and political interests in mind.”

As Ben Jackson wrote in his book “Poverty and the Planet” published in 1990, “Aid is commonly thought of as handing over money to Third World governments for development. In fact, aid largely consists of funding from Western governments for services, machines, technical experts and consultants to be supplied by companies in rich countries, frequently their own.” The bottom line was that “most aid money is actually spent in the rich world.” Of the $20 billion the World Bank handed out in 1988, $15 billion went to its own contractors or consultants.

There are many more cases like this. Another book written around that time, called “Lords of Poverty”, examined the “freewheeling lifestyles, power, prestige and corruption of the multibillion dollar aid business.” It found, for example, that in the African country of Tanzania, “over 80 per cent of all Canadian development assistance was tied to the procurement of Canadian goods and services.”

Another problem that has been known about for years is that rich countries often promise aid, but never actually deliver it, or if they do, what they eventually give is woefully short of what they promised.

The record of failed promises is long. After Hurricane Mitch hit Central America in 1998 only a third of pledged aid was delivered; after the floods in Mozambique in 2000 and the earthquake in Bam in Iran just over half was delivered. After the Tsunami hit Asia in December 2004, Max Lawson, from the development charity Oxfam noted that: “History has shown us pledge-making is consistently undervalued by governments delivering about half of what they actually promised.”

Nearly two years after the Tsunami, Oxfam’s worries remain true. According to the UN, America promised Indonesia over $400m, but delivered $70m. For Sri Lanka, Spain promised $60m, but delivered less than $1m. France pledged $79m and came up with just over $1m. The Chinese promised $301m and delivered just $1m. In the Maldives, Kuwait promised $10m but actually delivered nothing.

So has Afghanistan been any different? The tragic answer is no. ACBAR’s report is truly shocking. The international community has simply repeated well known mistakes. Firstly, despite the pledge made in the “Compact” the reasons for giving the money have been dictated by the big donors rather than responding to Afghan needs.

According to ACBAR, the donation of aid has “been heavily influenced by the political and military objectives of donors, especially the imperative to win so called ‘hearts and minds’.” Given to reflect expectations in donor countries, it is not what Afghan communities want and need. A significant proportion of aid to Afghanistan is being used to achieve military or political objectives, rather than help Afghans on the ground.

For example, over 70% of the Afghan population rely either directly or indirectly on agriculture for their livelihoods. However agriculture has received only $400-500 million since 2001, a tiny fraction of the multi-billion international aid budget to Afghanistan.
Secondly, there is a huge disparity between what America spends on war and what the international community spends on aid. The US military currently spends nearly $36 billion a year in the country, some $100 million a day; yet the average volume of aid spending by all donors since 2001 is just $7 million per day. Whilst the military budget is vast, 2.5 million Afghans face severe food insecurity, and one in five children still dies before five. Life expectancy is woefully low at 45 years.

Thirdly, over half of all aid to Afghanistan is tied, by which donors often require procurement of services or resources from their own countries. Rather than go to help Afghanistan, the money just lines the pockets of Western contractors and companies. So of the aid actually spent, a staggering 40% has returned to donor countries in corporate profits and consultant salaries.

The report notes: “Vast sums of aid are lost in corporate profits of contractors and sub-contractors, which can be as high as 50% on a single contract ... A vast amount of aid is absorbed by high salaries, with generous allowances, and other costs of expatriates working for consulting firms and contractors – each of whom costs $250,000–$500,000 a year.” In contrast, an Afghan civil servant is paid less than $1000 per year.

Often the contractors spend vast amounts of money on something that could be done much cheaper: For example, a road between the centre of Kabul and the international airport cost the US over $2.3 million per kilometer, at least four times the average cost of building a road in Afghanistan.

Finally, there is the inevitable short-fall of some $10 billion – equivalent to thirty times the annual national education budget. Just $15 billion in aid promised since 2001 has so far been spent. The list of culprits is long. The European Union has distributed less than two-thirds of its commitments for 2002-2008. The US and World Bank has distributed only half of their’s and the Asian Development Bank and India have disbursed only a third of what they promised.

Why do we just make the same mistakes time and again. As history repeats itself, the US and Britain wonder why they are losing the war…

Turn Off the Aid Tap

Ellie Keen — Wed, 21 Nov 2007 02:35:02 +0000

So far the UK government has responded to General Musharraf's crackdown in Pakistan with words but no action. In formulaic statements Gordon Brown and his ministers have called for the lifting of the state of emergency, the release of those arrested, an end to restrictions on the media and the holding of elections next January. But there is little sign of any willingness to put serious pressure on Musharraf to do any of this.

Annual UK economic aid to Pakistan has increased from £12.8m in 2001 to more than £100m this year. It is set to double over the next four years. On top of that, there's military and counter-terrorism assistance. Much of this aid package is conditioned on good performance on human rights and governance. Yet the aid tap remains firmly on.

Furthermore, the UK has signally avoided calling for the reinstatement of Iftikhar Chaudhry, the sacked chief justice who, along with his colleagues on the supreme court, has fought with persistence against Musharraf's one-man rule and sought to expose the abuses of his government. Apparently the UK is relaxed about the appointment of pliant supreme court judges who will rubberstamp an unconstitutional political process, which keeps Musharraf in power indefinitely.

The threat this week to suspend Pakistan from the Commonwealth unless it lifts the state of emergency by the time of the Commonwealth summit in Uganda on November 23 is little more than a symbolic gesture. Under Musharraf, Pakistan has already been suspended from the Commonwealth and the sky did not fall on his head.

The British government's rationale for a softly-softly approach is the same as its rationale for supporting the military dictator in the first place. As the foreign secretary, David Miliband, puts it, the UK is "very much aware of the terrorist threat with which the government of Pakistan has to grapple" and has reiterated its "support and determination to work in partnership with the Pakistani authorities to counter this menace".

The problem with this argument is that the military government in Pakistan is as much part of the terrorist problem as its solution. The style and methods of Musharraf's unaccountable military dictatorship, including widespread torture and disappearances, and a war of attrition against the Pakistani judiciary, have done nothing to reduce the influence of those who advocate terrorist violence in Pakistan. On the contrary, with every day that Musharraf delays a return to civilian rule, he stokes the flames of violent extremism in Pakistan and beyond.

Under Musharraf, the Taliban and other extremist groups have grown stronger, while Pakistani moderates and progressives have been persecuted. While Musharraf cracks down on liberal civil society and the media, his army is relinquishing more and more territory to Islamist militants in north-western Pakistan on the border with Afghanistan.

Just this month, scores of paramilitary troops and police surrendered their weapons to militants and retreated from yet another town, Kalam, in the Swat Valley of Pakistan's strategically important North West Frontier Province. The pro-Taliban cleric, Mullah Fazlullah, announced "victory" over his pirate FM radio station as militants hoisted their flag on government buildings and installations in the area.

Meanwhile, thousands of police and intelligence officers have been diverted from fighting terrorism to implementing a state of emergency whose main victims are the lawyers, human rights activists and progressive politicians who have spearheaded the restoration of civilian rule.

A return to some semblance of democratic governance and respect for the rule of law and human rights is no panacea, but it is a necessary condition for an effective strategy to stabilise Pakistan and neutralise the threat of terrorism. Aid spent propping up an abusive dictator in Pakistan is worse than a waste of taxpayers' money. It should be switched off.

To keep pumping economic and military assistance to Musharraf's military government in the current crisis sends a dangerous message that London does not care about the plight of the beleaguered democrats and moderates in Pakistan. Such a signal gives succour to abusive and unaccountable governments around the world, and hands another victory to the violent extremists in the battle for the hearts and minds of the Muslim world.

Turn Off the Aid Tap

Ellie Keen — Sat, 17 Nov 2007 00:30:39 +0000

The British government's rationale for a softly-softly approach is the same as its rationale for supporting the military dictator in the first place. As David Miliband puts it, the UK is "very much aware of the terrorist threat with which the government of Pakistan has to grapple" and has reiterated its "support and determination to work in partnership with the Pakistani authorities to counter this menace".