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<a href="http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2006/09/03//cgi-bin/article.cgi?file=/c/a/2006/09/03/INGR0KRGMF1.DTL">
How U.S. dollars disappear in Afghanistan: quickly and thoroughly</a>
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<dd><font size=1>- Ann Jones<br>
<dd>Sunday, September 3, 2006 <br><br>
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<dd><font size=3>Remember when peaceful, democratic, reconstructed
Afghanistan was advertised as the exemplar for the extreme makeover of
Iraq? In August 2002, Secretary of Defense Donald Rumsfeld was already
proclaiming the new Afghanistan "a breathtaking accomplishment"
and "a successful model of what could happen to Iraq." As
everybody now knows, the model isn't working in Iraq. So we shouldn't be
surprised to learn that it's not working in Afghanistan either. <br><br>
<dd>To understand the failure -- and fraud -- of reconstruction in
Afghanistan, you have to take a look at the peculiar system of U.S. aid
for international development. During the past five years, the United
States 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. <br><br>
<dd>The official answer is that donor funds are lost to Afghan
corruption. But shady Afghans, accustomed to two-bit bribes, are learning
about big bucks from the masters of the world. <br><br>
<dd>Other answers appear in a fact-packed report issued in June 2005 by
Action Aid, a widely respected nongovernmental organization headquartered
in Johannesburg. The report studies development aid given by all
countries worldwide and says that only part of it -- maybe 40 percent --
is real. The rest is phantom aid. That is, it never shows up in recipient
countries at all. <br><br>
<dd>Some of it doesn't even exist except as an accounting item, as when
countries count debt relief or the construction costs of a fancy new
embassy in the aid column. A lot of it never leaves home; paychecks for
American "experts" under contract to USAID go directly to their
U.S. banks. Much of the money is thrown away on "overpriced and
ineffective technical assistance," such as those hot-shot American
experts, the report said. And big chunks are tied to the donor, which
means that the recipient is obliged to use the money to buy products from
the donor country, even when -- especially when -- the same goods are
available cheaper at home. <br><br>
<dd>To no one's surprise, the United States easily outstrips other
nations at most of these scams, making it second only to France as the
world's biggest purveyor of phantom aid. Fully 47 percent of U.S.
development aid is lavished on overpriced technical assistance. By
comparison, only 4 percent of Sweden's aid budget goes to technical
assistance, while Luxembourg and Ireland lay out only 2 percent.
<br><br>
<dd>As for tying aid to the purchase of donor-made products, Sweden and
Norway don't do it at all. Neither do Ireland and the United Kingdom. But
70 percent of U.S. aid is contingent upon the recipient spending it on
American stuff, including especially American-made armaments. The upshot
is that 86 cents of every dollar of U.S. aid is phantom aid. <br><br>
<dd>According to targets set years ago by the United Nations and agreed
to by almost every country in the world, rich countries should give 0.7
percent of their national income in annual aid to poor ones. So far, only
the Scandinavian countries, the Netherlands and Luxembourg (with real aid
at 0.65 percent of its national income) even come close. <br><br>
<dd>At the other end of the scale, the United States spends a paltry 0.02
percent of national income on real aid, which works out to an annual
contribution of $8 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. <br><br>
<dd>The Bush administration often deliberately misrepresents its aid
program for domestic consumption. <br><br>
<dd>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, she pledged
that the United States would give an additional $17.7 million to support
education in Afghanistan. But that grant had been announced before; and
it was not for Afghan education (or women and children) at all but for a
new private, for-profit American University of Afghanistan. (How a
private university comes to be supported by public tax dollars and the
Army Corps of Engineers is another peculiarity of Bush aid.) <br><br>
<dd>Ashraf Ghani, former finance minister of Afghanistan and president of
Kabul University, complained, "You cannot support private education
and ignore public education." But that's typical of American aid.
Having set up a government in Afghanistan, the United States stiffs it,
preferring to channel aid money to private American contractors.
Increasingly privatized, U.S. aid becomes just one more mechanism for
transferring tax dollars to the pockets of rich Americans. <br><br>
<dd>In 2001, Andrew Natsios, then head of USAID, cited foreign aid as
"a key foreign policy instrument" designed to help other
countries "become better markets for U.S. exports." <br><br>
<dd>To guarantee that mission, the State Department recently took over
the formerly semi-autonomous aid agency. And because the aim of U.S. aid
is to make the world safe for U.S. business, USAID now cuts in business
from the start. It sends out requests for proposals to the short list of
usual suspects and awards contracts to those bidders currently in favor.
(Election time kickbacks influence the list of favorites.) Sometimes it
invites only one contractor to apply, the same efficient procedure that
made Halliburton so notorious and so profitable in Iraq. <br><br>
<dd>The criteria for selection of contractors have little or nothing to
do with conditions in the recipient country, and they are not exactly
what you would call transparent. <br><br>
<dd>Take, for example, the case of the Kabul-Kandahar Highway, featured
on the USAID Web site as a proud accomplishment. (In five years, it's the
only accomplishment in highway building in Afghanistan -- which is one
better than the U.S. record building power stations, water systems, sewer
systems or dams.) The highway was also featured in the Kabul Weekly
newspaper in March 2005 under the headline, "Millions Wasted on
Second-Rate Roads." <br><br>
<dd>Afghan journalist Mirwais Harooni reported that even though other
international companies had been ready to rebuild the highway for
$250,000 per kilometer, the 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
schools.) <br><br>
<dd>Berger subcontracted 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 can see that it is already falling apart.
(Former Minister of Planning Ramazan Bashardost complained that when it
came to building roads, the Taliban did a better job.) <br><br>
<dd>Now, in a move certain to tank President Hamid Karzai's approval
ratings and further endanger U.S. and NATO troops in the area, the United
States has pressured his government to turn this "gift of the people
of the United States" into a toll road and collect $20 a month from
Afghan drivers. In this way, according to U.S. 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. <br><br>
<dd>Is it any wonder that foreign aid seems to ordinary Afghans to be
something only foreigners enjoy? <br><br>
<dd>At one end of the infamous highway, in Kabul, Afghans disapprove of
the fancy restaurants where foreigners gather -- men and women together
-- to drink alcohol and carry on, and plunge half-naked into swimming
pools. They object to the brothels -- 80 of them by 2005 -- that house
women brought in to serve foreign men. <br><br>
<dd>They complain that half the capital city lies in ruins, that many
people still live in tents, that thousands can't find jobs, that children
go hungry, that schools are overcrowded and hospitals dirty, that women
in tattered burqas still beg in the streets and turn to prostitution,
that children are kidnapped and sold into slavery or murdered for their
kidneys or their eyes. <br><br>
<dd>They wonder where the promised aid money went and what the puppet
government can do. <br><br>
<dd>Ann Jones is the author of "Kabul in Winter," a memoir of
Afghanistan, where she lived for several years. A longer version of this
piece appears at www. tomdispatch.com. Contact us at
<a href="mailto:insight@sfchronicle.com">insight@sfchronicle.com</a>.</i>
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