Canadian International Development Agency

Aid’s corrupting influence in Afghanistan should be considered

Probe International

November 20, 2009

A recent article from Canwest details the sharpening criticism facing Afghanistan President Hamid Karzai from foreign leaders, including U.S. President Barack Obama, British Prime Minister Gordon Brown and Prime Minister Stephen Harper, concerning the country’s rampant corruption. But the article does little to confront the ugly reality that the massive amount of foreign aid entering Afghanistan may be playing a crucial role in supporting rampant corruption.

Critics, such as Probe International, have for decades been documenting the corrupting influence of foreign aid. Most recently, Dambisa Moyo, in her book “Dead Aid” details the corrupting influence that aid has had on the economic growth of the African continent.

“More than $2-trillion of foreign aid has been transferred from rich countries to poor over the past fifty years—Africa the biggest recipient, by far,” she writes.

“Aid has not lived up to expectations,” she points out. “It remains at the heart of the development agenda, despite the fact that there are very compelling reasons to show that it perpetuates the cycle of poverty and derails sustainable economic growth.”

And according to Moyo, aid is often one of the major contributors to corrupt governments across the continent. “The list of corrupt practices in Africa is almost endless,” she says. “But the point about corruption in Africa is not that it exists: the point is that aid is one of its greatest aides.” 

There are increasing concerns that Afghanistan may be heading down the path of aid dependency, and subsequent corruption, that has derailed the Africa continent for decades. Since the American-led invasion of the country in 2002, Congress has poured more than $39-billion dollars in reconstruction funds into the country. If funding requests are approved for 2010, that number will rise to $50-billion—meaning there is more foreign aid entering the country, from the US alone, than the estimated worth of its $10-billion GDP.

Read the story from Canwest below.


Calls to crush Afghan corruption rejected as unrealistic
Corruption ‘a multi-headed monster’

By Peter O’Neil, Europe Correspondent , Canwest News Service   November 18, 2009

Afghan President Hamid Karzai will deliver a speech Thursday to launch his second five-year term in office under enormous pressure to crack down on the rampant corruption that is often described as the biggest barrier to a successful counter-insurgency effort in his country.

U.S. President Barack Obama, British Prime Minister Gordon Brown and Prime Minister Stephen Harper have led a chorus declaring that western citizens are losing patience with the sacrifice of blood and billions in tax dollars to prop up a regime plagued by graft.

But corruption experts and a former U.S. ambassador told Canwest News Service that the public’s expectations are being set dangerously high.

“Karzai’s vow to eradicate corruption is of course not credible. Corruption is not subject to eradication, and vows don’t count,” said former World Bank corruption specialist Daniel Kaufmann.

Resolute deeds, like reforming the police, passing transparency laws, and promoting clean ministers, mean far more than grandiose commissions and toughly worded decrees, said Kaufmann, now with the Brookings Institution in Washington.

Karzai, though at times infuriated by western demands for a crackdown, has recently tried to soothe the angst after his fraud-plagued election victory in August.

“We will strive, by any means possible, to eradicate this stain” of corruption, Karzai said earlier this month.

But declarations to “eradicate” the routine bribery demands involving senior and junior government officials, police and others in a society plagued by war, poverty and a booming heroin trade seem impossibly ambitious, experts say.

“I’m not sure it can happen in our lifetimes,” said Transparency International chair Huguette Labelle, the former head of the Canadian International Development Agency.

“Corruption, wherever it happens, is a multi-headed monster. It has tentacles all over the place (and) it is highly resilient.”

Labelle said the depth of corruption in countries like Afghanistan must be tackled with incremental steps, and that efforts can’t be abandoned without risking complete anarchy.

“We cannot turn our backs to an Afghanistan, because if we do the frontiers don’t exist between our countries,” she said, referring to the common exports from failed states, such as terrorism, drugs and refugees.

Transparency International released a ranking of 180 countries Wednesday that showed Afghanistan is perceived as the second-most corrupt country analyzed, barely ahead of the failed state of Somalia.

The TI index, when matched against the United Nations Human Development Index of 182 countries on measurements such as literacy, life expectancy and standard of living, shows a remarkable correlation between corruption and lack of development.

Afghanistan, for instance, ranked 181st in the UN human development analysis.

But poverty is only one factor. A 2008 TI research paper, after looking at organized-crime-linked corruption in Nigeria, Mexico and Colombia, said Afghanistan faces more daunting and “unprecedented” challenges.

Those three countries and Hong Kong, which in recent years has ended its status as a major drug centre, have been “able to rely, to a certain extent, on contextual factors that created a supportive environment for the fight against corruption, including a tradition of democratic processes, reasonably functioning institutions, more homogeneous social fabrics, decent public wages,” the report stated.

Those factors “make the local circumstances difficult to compare to Afghanistan,” a country that some soldiers say is so primitive they feel they’re fighting in biblical times.

The study said the drug trade in particular breeds on the weak government institutions, political insecurity, chaos and endemic corruption that come with decades of war.

“When people go for years not knowing if they’ll still have a job the next day, let alone a pension, they look for any way they can to protect their families in the short term,” said Ronald Neumann, author of the newly released The Other War: Winning and Losing in Afghanistan.

“We would be more sensible to concentrate on a few areas and bear down on them hard.”

Neumann, the U.S. ambassador in Kabul from 2005 to 2007, said Karzai and the West should concentrate on narrow areas, like reform of the interior ministry that is responsible for drivers licences and other documents.

He also said Karzai shouldn’t be pressured to punish rather than reward his unsavory cronies.

“Let’s be realistic. Political debts get paid in all societies,” he said, noting the Obama administration’s appointment of a huge number of his financial supporters to ambassadors’ posts.

Alexandra Wrage, a Vancouver-born consultant now based in Maryland, said Afghanistan has to do more than rely on Karzai to crack down on corruption, given suspicions he and his cronies are beneficiaries of graft.

“Asking governments in power not to enrich themselves is tough. You need a robust judiciary and civil society, and we just don’t have that in Afghanistan,” said Wrage, author of Bribery and Extortion: Undermining Business, Governments and Security.

TI’s Labelle said any Karzai initiative, such as an anti-corruption agency, will have to be clearly independent from him to be seen as legitimate.

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