Afghanistan: NGOs baking aid cake, eating it
The National Business Review (New Zealand) / April
So-called NGOs -- non-governmental organisations
that range from charities to "not-for-profit"
infrastructure providers -- are ballooning in
Afghanistan, raising fears that they are consuming far
more of aid budgets than they should, while delivering
far less than they promise.
In recent days, several of the country's top
leaders -- and its legislature -- have all started
talking tough about the issue.
According to government figures released last week,
only 23 per cent of several billion dollars sent for
international assistance is directly administered by
the Afghan government, with the balance in the hands
of humanitarian aid agencies or private contractors.
That cash tap has seen the number of NGOs in the
country balloon from a few hundred three years ago to
about 2,400, according to the World Bank.
And yet there has been precious little bang for all
those bucks, leading to widespread belief that the
NGOs are spending too much for too little -- and
engaging in corrupt practices along the way.
The problem is so pervasive that Afghan President
Hamid Karzai and his senior officials are asking
international aid donors to switch targets and hand
the money directly over to the government.
The World Bank reported this week that last week
the Afghan cabinet had approved a law that barring
NGOs from bidding for government contracts. The NGOs
that would have been dispossessed by the new law
raised hell and President Karzai agreed to review it
but said the law was the product of "serious
concern…that some NGOs were responsible for widespread
corruption and misuse of public funds".
NGO representatives said the problem was down to
nomenclature and that the government has confused
entrepreneurial organisations registering themselves
disingenuously as non-profit, with legitimate NGOs.
But it is not clear that the new government could
absorb and channel all the relief money bound for
Afghanistan any more effectively than the NGOs.
Praful Patel, president of the World Bank for South
Asia, said lack of skills within Afghan ministries and
departments was "worrying." "Indeed, there is some
evidence from the health sector in Afghanistan that
contracting out delivery of basic health services to
NGOs produces accountability and equitable service
provisions at competitive costs," Mr Patel said.
Not surprisingly, UN special representative Jean
Arnault also claimed aid agencies had a vital role to
Meanwhile, the country's per capita GDP remains at
about $US200 a year, the World Bank said, despite
President Karzai's election promise to see it reach
$US500 per year within five years. The CIA country
brief gives a more optimistic view of the population's
personal wealth, saying that based on 2003 data the
per capita purchasing power parity was $US.700
In part low personal income figures -- and
regardless of source, they are all low -- can be put
down to the focus of relief on enablement issues such
as security and basic humanitarian problems.
Turning the well known proverb on its head, donors
have been providing fish rather than fish hooks.
But aid is beginning to turn to larger, wealth
generating projects such as building core
infrastructure and nurturing the nascent private
sector -- agendas NGOs and the UN are not well
prepared to advance.
The US, already the largest aid sponsor to
Afghanistan, appears undistressed by the dearth of
developments to date and said it would boost donations
from $US2.5 billion in 2004 to $US5 billion this year,
although some of that money would require
Much of the new aid will go, however, for those
larger scope projects that enable the generation of
income, and even wealth.
Although a minor player in the Afghanistan
development effort, New Zealand maintains a Provincial
Reconstruction Team (PRT) based in Bamian, which has
cost the government more than $80 million (NZ) over
three years, according to Minister of Defence Mark
Mr Burton was at the aid conference in Afghanistan
this week and met with President Karzai, senior
members of his cabinet, UN Secretary General Special
Representative Jean Arnault, the Commander Combined
Forces - Afghanistan Lieutenant General Barno, NATO
Senior Representative in Afghanistan Hikmet Cetin and
Major General Kamiya.
He affirmed New Zealand's on-going commitment to
the effort -- which has already seen $8 million (NZ)
expended and another $7 million (NZ) pumped into the
pipeline, and said it had and would continue to focus
on "security and humanitarian interventions."
Like many other governments, New Zealand's aid
funding is dispersed through NGOs and UN agencies, as
well as its own PRT.
By at least some measures, all that aid may be
doing some good in spite of rumoured profiteering and
Afghanistan's economic growth hit 29 per cent last
year, for example -- but like many things, metrics can
be deceiving. In this case, they mask the fact that
the gains were from a starting point that was almost
Just giving every Afghan citizen $US100 would raise
the country's per capita GDP by 50 per cent, based on
World Bank estimates of per capita GDP -- and, with
28.5 million people, that equates to last year's US