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Self-Reliance is the Key to Enduring Development in Afghanistan
By admin October 10, 2016

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Foreign aid is essential for creating sustainable infrastructure, institutions and industrial units in war-ravaged countries, and Afghanistan makes no exception to this case. The funds received are fundamental in the shorter term for the training, education, employment and skill development of the Afghan youth, which, according to the World Bank, represents more than half of the population of the country.

With its large pool of young people, Afghanistan has an incredible resource to establish a clear path out of poverty and enhance sustainable development initiatives. The Brussels Conference on Afghanistan, held on 4-5 October, represented an opportunity to discuss Afghanistan’s development issues and help the Afghan President Ashraf Ghani elected in 2014 to set out its vision and track record on reform. The conference was held by the international community to sign a new four-year US $12 billion aid package for the country.

While Afghanistan’s current reforms have led to some progress, the country is far from a direct route to prosperity – not only because of deep flaws in aid delivery and domestic governance. More specifically, the money received from public institutions was not delivered in a way that really promotes state-building, with international donors largely bypassing the Afghan government, in order to fund discrete stand-alone projects. From 2002 to 2010, 82 percent of the $56 billion in aid delivered to Afghanistan was spent through non-state institutions.

This approach was actually justified by the belief that the Afghan State was too weak and corrupt to use this money effectively. This statement is indeed not entirely wrong: patronage and graft remain rampant in Afghanistan, with the country attesting itself as one of the most corrupted in the world, according to Transparency International.

This was the legacy of President Hamid Karzai, who governed the country from 2004 to 2014 exchanging the most senior positions in the national government, as well as provincial governments, for political support, and often granted impunity to corrupt officials. Moreover, public institutions spent more than half of the total aid to the security sector between 2002 and 2010; nonetheless, after the troops withdrawal from the country the situation deteriorated greatly.

Consequently, the aid focused on non-state institutions created a private sector for public goods, which, in fiscal terms, surpasses the actual government of Afghanistan. This largely exacerbated costs and undermined the effectiveness of the Sate’s institutions, which could not re-direct funds in the most important sectors for Afghanistan’ development: only 3 percent of total aid was spent in education, and it doesn’t come as a surprise that 40 percent of children of primary- and lower-secondary school age are not in school.

Ghani’s government can accelerate the pace of progress by introducing a much more meritocratic system of civil-service recruitment and promotion. A zero-tolerance policy on corruption – especially in the judiciary and the finance, commerce, mining, police, health and education ministries – is essential. Furthermore, to improve accountability and increase government revenues, the tax system should be reformed and strengthened. Some progresses have already been done, but stronger efforts are needed to fasten the process.

The final piece of the Afghan puzzle will be put in place when the government and donors channel aid toward investment in programs with long-term objectives; priority should be given to investment in human capital, particularly education and health, and in job-creating sectors like agriculture.

Afghanistan’s transition to a stable and functioning democracy will depend on more than just external financial assistance and being a donor-dependent economy; self-reliance is key to lay the foundations for a dynamic economy and bring Afghanistan on the path to prosperity after decades of war and instability.

 

For more information:

A Path to Self-Reliance for Afghanistan

Money Pit: The Monstrous Failure of US Aid to Afghanistan

With troops set to withdraw, what’s in store for Afghanistan?

Afghanistan must refocus efforts to fight against corruption to safeguard US$12 billion in new aid

Brussels Conference on Afghanistan, 4-5 October 2016, UNAMA


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