ARIF AYUB To address the general impression that aid to Afghanistan has been inefficient, wasteful and ineffective ACBAR (Agency Coordinating Body for Afghan Relief) and OXFAM with ADB funding have prepared a detailed report to highlight the shortcomings in aid effectiveness in Afghanistan. The average volume of aid has been $57 per capita compared to Bosnia at $679 per capita and East Timor at $233 per capita. $15 billion has been spent so far out of which 40 percent has returned to donor countries in profits and salaries. Expatriate consultants cost $250000-$500000 annually (200-400 times the salary of an Afghan civil servant). Disbursement is also a problem with nearly half the commitments failing to materialise. Provincial Reconstruction Teams (PRTs) have also come in for criticism because of diverting resources which could have been devoted to civilian development activities and for undermining the neutrality of the NGOs who are being considered by the Afghans as part of the military effort. There is excessive donor bureaucracy and limited transparency or accountability. The reason why foreign aid is crucial to Afghanistan is that it accounts for 50 percent of the Afghan legal economy and 90 percent of all public expenditure. Successful delivery of aid is therefore important in counteracting the vicious cycle of poverty and insecurity which are significantly reinforcing factors in driving the insurgency. Disbursement is also a serious problem with the US having disbursed by 2008 only $5 billion out of the $23 billion pledged (22 percent). Only China, ADB, World Bank and Saudi Arabia were able to spend about one-third of their commitments. 60 percent of the total of $25 billion of aid pledged was neither committed nor disbursed. The result has been 2.5 million Afghans getting food and security benefits and the majority of Afghans living in rural areas enjoying only minimal social and economic progress. Technical assistance takes 25 percent of the aid and according to the World Bank "tends to be donor driven, high cost with little effective involvement from national decision makers and only marginal impact in terms of lasting capacity building." There are immense disparities in funding made available for the provinces, with the most insecure provinces (Nimroz , Helmand, Zabul, Kandahar and Uruzgan) obtaining $200 per person creating perverse incentives as insecurity is now perceived by the Afghans as attracting more aid; leading to an increase in insecurity to the normally quieter areas. If PRT funds are included Kabul at $600 per capita and Panjsher at $685 per capita reinforce this sense of discrimination in the other provinces. According to the US Centre for Public Integrity, the US government has awarded major contracts in Afghanistan to the following five favourites: KBR, The Luis Berger Group, Chemonics International, Bearing Point and DynCorp International. In some contracts there are five layers of international and national subcontractors and procurement and tendering processes are rarely transparent. For example, in the Khair Khana hospital UNFPA was given $2.2 million for the work which was subcontracted to the UN Office for Project Services (UNOPS) who subcontracted to an Italian organisation, and who further subcontracted to an Afghan company. The result was that only half of the budget was spent on the project and the quality was so bad that it required further reconstruction. According to Integrity Watch Afghanistan, the road from Kabul to the airport cost over $2.4 million per kilometre, four times the average cost of road construction in Afghanistan. ACBAR and OXFAM have given a long list of recommendations for improving the aid framework in Afghanistan including; a dramatic increase in aid dispersed, a more equitable distribution of assistance, creation of indicators of aid effectiveness, ensuring monitoring, accountability and transparency including details of contractors fees, profit margins, procurement policies and tendering procedures, improving the working of the Afghan government, coordinating plans by the donors and the Afghan government keeping in view its (Afghan) government's priorities, streamlining of technical assistance and excessive costs and profits, PRTs to revert to their original mandate of securing the environment in which aid groups could work. However, it remains to be seen how the donors react to the report and recommendations. We faced a similar dilemma in the Foreign Office when the Afghan Trade Development Cell (ATDC) brainchild of Major General Nasirullah Babar, was transferred from the Interior Ministry and tasked with the reconstruction of roads in Afghanistan. Unfortunately, the annual budget provided was only $4 million. This basically showed the limitation of Pakistan trying to deal with Afghan problems on its own. NHA had estimated that the 30-foot wide road would require $1 million per kilometre. Instead ATDC under Brig Anwar was able to reconstruct 40 kilometres from Kabul to Kandahar. This was done by providing the Afghans with all the construction equipment required at a discount of nearly 70 percent by purchasing second hand in Dubai and by purchasing the bitumen in Iran again at a discount. Since the original road was being only re-carpeted there was no need for expensive soil impaction. The Taliban managed to motivate the villagers near whose land the road was passing to provide labour free of cost. This example showed that it was not necessary to construct an expensive new road but merely repaving was sufficient to make the track road worthy. Moreover, it was important for the Afghans to be involved in the selection, planning and implementation of the entire project which was a priority for them and also mutually beneficial for both countries. The provision of the aid as commodity assistance also made it project-specific and difficult for anyone to divert the funds. We had a similar beneficial experience with the rehabilitation of the Russian supplied olive orchids in Jalalabad where an expenditure of Rs 1 crore was estimated to be sufficient to rehabilitate the entire project. Only pruning and spraying of pesticides was required and payback was expected to be in one year after the next harvest as all the trees were mature. The advantage for Pakistan was the upgrading of varieties for its own olive cultivation. Unfortunately, the war intervened and the project could not be completed. Nevertheless, both examples show the importance of involving and trusting the Afghans in the development of their country. The writer is a former ambassador.