Afghan Aid Faces Hurdles

From this capital, Afghanistan looks like it’s recovering fast from a generation of war.

Incoming flights are full of aid workers and entrepreneurs armed with laptops, eager to pitch reconstruction projects. So many people are talking on cell phones that the system is chronically overloaded. Where once there were only dingy kebab houses, restaurateurs are now serving Italian, Thai, Chinese and Indian dishes to the new dealmakers and administrators.

But the bustle in Kabul masks mounting troubles elsewhere in Afghanistan. So far, the reconstruction effort is showing only scattered progress.

In part, it has been hampered by mismanaged projects, confused priorities and plain theft, aid officials and experts say. And in part, it is slowed by sheer need in a country that is struggling to emerge from a generation of war.

Overall, roughly half of the $4.5 billion in promised foreign aid grants has been spent, but the money has bought little more than a mirage of success, they say.

While plans for new hotels, clinics and even a new city are winning approval and initial funding -- attracting entrepreneurs and others -- many schools are closing for lack of money and farmers are struggling as war-damaged irrigation systems remain in disrepair. Many Afghans lack basic services such as clean water and sewer systems.

Such problems threaten to destabilize the interim government of President Hamid Karzai and undermine goodwill toward the United States following its overthrow of the oppressive Taliban regime in 2001. And as Iraq draws attention and money away, time to get things right is running out, experts warn.

“Our biggest fear is that this opportunity will be lost because pressures for the appearance of success, particularly internationally, will lead to money being spent in the wrong way, on the wrong kinds of investments,” said Paul O’Brien, advocacy coordinator for the U.S.-based aid agency CARE International. “What we need is long-term, sustainable benefit for Afghan people so that we help to create an environment where they can rebuild their country.”

The U.S. has paid $60 million to build schools, provide textbooks and train teachers. However, Afghanistan’s cash-poor government is responsible for paying the teachers -- and it doesn’t have the money. Teachers are quitting and schools closing because warlords who helped the U.S. military during the 2001 war -- and received money and weapons in return -- are resisting Karzai’s order to hand over an estimated $800 million in annual tax revenue.

“We have to worry about our priorities if we can’t find enough money to pay teachers $100 a month,” said Paul Barker, CARE’s director in Afghanistan.

In March, Washington agreed to give $35 million in financing and political risk insurance to Hyatt International to construct a five-star hotel where the legions of entrepreneurs and aid officials can stay when they visit Kabul.

Yet the city’s estimated 3 million people live without such basics as a sewer system, and there is no plan to build one.

The Afghan government has borrowed $3.4 million from the Asian Development Bank to prepare the ground for a $400-million city of at least 750,000 people, to be built on disputed government land in semi-desert territory northeast of Kabul. Yet it doesn’t know if any donors or investors will pay to complete the city or if there will be enough clean water and jobs for residents. When crews tried to drill test wells recently, militia members who claim the land is theirs opened fire. About 1,600 foreign and local aid agencies are working in Afghanistan, more than three times the number under the Taliban. But the government finds it difficult to weed out the bad from the good.

It shut down the Peace Humanitarian Agency in July and arrested its Afghan head on suspicion that the organization, which claimed to be based in the Netherlands, was ripping off aid money, said Abdul Qayom, who heads the office overseeing nongovernmental organizations, or NGOs. It’s difficult to know how many may be stealing, he said.

“There are some ‘Mafia’ NGOs that have heard on the news there is so much opportunity in Afghanistan because of all the donations, so they have just showed up,” Qayom said. “Our policy in the government of Afghanistan is that whoever comes can have registration.

“It’s not easy for us to prove the identity of any NGO until it is implementing a project,” he added. “There are only 18 people in this department, including maids and office boys.”

Reconstruction Minister Amin Farhang is investing a lot of faith in the promise of private capital. He is enthusiastic about a $2-billion farming and forestry project proposed by Permanente Corp., a new company headed by a Los Angeles entrepreneur, Marc Seidner.

Seidner and his mainly Afghan American partners say that over the next decade they can transform vast dust-blown wastelands into rich forests, chicken and turkey farms and fruit and nut orchards that could generate about $6 billion a year.

A commission of Afghan government ministers approved Seidner’s project in principle on July 30, without calling for competitive bids. His company now has to do a feasibility study, but Farhang said he is confident the plan will be implemented.

Seidner has never managed an agricultural mega-project or been to Afghanistan, where the best intentions must withstand a brutal climate, rampant corruption, warlords and a Taliban insurgency.

His small accounting-software firm, FlexWare International, and FibreForm Wood Products Inc., a company he once ran in partnership with his father, ran up unpaid bills and taxes in the U.S. totaling more than $57,000. Several tax liens are registered against the two companies, filed from 1998 to 2003 and totaling $12,000.

Two U.S. companies got court orders in 2001 for FibreForm to pay more than $45,000 in unpaid bills. Seidner blamed the difficulties on partners in joint ventures.

“We had to lean on some of our former partners to deal with their own bills when they parted company, so we’ve been settling up all of that,” Seidner said in a telephone interview.

Seidner declined to disclose details of how he and his new partners will implement or finance the project until a contract is signed with the Afghan government.

In March, the Bush administration doubled to $100 million the total line of credit that the Overseas Private Investment Corp. offers to private U.S. investors in Afghanistan. More than a third of that has been committed to the Hyatt hotel project in Kabul. OPIC, a federal agency with a mandate to promote U.S. foreign policy goals, can support projects with direct loans, loan guarantees and risk insurance, which makes it easier to attract private creditors.

President Bush has repeatedly promised that Afghanistan will not be forgotten, as it largely was before the Sept. 11 attacks. But Afghanistan’s government and international aid agencies continue to complain that the effort is long on delays and short on money.

Foreign governments have promised aid grants totaling just under $4.5 billion over five years -- less than a third of what the Afghan government says it needs to reconstruct the country. And the amount of promised aid drops sharply over the next three years, from $910 million in 2004 to only $391 million in 2006.

According to an Afghan government report released in April, 45% of the aid has been spent on immediate humanitarian needs, while only 29% went to projects such as rebuilding roads, schools and hospitals.

A senior State Department official said the United States has allocated $1.8 billion for aid to Afghanistan in the past two years. About half of that money has been spent.

As complaints about the slow recovery mount, Washington is considering awarding up to $1 billion more over the next 10 months.

In Washington, State Department spokesman Richard Boucher told reporters July 28 that any new aid would be used to speed up reconstruction efforts. “These projects that we undertake with new money, with this other money, will be designed to actually do real things on the ground,” Boucher said.

Meanwhile, millions of farmers are struggling to survive because traditional systems destroyed by war and neglect are only slowly being repaired.

Taj Mohammed Khan, 88, is a wakil, or local leader, elected to represent villages outside Kapisa, north of Kabul. Since the fall of the Taliban in late 2001, his people have seen little improvement in their lives, he said.

Aid workers delivered more than 100 pounds of wheat seeds last year to replenish the stocks villagers ate to survive a drought. They must repay the loan in kind after harvest.

A local school has reopened, but there are no desks and not enough teachers or classroom space, so children sit on the floor and attend class in half-day shifts. Another aid project is building a health clinic while, Khan complained, the main source of illness remains: There isn’t enough clean water.

That problem could be fixed by digging wells and repairing irrigation canals and dams that, for generations, have channeled water from the Panjshir River about 12 miles away. The collapsing system can’t deliver enough water, so while crops wither, farmers must wait for their turn to open the small, iron gates that divert the flow into their fields. Militia commanders and their friends get water when they want, Khan said.

“Nobody can stop them,” Khan said. “We are not powerful enough to deal with them. If you try, they will beat you with the butt of a rifle and tell you to go away.” Given the choice between the clinic under construction and a reliable water supply, Khan would pick the latter.

“If there is no hospital here, we will just go to Kabul for treatment,” he said. “But we can’t go to Kabul for water. And if we die from thirst, what will we do with the hospital?”