Afghanistan's Development Debacle

| Wed Jan. 13, 2010 8:00 AM EST

Over the years, the US and its international partners have directed an impressive amount of development funding to Afghanistan. Not so impressive: their efforts to ensure billions in aid is actually reaching the intended targets. Afghanistan's foreign minister, Rangeen Dadfar Spanta, once estimated that only about $10 or $20 out of every $100 in US development assistance ends up filtering down to the communities it was meant for. Where does the rest go? Some is eaten up by unwieldy chains of contractors and subcontractors, which take their cut and pass the work on until there is little money left to actually complete the projects they were hired to carry out. Some is siphoned off by corrupt officials and contractors. Some—well, we're not entirely sure where it went. Meanwhile, Afghans have complained bitterly about the state of development efforts. In some cases, the promised aid simply hasn't materialized—or, if it has, the result has been shoddily constructed (yet high-priced) projects that are basically useless.

Along with an influx of troops, the Obama administration is planning a surge of civilian personnel and funding to address Afghanistan's formidable development challenges. That's the good news. Here's the bad: part of this effort will likely be overseen and coordinated by a UN division that has been plagued by allegations of waste and mismanagement and the US development agency that has turned a blind eye to its transgressions.

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A little-noticed report [PDF] by the Government Accountability Office, highlighted on Monday by Fox News, paints a bleak picture of what Obama's civilian surge is up against. It focuses on the US Agency for International Development's oversight of millions in reconstruction projects carried out by the UN's Office of Project Services (UNOPS), which has overseen efforts to build schools and medical clinics, rehab secondary roads, and construct bridges and hydroelectric plants. Here's the gist:

Among other things, USAID apparently overlooked a growing stack of U.N. audits and investigations that pointed to fraud, mismanagement and lack of internal financial controls by UNOPS in Afghanistan, even as the U.S. agency continued to shovel money in UNOPS’s direction. So did other branches of the U.S. government, to the tune of an additional $100 million.

In a stunning number of cases, however, USAID also ignored its own oversight procedures and did not even insist that contracts with UNOPS enshrine the agency’s uncontested right to access financial records that would tell how the U.S. government money was spent. Consequently those records were never examined.

In other cases, it looked like legal loopholes were created to make sure UNOPS got to keep its financial records out of USAID’s reach.

Worse, the oversight disaster may still not be fixed—even as UNOPS, claiming that it has changed its ways, may get a bigger role in Afghanistan, financed with dollops of U.S. money, in the months and years ahead.

UNOPS has had a very troubled track record in Afghanistan. To begin with, the American official who directed its operations in the country from 2002 to 2006, Gary Helseth, stands accused of diverting around a half million dollars in development funds to bankroll his own high-flying lifestyle—including renovating his home in Kabul, splurging on first-class travel and fancy restaurants, and throwing lavish parties. And an investigation [PDF] by USAID's Inspector General, obtained by USA Today in April, substantiated a host of serious allegations against UNOPS and its parent agency, the UN Development Program. "The U.N. delivered shoddy work, diverted money to other countries and then stonewalled U.S. efforts to figure out what happened," the paper reported

Despite UNOPS' well documented shortcomings, ramped up development efforts in Afghanistan raise the likelihood that the agency may take on an even greater role in managing reconstruction projects. If that's the case, the Obama adminstation should be planning for a surge of not just manpower and money, but oversight.

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