U.S. aid often misses targets in Afghanistan

Reese Erlich, Chronicle Foreign Service

Sunday, October 4, 2009
Zack Lea is Afghanistan country director for Roots of Pea... Afghanistan (Chronicle Graphic) Grapes are stored in crates at a market center built by R...

(10-04) 04:00 PDT Kabul - --

When built in 2004, the agricultural storage facility in Nangarhar province was supposed to win the hearts and minds of the Afghan people. The U.S. government paid for its construction along with several other so-called "market centers" that would enable farmers to store crops and boost exports to nearby Pakistan.

But construction and design flaws left it unusable, one of many dozens of similar failures in the country, critics say. Opponents say the Nangarhar project is just one example of massive waste of taxpayer dollars in aid programs since the U.S.-led invasion ousted the Taliban government in 2001.

In 2003, the U.S. government believed local farmers could safely store and transport their crops and earn more money by exporting to neighboring countries. Building 145 market centers would also help swing Afghan public support behind the U.S. war effort, Bush administration officials argued at the time.

A Washington, D.C., company, Chemonics International, won the bid for the $145 million program - known as Rebuilding Agricultural Markets Program, or RAMP - that ran from 2003 to 2006.

Chemonics then subcontracted the training and construction work to other Americans, who in turn subcontracted to numerous Afghan companies who did the work. At each level, the subcontractors deducted costs for salaries, office expenses and security, according to Afzal Rashid, a former senior adviser for the ministry of finance who now lives in Sacramento.

Only a small percentage of the original RAMP contract money actually reached farmers and other intended recipients, Rashid and other critics say. The exact percentage may never be known because neither Chemonics nor the U.S. government tracks such figures. Moreover, opponents note, many constructed market centers have deteriorated or are not being used for their original purpose.

In an exclusive interview with The Chronicle, Afghanistan's foreign minister, Rangeen Dadfar Spanta, sharply criticized how U.S. aid is spent in his country. He estimates that only "$10 or $20" of every $100 reaches its intended recipients.
USAID's reduced role

The United States Agency for International Development, the agency responsible for most nonmilitary foreign aid, once employed tens of thousands of technical experts and contractors to staff aid programs around the globe. After the Vietnam War, however, the U.S. government deemed private enterprise more efficient at international assistance. Today, USAID has been reduced to being a contracting organization with just 2,200 employees, and only five engineers, according to recent news reports.

The international aid agency Oxfam says USAID awards more than half of its Afghan aid to just five U.S. private contractors with close political ties in Washington: KBR, the Louis Berger Group, Bearing Point, DynCorp International and Chemonics International. USAID allows contractors to budget $500,000 annual salaries and benefits for high-ranking employees, and $200,000 for lower-ranking administrators, according to Rashid. All expatriate employees receive a bonus of up to 70 percent for hazard and hardship pay. The average Afghan civil servant, however, receives less than $1,000 a month.

Rashid and other critics say waste is built into the system. Expatriate employees bank most of their salary because companies pay for employee travel and living expenses.

"In a lot of cases the money goes from one bank account in the U.S. to another account in the U.S.," and never helps the economy of Afghanistan, said Rashid.

But Jerry Kryschtal, a contracting officer in Afghanistan for USAID, disagrees.

"If about 50 percent of the original contract money reaches Afghanistan," he said, that's positive. It goes to pay guards, cooks, drivers and other local staff members - regardless of how much actually reaches Afghans targeted for the aid.

The RAMP program aimed to build storage structures ranging from concrete floors and metal roofs to sophisticated packing sheds. Like similar facilities in central California, these market centers were designed to help farmers temporarily store their produce until sold to traders.
Not intended use

While a few still function today, many are abandoned or used for something other than their original purpose, according to several nongovernmental organization subcontractors who worked on the project. One center is used as a makeshift shelter for locals waiting for the bus. Of five built in Nangarhar province, two have been abandoned, while the others are used by nongovernmental organizations and businesses as offices and stores.

The concept was flawed from the beginning, according to an American horticulturist who asked to remain anonymous because he still works for Chemonics. "There was no need for many of these market centers," he said, because Afghan farmers had other means to sell their crops.

In a preliminary 2006 report, Chemonics admitted that the vast majority of its market centers were not being used as designed. But company officials argue that the RAMP program has improved since that report was written.

"More recent anecdotal information indicates that a vast majority of these centers have contributed to their original goals and, thus, thousands of Afghan farmers have benefited from their development," Chemonics spokeswoman Lisa Gihring said in an e-mail message.
Rely on Afghans

Afghan officials and aid workers say smaller nongovernmental organizations that emphasize people-to-people aid have helped Afghan society and have kept overhead costs low. Former Finance Ministry adviser Rashid said Washington should rely more on such groups and Afghans themselves to administer future programs.

But Rashid concedes that direct funding of the Afghan government and contractors could also lead to increased corruption, a problem that has gained significant ground since the Taliban regime fell. But he says a multilayer system with improved oversight could diminish fraud.

Waste and corruption in Afghanistan are "tremendous problems," conceded Foreign Minister Spanta. But, he noted, since the United States delivers only 10 percent to 20 percent of its aid money to targeted Afghan recipients, "Afghanistan officials are not more wasteful or corrupt than that."
Bay Area group's difficulties

The U.S. military spends $100 million a day in Afghanistan, according to a 2008 report by the British aid group Oxfam. Civilian aid from all international donors amounts to $7 million daily. Most of the money is spent in southern and eastern provinces where insurgents are battling U.S. and NATO troops, according to the U.S. Agency for International Development.

Since 2003, Roots of Peace of San Rafael has successfully trained Afghan farmers to increase grape yields under contracts funded by USAID and the Department of Defense. In 2004, Chemonics International hired the group as a subcontractor to build crop storage facilities.

Roots of Peace built four major "market centers" and 22 smaller ones across Afghanistan. It opened a branch in Mir Bacha Kot, just north of Kabul, where farmers store table grapes during the harvest season. The rest of the year, the facility is used for training programs and meetings.

As required by contract, the San Rafael group sold its Mir Bacha Kot center to local businessmen for $7,000, according to Roots of Peace's Afghanistan country director Zack Lea. But when the Afghans demanded their money back, the group bought back the facility and still operates it. Roots of Peace couldn't find buyers for two other large market centers.

Since they are too costly to run and don't make a profit for most of the year, critics say locals are unwilling to buy the structures. Roots of Peace Executive Director Gary Kuhn says the centers play an important role during harvest, but persuading farmers to operate them the rest of the year is "a slow process."

Reese Erlich

E-mail Reese Erlich at foreign@sfchronicle.com.

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