Why Isn’t Aid to Afghanistan and Pakistan Working?

Two timely reports call attention to the failure of the United States to win hearts and minds in Afghanistan and Pakistan, despite spending billions of taxpayer dollars: Evaluating U.S. Foreign Assistance to Afghanistan [pdf], from the U.S. Congressional Committee for Foreign Relations, and Beyond Bullets and Bombs: Fixing the U.S. Approach to Development in Pakistan, from the Center for Global Development. The purpose of both reports is to assess and review President Obama’s March 2009 shift in U.S. policy for Afghanistan and Pakistan, with particular reference to U.S. aid provided to these countries for combating terrorism.

President Obama expounded the idea that the war on terror could be more effective by winning the hearts and minds of people, instead of using bullets and bombs. Aid, as a significant tool to execute this strategy and to maximize national interest goals, was to be funneled for nation-building and development purposes in Afghanistan and Pakistan. For Afghanistan, Congress appropriated approximately $2.8 billion in 2009 and $4.2 billion for 2010.

In the case of Pakistan, the Kerry Lugar bill was signed into a law in October 2009 and $7.5 billion (over five years) worth of economic aid was authorized for Pakistan. The aid, however, in President Obama's words, was "no blank check”; both Kabul and Islamabad would have to deliver on particular objectives, including reining in corruption and closing down Al Qaeda and Taliban safe havens to demonstrate their commitment to root out the "cancer" of al-Qaeda and its allies.

Two years later, according to these two voluminous reports, the hugely expensive U.S. attempt to use aid as a tool for combating extremism has achieved little success. The findings of both the reports call for a review and reassessment that would change the approach in order to become more effective, particularly in the “winning the hearts and minds of the people” arena, which is missing totally throughout the implementation of this policy. Aid has failed to reach its target and, in fact has proven counterproductive when measured against the indicators of development in those countries.

In Afghanistan, nation-building still seems to be a remote goal.  As cited in the report Evaluating U.S. Foreign Assistance in Afghanistan, the State Department and USAID are spending approximately $320 million a month on foreign aid in Afghanistan, roughly 80 percent of which is being spent in Afghanistan’s restive South and East. Only 20 percent is going to the rest of the country.

Most of the funds in Afghanistan’s south and east are being used for short-term stabilization programs instead of longer-term development. Practitioners in the field argue that stabilization is not development, and that stabilization projects, if pursued over an extended period, can have negative consequences.

The congressional committee  report maintains that foreign aid, when misspent, can fuel corruption, distort labor and goods markets, undermine the host government’s ability to exert control over the resources, and contribute to insecurity. Huge fund allocations to the provincial leaders represent a tidal wave of funding that local officials are incapable of spending wisely. Inadequately supervised funding tends to further encourage corruption.

Rather discouragingly, according to the report, the future prospects for the Afghan economy are not bright either. It warns that the Afghan economy could slide into depression once the foreign military and development spending starts receding. This aid now provides 97 percent of the country’s gross domestic product.

Fears have been expressed that the limited success that was achieved in this direction may not survive the American withdrawal. The congressional report strongly recommends a reappraisal of this strategy and proposes that “in order to be more effective, U.S. aid projects should meet the three basic conditions of being necessary, achievable, and sustainable.

The March 2009 strategy in Pakistan has not shown much success either. This new policy has resulted in downturns in development indicators, proving contrary to what was promised. Meanwhile, the pressure to do more in combating terrorism has burdened the public with insurmountable difficulties. The Center for Global Development study highlights the causes of this failure and calls for fixing the U.S. approach by adopting the following recommendations:

1. Clarify the mission: separate the Pakistan development program from the Afghanistan program and from the Pakistan security program.
2. Name a leader: put one person in charge of the development program in Washington and in Islamabad.
3. Say what you are doing: set up a website with regularly updated data on U.S. aid commitments and disbursements in Pakistan by project, place, and recipient.
4. Staff the USAID mission for success: allow for greater staff continuity, carve out a greater role for program staff in policy dialogue, and hire senior-level Pakistani leadership.
5. Measure what matters: track not just the outputs of U.S. aid projects but Pakistan’s overall development progress.

From the recipients’ point of view, there isn't likely to be any disagreement with the assessments and recommendations that these reports represent quite fairly and objectively. If the strategy was meant to be two-pronged—one, winning hearts and minds through development and nation-building, and two, doing more to combat the extremists—why then didn't the United States take the first element as seriously as it was taking the second?

The recipients have legitimate complaints; why didn't aid ever find its way to where it was meant to go? Why has it proved counterproductive, with increased corruption, poverty, and loss of life? They also harbor a deep-seated suspicion that aid comes with strings attached—with unspoken demands to influence and shape the country’s political process and outcomes.

The situation seems paradoxical. All the actors are paying a high price, yet no one is receiving their money’s worth. Americans, for example, are paying in both human and material terms by being physically present in a part of the world where an already unfriendly environment grows more hostile every day. This hostility, as the reports elaborate, does not come out of nowhere.

Taking into account the current economic situation, any ordinary American can legitimately ask, Why isn't taxpayer money reaping any benefits? Why have the goals set forth in this new strategy not been realized? Why is public opinion in Afghanistan and Pakistan turning against us?

The scenario is bleak enough to make the reports sound alarmist. My plea to President Obama is to heed the alarm, to listen to those whose voices are too often unheard in the corridors of powers. The beneficiaries—from the people of Afghanistan and Pakistan to people of America—should serve as a motivating factor for accomplishing this program the right way. The reputation of America itself may well be the biggest beneficiary.