Afghanistan: There has been a clear shift in emphasis away from humanitarian aid towards spending on sector-allocable aid, notably aid directed towards social infrastructure and services, of which the largest share is for activities aimed at building the capacity of government and civil society. But it is vital need to pay attention to the type of growth pattern and its main drivers to transform its’ economies in order to foster economic growth and achieve the Sustainable Development Goals (SDGs). Rampant corruption and fragile security are impeding all the development initiatives in this country.

1. Development Initiatives
vs.
Corruption and Fragile Security
in Afghanistan
Rahat SIKDAR, Ph.D.

2. Afghanistan has been major site of concentration for international development
partners since 2001. Continued high levels of corruption and bad governance
have seriously frustrated the international community in their efforts to stabilize
Afghanistan.
Major reports revealed that millions of dollars that were allocated for the
reconstruction and development of Afghanistan were misused or wasted.

3. There has been a clear shift in emphasis away from humanitarian aid towards
spending on sector-allocable aid, notably aid directed towards social
infrastructure and services, of which the largest share is for activities aimed at
building the capacity of government and civil society. But it is vital need to pay
attention to the type of growth pattern and its main drivers to transform its’
economies in order to foster economic growth and achieve the Sustainable
Development Goals (SDGs).
Aid to Afghanistan by category, constant 2008 prices, US$ million (2006-2009)
$14,074
$79 $2,192
$298 $351 $153
ALL AID
Sector allocable aid
Debt relief
Humanitarian aid
General budget support
Other

4. Aid to Afghanistan by category, constant 2008 prices, US$ million (2006-2009)
$3,646
$963
$1,086
$12,025
SECTOR ALLOCABLE AID
Economic infrastructure and services
Multi-sector / Cross-cutting
Social infrastructure and services
$763
$815
$245
$238
$5,198
$1,120
SOCIAL INFRASTRUCTURE AND SERVICES
Education
Health
Population program and reproductive health
Water and sanitation
Other social infrastructure and services
Source: Development Initiatives based on OECD DAC CRS data

5. In 2000, the year before the war, Afghanistan was the 69th largest recipient of
ODA worldwide, receiving 0.3% of total ODA flowing to developing countries.
Between 2002 and 2009, US$26.7 billion in aid was spent in Afghanistan. By
2009, Afghanistan was the leading global recipient of official development
assistance (ODA), for the second consecutive year.
Despite continued ODA facility and partnering through other development
agencies poverty level remained worst in this country. Rampant corruption has
been significantly uncontrolled in the government system. Aid effectiveness
was questioned due to notable failure in the development initiatives that was
mostly due to fragile security and corruption. Inequalities in the sub national
levels were one of major failure caused the poverty level decreasing.

6. Afghanistan was recipient of aid from all donors US$ billion 4.9 in 2008 and
6.2 in 2009. 43.1% of the total US$62 billion pledged was disbursed to
development projects and activities. Still eradicating extreme poverty and
huger remained declining while it was measured 42% against baseline 33% in
2008. Therefore, accomplishment of MDG 1 was recorded difficult to achieve
for Afghanistan.

7. According to the US Special Inspector General for Afghan
Reconstruction (SIGAR), corruption remains one of the major
impediments to the stabilization and reconstruction process in
Afghanistan.
For instance, the poverty rate varies from 3.6 percent in Farah
Province compare to 65.4 percent in Takhar Province. Similarly,
the 2.8 percent calorie deficiency in Maidan Wardak province is
significantly lower compared to 82.2 percent in Zabul Province.
This scenario clearly points significant inequalities in the sub
national levels.

8. The government is preoccupied with the country's worsening security situation,
economic recession, and peace talks with insurgents, which have all but
monopolized the its attention for the past several months. Nevertheless, the
leadership must not lose sight of other important issues like systemic
governmental failures and corruption. The Afghan government committed itself
to enacting and enforcing a legal framework for fighting corruption.

9. Despite the less favorable external environment, the group of LDC economies
attained an average real GDP growth rate of 5.6 per cent in 2013. On the
contrary, annual GDP growth rate of Afghanistan was 3.9 % in 2008 and that of
3.2% in 2014.
1.2
17.6
5.8
3.9
11.2
1.1 0.8
2008 2009 2010 2011 2012 2013 2014
0
2
4
6
8
10
12
14
16
18
20
Real GDP per capita growth rate

10. 120.8
75.7
211.3
83.4 93.8
69.3
0
50
100
150
200
250
2000-2008 2009 2010 2011 2012 2013
Foreign direct investment inflows US$ million
12
152
331
247
385
0
100
200
300
400
500
2000-2008 2009 2010 2011 2012
Migrant remittance inflows US$ million

11. Based the above data and information, following points are suggested for the
attention of the government.
Real GDP per capita, foreign direct investment and diaspora remittance
inflows continue declining all together over the recent periods. Domestic
resources mobilization through remittance inflow should be considered at the
highest level when most of the remittances are utilized in household
purposes.
Continued political dilemma for a longer period would risk the state stagnant
from all recoveries.

12. Sub-national level inequalities should be reduced through effective provincial
coordination and strategic framework.
Combatting corruption should be in action rather in the sleeping chapter of the
policy and should be prioritized to make all the development initiatives a
success.
A responsible and accountable government - free from corruption and
committed to promoting transparency and integrity across Afghan society - is
the best weapon to deprive insurgents of their public support. Therefore, a
multifaceted approach will be required to curb and control it.
ODA distribution (development assistances) should be more emphasized in
curbing rampant corruption and fragile security which will lead other SGDs to
be freed from stagnant.