Monday 22 March 2010

Where all the donor money went

Afghanistan's Ministry of Finance has just released its latest Donor Financial Review. Although I have not been able to obtain a copy, there is a detailed summary on the IRIN website.
The review shows that donors spent $36bn in Afghanistan in 2001-2009 out of a total of $62bn pledged in grants and loans.
If you look at what countries pleadged and what they delivered, then Sweden came out best, having turned 90 percent of its pledges into concrete funding, followed by the UK and the USA, while the Asian Development Bank ranked last at 60 per cent.
And the USA has been the single largest donor to Afghanistan over the past eight years, disbursing $23.417bn.
Per capital donor aid over the past five years has been $1,241 - far less than the amount spent in Iraq and Bosnia, despite Afghanistan having some of the worst poverty and vulnerability indicators in the world.
Low aid absorption capacity has also been cited as a reason why more aid has not reached the vulnerable in Afghanistan, experts say.
President Karzai's government has been pilloried over allegations of endemic corruption, ineptitude and the mismanagement of aid, but it was responsible for disbursing only 23 per cent of foreign grants (about $8 billion). The remaining 77 per cent - totalling over $29bn - was spent directly by donors with little or no government input.
Of this $29bn, more than $15bn was disbursed directly by foreign military channels, according to the DFR. This includes the Commanders Emergency Response Program - where senior officers in the field have access to cash for tactical spending - and the Provincial Reconstruction Funds.
IRIN quotes Mark Ward, a UN special adviser on development in Afghanistan, saying that donors have funded their own projects because the government has not produced enough well designed national programmes.
"The donors' projects are often not designed closely with the Afghan government and may reflect domestic priorities, not Afghan priorities," he told IRIN.
Over half of the total disbursed assistance in 2002-2009 (about $19 bn) was spent on the security sector, particularly on strengthening the police and army, the DFR figures show.
Health received six percent, education and culture nine percent and agriculture and rural development got 18 per cent of the total.
Looking at where money was spent shows that the northern areas did much better than was thought:
$5.2bn in the central provinces
$1.7bn in the north
$1.6bn in the northeast
$1.4bn in the east
$1.3bn in the west
$1.2bn in the south
$0.9bn in southwest
The really interesting question is how much of all those billions is still in Afghanistan - and how much has been reinvested in swanky housing developments in Dubai and the rest of the Gulf?
Update: The Donor Financial Review document can be found here. Thanks to Colin.

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