Alex Thier, head of USAID's Afghanistan office, uses a multilayered approach to make sure development money is well spent, but corruption is major challenge.
WASHINGTON - Afghanistan routinely is listed as one of the most corrupt countries in the world, and official audits on how development aid is spent there are replete with warnings of massive graft and serious challenges in tracking where money goes.
The job of Alex Thier, head of the U.S. Agency for International Development’s (USAID) office of Afghanistan and Pakistan, is to make sure that the $15 billion and counting that the United States has poured into Afghanistan for economic support since 2002 is spent wisely.
It is a job that grows more difficult as U.S. troops gradually withdraw ahead of the December 2014 deadline, leaving many U.S. personnel and development groups in the capital Kabul afraid for their security and unable to visit the community projects they are funding.
Additionally, the United States and other donors have agreed to funnel 50 percent of aid money directly through the national budget of the Afghan government as part of the transition process, placing extra pressure on agencies to account for the funds.
Thier in an interview with Thomson Reuters Foundation described a multipronged approach his agency is taking to ensure that money goes to the programmes intended.
USAID works with government agencies it can depend upon; uses a cost reimbursement system that requires invoices to receive funds; hires monitoring agents to report back on project implementation; and even employs geospatial systems to check whether a school promised is in fact built, he said. Thier expressed confidence these checks work.
“People say corruption in Afghanistan is an issue, and how can you be sure?” he said.
“We say we have really gone to great lengths to make sure that safeguards are there, as well as the capacity to implement them effectively, which is what gives us a high degree of confidence that some of the institutions that we are working with are actually able to handle these programmes and to deliver real results.”
MOST CORRUPT IN 2012
It is no easy task. The Asia Foundation in a survey last November found that 80 percent Afghans called corruption a major problem, topping security, lack of jobs or the role of the Taliban.
Transparency International in its latest Corruption Perceptions Index ranked Afghanistan as the worst country in 2012, tied with Somalia and North Korea. The biggest scandal was multimillion-dollar fraud at Kabulbank in 2010, which triggered a financial crisis and civil disorder.
The U.S. Special Inspector General for Afghanistan Reconstruction (SIGAR), appointed in 2008 to provide independent oversight of the nation’s rebuilding, is no more encouraging. In its January report, it described corruption as endemic. It cited a report by the Monitoring and Evaluation Committee - formed in 2010 by the Afghan government and the international community to address corruption - which said that Afghanistan lacks the will to combat and prosecute corruption, and its efforts are hampered by weaknesses in staffing, legal and administrative structures, and oversights.
Moreover, the Ministry of Finance budget contains no allocations for combating corruption even though the international community has demanded that the ministry make integrity a priority, SIGAR reported.
Thier said that he would “dispute the idea” that mechanisms are not in place for auditing and tracking money. “There are both institutions and funding throughout the Afghan budget that would support counter-corruption.”
He cited the High Office of Oversight and Anti-Corruption, the central body set up in 2008 to coordinate anti-corruption efforts in Afghanistan. However, its website lists no investigations or cases of corruption.
Additionally, Thier noted that the World Bank administers some of the international donor community funds through the Afghanistan Reconstruction Trust Fund, providing another layer of oversight.
“Our confidence is very high in the ability of the World Bank, coupled with Ministry of Finance, to manage these funds. There is very good experience over a number of years in doing it,” he said.
HANDOVER TO AFGHANS
Thier, trained in law and diplomacy, is no stranger to Afghanistan. Between 1993 and 1996, he worked there for the United Nations and for a non-governmental organisation during the civil war. From 2002 to 2004, he advised the Afghanistan’s Constitutional and Judicial Reform Commissions in Kabul on a new constitution and judicial system.
He pointed to projects with the Ministry of Public Health and the Ministry of Education as success stories in Afghanistan's reconstruction. School enrolment is at its highest in Afghanistan’s history with 6 million students, of which an estimated 35 percent are girls - double the number under the Taliban. Child mortality has dropped by 26 percent since 2002, and Afghanistan delivers basic healthcare in 13 provinces, with 70 percent of patients being women and children.
The next challenge is maintaining these achievements as governments withdraw aid in the decade ahead.
Thier said this will be done slowly, and as Afghanistan develops, it will be able to replace aid with revenues. Economic growth is improving and tax revenues have risen from $200 million to $2 billion in the last nine years. Automating the customs system has reduced by 40 percent over 18 months the steps necessary to process goods in one part of Afghanistan, addressing corruption and increasing revenues, he said.
Similarly, improving the operations of the electricity system has reduced its subsidy from $200 million a few years ago to nearly zero and allowed the utility to raise prices toward market rates, he said.
The focus now is sustaining the progress in face of Afghanistan's deep history of corruption and weak government.
“It is about capacity and revenue, right?” Thier said.
“If they don’t have the capacity to do it themselves, it doesn’t matter. You can set up a great commercialisation system, if Afghans are not running it, and they have not dealt with some of the internal controls to prevent corruption, then it’s for nought.”
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