Retaining young Afghan refugees who have returned

AREU studies the situation of returning second-generation young Afghans who grew up in neighboring Pakistan and Iran (PDF downloads on your computer). It finds that these young men and women find a degree of strength from the fact that they are now in their watan (homeland) even though they know very little about Afghanistan. But they are open to leaving Afghanistan if they face severe material or emotional misery – i.e. they don’t have a strong sense of attachment to Afghanistan.

The report has a few recommendations for retaining these youth, since many have skills, knowledge and worldly experience often lacking within Afghanistan. It urges the Afghan government to extend moral, physical and employment support to the returnees, especially those without established much-needed social networks, improve their access to quality education, and develop a realistic and consistent plan to manage the return of highly-skilled youth and their families.

Overcoming the Obstacles to Establishing a Democratic State in Afghanistan

Col. Dennis Young of the Strategic Studies Institute at the US Army War College adds to the chorus of voices urging the Bush administration to divert troops, effort and financial aid to Afghanistan. He also suggests five adjustments to current ISAF and U.S. strategies:

Assessing Afghanistan: NATO's 63 new metrics

Reuters reports yesterday that NATO has drawn up a "standardized system" of 63 metrics it will use to track progress in Afghanistan. U.S. Army Gen. John Craddock said that "I would submit to you that, to date, most of the assessments of progress have been against anecdotal information," or measured in terms of outputs such as schools built or roads paved. "All good things," he notes, "But the question in my mind is: What's the effect it's produced?" Were the roads blocked? Were the classrooms empty?

I find it more than a little bit troubling that NATO is only getting to this discussion six years in to the intervention. This sort of thinking should have been integrated from day one. In their defense, they probably had metrics, and are now revisiting them to make them meaningful.

It is, of course, a devilishly complicated undertaking. Which metrics to choose? How to weight one against another? And how to gather reliable data from the multitude of unverified sources that include donor countries, the UN, GOA, NGOs? Everyone is keeping score, but based on a different set of rules. Just thinking about it makes my head spin. I would love to see the 63 metrics NATO settled on, and hear how it plans to measure them (if anyone has insights on this, drop a line or a comment...)

NATO revamps measures of Afghan progress, by Andrew Gray (Reuters) 5 December 2007: WASHINGTON -- NATO has developed a standardized system for tracking progress in Afghanistan because the war so far has been judged largely using anecdotal evidence, the alliance's top commander said on Tuesday.

             

Quoteboard

"I'm not in the business of turning down jobs I haven't been offered."
  - Paddy Ashdown

"I can put a guy out on a ridge with an AK-47 and have him take a couple of shots. The Americans will shoot back with their big guns and disrupt the whole valley...Being an insurgent would be so easy."
  - Sgt. Jacob Stockdill

"All you have to do is not screw up, and, even if you do, you just blame it on the Americans."
  - Capt. Chris Rowe
MORE

World Policy Journal piece

Below is an excerpt from a piece I wrote for this month's World Policy Journal. In it I argue that a too-narrow focus on counterinsurgency operations has undermined the mission in Afghanistan. The challenge today is recalibrating our approach to combine the right combination of military and non-military tools. You can download the full article here.

Buying Time in Afghanistan By Carl Robichaud, World Policy Journal, Fall 2007:   Afghanistan is increasingly seen as Iraq in slow motion. It is not. The headlines of car bombs and casualty tolls echo each other, but mask deep differences in each society and in the dynamics of each insurgency. As Iraq has descended into civil war, Afghanistan’s center has held. The government remains weak, but power holders and the public show no appetite for a return to internecine fighting. The insurgency remains solvent because of safe havens across the border in Pakistan, but has been unable to expand upon its toehold in Afghanistan or offer a compelling alternative to the status quo. MORE

Exports up 13 percent in first two quarters

Every year, Afghanistan imports about $5 billion dollars in goods and exports just $500 million. But this year, according to a government spokesman, exports are at least on the rise. In the first two quarters, exports have gone up 12% and 13% respectively when compared with last year.

Afghan exports include handcrafts, fresh and dry fruit, minerals, leather products, cotton and precious stones and have gone to  India, China, Pakistan, UAE, Europe and the US. The rise in exports is attributable, to some extent, on the removal of customs, barriers, and other red tape. A good trend, but obviously still a long way to go.

Afghanistan's exports up by 13pc in 2nd quarter. (Pajhwok Afghan News) by Zainab Muhammadi, KABUL, Oct 21: Afghanistan's exports had registered 13 percent increase during the second quarter of the current Afghan year as compared to the same period during last year, officials said on Sunday.

A look inside the Asia Foundation survey

The Asia Foundation released it's third survey of the Afghan people today. Polling in Afghanistan should by no means be seen as dispositive, but this data can provide insights unavailable elsewhere (especially compared with prior baseline surveys by the Asia Foundation in 2004 and 2006). Here's a look inside...

Predictably, media reports framed the poll as a referendum on security (see AFP: “Security fears up sharply among Afghans: survey”) It’s true that pessimism about security rose among Afghans--with 32 percent citing security as their top concern (up from 22 percent last year.)

But the picture is more complicated, since security concerns vary significantly by region and two thirds of Afghans felt that security in their area was good. Moreover, among those who believe the country is headed in the right direction, good security is cited as the second most important reason (34%) after development.

So the Survey paints a nuanced picture and provides some fascinating data on everything from support for traditional institutions (such as Shuras and Jirga) to democracy and women’s rights. A few trends worth noting:

Right Direction / Wrong Direction:

• People are still optimistic, even if there was a slight decline in those who said the country was headed in the right direction (from 44 percent to 42 percent).
• Three-quarters of Afghans continue to assess government performance positively (i.e. either strongly (25%) or somewhat strongly (55%).)
• Afghans continue to espouse confidence in national security forces (both army and police) as well as in traditional institutions such as Shuras and Jirgas. However, “less than half of the respondents had confidence in the government's justice system, political parties and local militias.”
•  Corruption is an issue for many Afghans, but it is not clear that it has grown more acute. Some poll questions suggest an increase in perceptions of corruption while others suggest a decrease.
  

Security:

• Among people who felt the country was going in the wrong direction, security was cited as the top reason. This may seem unsurprising, until you realize that even in last year’s survey security was only rarely mentioned as a reason for a “wrong direction” response.
• On the other hand, among those who said the country was going in the right direction, good security was cited as the second biggest reason (34%).
• Perceptions of security varied greatly by region. Nationwide, “sixty-six percent of the respondents felt that security in their area was good or quite good, and 50 percent said they rarely or never feared for their own or their family's safety. Eighty-two percent said no one in their family had been a victim of any crime or violence during the last one year.” 

Reconstruction:

• Last year, respondents cited “rebuilding of the country” as only the fourth most important reason why the country was headed in the right direction; this year it became the most important reason for believing so (39%). It’s not clear whether people feel reconstruction is going better, or that the other trends they cited as reasons for optimism last year (security, peace, disarmament) are simply going worse. MORE
  

Latest Kajaki Dam cost estimates

The latest USAID estimate for the Kajaki Dam appears in today's International Water Power: $150m for the first year, and up to $500m total. Actual cost will probably be much higher -- and still worth every penny.

Progress on the dam is the bellwether of efforts in Helmand: restoring hydroelectric power would have massive symbolic and pragmatic consequences (not to mention create 4,000 jobs...) So it's a huge reconstruction priority--but one which requires sustained security to implement...

• Upgrade planned for Afghan dam International Water Power, UK 09/26/2007.

By the Numbers

Some interesting (and encouraging) figures from Ann Marlowe's Wall Street Journal commentary last month:

• Afghan mobile phone subscribers, September 2006:    2 million
• Current subscribers:                                                 3 million
• Approximate percent of Afghans this comprises:       10%
• Percent of Nangarhar residents with a mobile phone: 31%
• Percent of Laghman residents with a mobile phone:    77%

• Approximate population of Khost province:            1,000,000
• Estimated people from Khost living overseas:           200,000
• Annual remittances sent back to Khost :                   $6-12 million
• USAID spending in Khost, 2002-2006:                        $10 million

Source: Ann Marlowe, On the Road to Jalalabad

Afghanistan's "land mafia"

A 200 word piece today by the BBC highlights an important trend and leaves us wanting more details. The emergence of the so-called "land mafia" (a term that probably makes it sound more centrally organized than it us...) has broad repercussions, especially since Afghanistan lacks enforceable, consistent land rights. Multiple land registries allow well-connected strongmen to stake claims with impunity, and the lack of a functioning legal system leaves victims with no recourse.

The lack of security vis a vis land and property rights remains one of the major impediments to investment in Afghanistan. This briefly received some attention in 2003 when refugees streamed home -- only to find someone else there. It's still a big issue today, but the last serious work I've seen on this is the AREU's 2003 report ( Land Rights in Crisis). Sounds to me like a prize-winning expose just waiting for the right journalist...

Powerful 'grab Afghanistan land' By Stephanie Irvine (BBC)  Sept 6: The Afghan urban development minister says land is being appropriated illegally by powerful individuals at a rate of two sq km (0.8 sq miles) a day. Former military commanders, members of parliament and senior officials are seizing land and then selling it on illegally, says Yousaf Pashthun.

Image: Urban Development Minister Mohammad Yousaf Pashthun. BBC.

Bridging the expectations gap

In an op-ed this week, George Davendorf and Brian Grzelkowski -- part of a recent Mercy Corps delegation to Afghanistan -- argue that "the most serious threat to the fledgling Afghan state may be lurking in an unexpected place; not in the strife-ridden streets of Kandahar or the flourishing poppy fields of the countryside, but in the unfulfilled aspirations of average Afghan citizens."

To the Afghan government and donors, Davendorf and Grzelkowski make two specific recommendations that would make a big difference:

1. "Expedite the provision of reconstruction and development assistance at the local level by adopting both a top-down and bottom-up approach...(and) finding ways to inject additional resources at the provincial and district levels where they can quickly benefit average Afghans."
2. "Develop a credible, effective communications strategy to better guide and manage public expectations...to rebuild public confidence in the nation-building effort now underway."

Read the full op-ed below...

Is less more?

Rory Stewart's piece in the Times today has it right and wrong. He's right in his assessment that a major infusion of troops, committed now, is not the answer to the insurgency. He's right that we should focus more of our energies in the stable areas of Afghanistan where money goes further and that we need more modesty in what we seek to achieve.

But Stewart is wrong on several counts. First, his assertion that the situation in Helmand (and Uruzgan, and Kandahar) has deteriorated because of the NATO presence is highly speculative. To wit:

Britain decided in 2005 to bring good government, security, rule of law and economic growth to Helmand Province. At the time, there were few Taliban attacks in the area. The British deployed some 4,000 soldiers last year and more civilian advisers to replace a few hundred international troops who had been in the province since the fall of the Taliban. The British effort failed. A year and a half later, with 7,000 British troops in Helmand, the provincial government is more corrupt, the streets less safe for citizens, the poppy crop larger and the legal economy and infrastructure more eroded.

Stewart essentially argues that "the foreign presence has provoked a wide Taliban insurgency". In fact, the insurgency was on the rebound well before the arrival of NATO expansion (which was implemented in response) and attributable to a mix of factors, including the increase of cross-border support, narcotics revenues, disillusionment with government corruption, etc. This is not to say that resentment doesn't fuel the Taliban, but to blame NATO for the intensification of the insurgency is akin to arguing that ambulances tend to cause car crashes.

Stewart argues that the counterinsurgency cannot succeed because "Afghan officials are simply not committed to state-building in southern Afghanistan, and many are connected to the drug trade." While accurate, this account omits mention that many of these officials were installed or permitted to retain power precisely because of a minimalist Western strategy (of which Stewart approves) that was adopted to avoid confrontation so the United States could keep its focus on counterterrorism/counterinsurgency goals. In other words, the reason southern leaders don't support state-building and drug control is because they are doing just fine, thank you very much, under the system that the West facilitated.

As an alternative, Stewart has an appealing plan: he writes that we can conduct development in the north and counterterrorism in the south without conducting counterinsurgency operations. A new counterterrorism strategy comprised of "intelligence, pragmatic politics, savvy use of our development assistance and on special forces operations" can combat the threat of jihadism not only in Afghanistan but also in Pakistan and Iraq. In other words, we can do more with less sacrifice if only we do it smarter.

This is precisely the message that Washington, Ottawa, and London are keen to hear. It may also be true. But Stewart has been pushing this line for several months now, but I have yet to hear how this approach might be operationalized. Do military experts believe they could do counterterrorism without creating a permissive environment? Can progress in the north, center and west be maintained if the Taliban are given latitude to operate the south? Can the government retain credibility and authority if the ballast of international support is withdrawn?

Where Less is More. KABUL: July 23, 2007 (NYT Op-Ed) By RORY STEWART: America and its allies are in danger of repeating the mistakes of Iraq in Afghanistan. Hillary Clinton, Barack Obama and even some Republicans are insisting on withdrawing from Iraq and sending more troops and resources to southern Afghanistan. The Bush administration’s gloomy National Intelligence Estimate last week on the fight against Al Qaeda will only lead others to make such calls.

But they should think again. The intervention in Afghanistan has gone far better than that in Iraq largely because the American-led coalition has limited its ambitions and kept a light footprint, leaving the Afghans to run their own affairs. MORE

Afghanistan qualifies for debt relief under HIPCI

The World Bank and IMF have announced that Afghanistan has made sufficient reforms to now qualify for debt relief under the Heavily Indebted Poor Countries Initiative. The country will now have its public and private debt payments (on $12b in total debt) cut in half.

To qualify, Afghanistan had to meet several criteria: "face an unsustainable debt burden, beyond traditionally available debt-relief mechanisms"; "establish a track record of reform and sound policies through IMF- and IDA-supported programs"; and "have developed a Poverty Reduction Strategy Paper (PRSP) through a broad-based participatory process." MORE DETAILS ON HIPCI

Rule of law conference nets $360 m in new money

Last week's Rome conference on the rule of law was largely overshadowed by discussions of civilian casualties, but it resulted in some good news: a major boost to the beleaguered sector. Overall, donors pledged $360 m in new funds (over four or five years...) for training judges, building prisons and courtrooms, etc.

The new funds are on top of the $50m already designated for legal sector reform (but I've seen no indication as to whether donors may be reprogramming the new funds from other funding areas...) As of last week, officials would not break down the contributions by country, but this week the US announced its pledge of $15 m. Before the conference the European Union announced that it was readying ~$270 m in pledges, so that's where the bulk of funding is coming from. Please drop a comment if you have more details on what happened in Rome and who has pledged what...

Wheat Production Doubles in Kunduz

Pajhwok reports this morning that wheat has doubled in Kunduz, gains attributable to increased yield (there were approximately the same numbers of acres under cultivation.) People sometimes deride alternative livelihoods as impossible, since "no crop can compete with poppy". In fact, the picture is more complicated. It's true that on marginal, low yield land, there are few alternatives to poppy, and few opportunity costs to growing it (see this excellent report by AREU). However, on productive land a combination of incentives and eradication policies can influence farmer choices. Higher productivity seeds and agricultural practice can help swing the balance away from poppy, and there are signs this is happening in Kunduz and in several other provinces that have seen declines opium cultivation.

Wheat Production doubles in Kunduz
KUNDUZ CITY, June 21 Asia Pulse - Wheat production in the northern Afghan province of Kunduz has doubled as many farmers have stopped growing poppies under the alternative livelihood program this year. The yield reached 111,000 tons this year as compared to 66,000 tons in last year, noted Abdul Aziz Nekzad, director of the agriculture and irrigation department....Mentioning the reason behind the ample harvest, the official said plenty of irrigation water, the counter-narcotics campaign and the provision of improved seeds has helped boost wheat production in the province. MORE

Image:                     An Afghan farmer selects a wheat variety at a research station (CIMMYT Maize and Wheat Improvement Center).

Lifestyles of the Rich and Infamous

Check out “Narcotecture in Herat,” Monocle’s excellent narrated slideshow of the gaudy mansions blooming in Herat. Journalist Rachel Morarjee (better known for her work at the Financial Times) accompanies photographer Ash Sweeting inside some of these lavish shrines built on opium. It’s not pretty...

A premise of the piece is that “Herat’s past glories are slowly being erased by new fortunes,” and they speak with groups like Agha Khan who are “waging a losing battle to prevent the city’s heritage being bulldozed to make way for acres of glass and candy colored mansions.” Unfortunately, the piece doesn’t offer many details about what specifically is being destroyed, and my sense was that these mansions--objectionable as they might be--don’t necessarily threaten Herat’s cultural heritage.

The conclusions asks “whether the rest of the city’s heritage survives the outbreak of peace and prosperity the way that it outlasted three decades of war remains to be seen”…clever, but more than a bit cynical. Whatever aesthetic or moral objections it might provoke, the construction boom comprises roughly half of Afghanistan’s economic growth and has a multiplier effect which helps a lot of ordinary Afghans. Even with many of the funds are leaving the country, as Sweeting keenly observes with a shot of a “Made in China” tag on a bouquet of plastic flowers, and even with impunity and growing inequity, I imagine few Heratis would wish to end their recent peace and prosperity.

Nevertheless, these words and images are striking, and give us a glimpse at an under told story of the new Afghanistan.

• Video
  

Photos: Ash Sweeting, Monocle (c).

Oportunidades in Afghanistan?

Human Rights Watch and other organizations have documented how various problems -- security, poverty, and negative attitudes about education -- have undermined progress in ensuring education for Afghanistan's children.  School infrastructure has received a lot of attention but enrollment rates have plateaued -- especially among girls.

This story in today's NY Times suggested that Mexico has managed to simultaneously raise enrollment rates, reduce poverty, and improve health. The program provides cash payments to women on a contingent basis: "If the women and their children have kept all their medical appointments, and if their children have stayed in school, the money is theirs to use as they wish":

The program pays cash stipends mostly to mothers — about 97 percent of recipients are women — on the assumption that they will be more likely to spend the money on their children. To qualify, people must be in extreme poverty, roughly defined by officials here as living on less than the equivalent of $2 a day.

The article notes that "Since this program got its start in rural Mexico in 1997, it has been heralded by the World Bank and others as a powerful model for fighting chronic poverty." In a decade, Mexico's poverty rate has dropped by 17 percentage points. Over thirty countries have adopted versions of the program. Should Afghanistan become one of them?

Kabul hosts first agricultural fair

For the first time since 2001 Afghanistan is hosting an agricultural fair. The goal is to improve agricultural performance and draw investors. Over 86 companies are in attendance and -- encouragingly -- most  of them are local.

Bolstering Afghanistan's agricultural performance would have a huge impact on lives -- most of the country remains rural and dependent upon subsistence agriculture. Moreover, for a poor country, Afghanistan imports an astonishing amount of its food; something as simple as creating a domestic industry for poultry (most of which is currently imported from China) would go a long way to creating jobs and lowering prices for consumers.

Dutch defend approach

Several readers took me to task for coming down too easy on the Dutch in my previous post. One Dutch reader who was recently in Uruzgan said "I’ve spent a lot of time traveling in these areas, and devoted quite a bit of effort to finding out exactly what the Dutch were up...I can find very little to praise in the attitude that the Dutch are taking...The terrain in Uruzgan is such that they have the luxury of avoiding the larger-scale clashes that are tying the Brits down in Helmand, but this doesn’t give them the right to preach in the way that they have been doing."

Rest assured, I don't (yet) endorse the Dutch model, but I do think it is a long-term strategy and must be evaluated on its own time-frame (In citing Musa Qala I was trying to illustrate that whether something  worked or not often depends on your time-frame.) MORE

All the news that fits: 3 opeds from the NY Times

Three excellent op-eds in the Times today on Afghanistan and the region:

• Pakistani novelist Mohsin Hamid writes about his frustration as a liberal who supported Musharraf five years ago. "An exaggerated fear of Pakistan's people," he writes, must not prevent Americans from acknowledging that Musharraf is losing support: "Pakistan has grown increasingly divided between the relatively urban and prosperous regions that border India and the relatively rural, conservative and violent regions that border Afghanistan. The two mainstream political parties have historically bridged that divide and vastly outperformed religious extremists in free elections, but under General Musharraf they have been marginalized..." Musharraf has done some good, he says, but his time has come...

• Nicholas Kristof writes about Kiva, a site that allows ordinary people to make direct loans overseas. He was in Afghanistan this week checking up on his two loans (of $25 each) to a baker and a TV repairman in Kabul. Kiva loans are administered directly by local partners and with little overhead (Kristof's New York to Kabul flight represents an older model of administering aid...) Kiva is a terrific mechanism--and hopefully Kristof's article will bring them some attention from the mainstream.
  
  • For more details, see www.Kiva.org.

• Rory Stewart stays on message: humility, humility, humility.  Actions justified on moral grounds is nonsensical if they cannot be acheived; "we have no moral obligation to do what we cannot do." Stewart does no service by conflating US policies in Iraq and Afghanistan for rhetorical reasons, but he has some sober and sage advice:

"We will have to focus on projects that Iraqis and Afghans demand; prioritize and set aside moral perfectionism; work with people of whom we don’t approve; and choose among lesser evils. We will have to be patient. We should aim to stop illegal opium growth and change the way that Iraqis or Afghans treat their women. But we will not achieve this in the next three years. We may never be able to build a democratic state in Iraq or southern Afghanistan. Trying to do so through a presence based on foreign troops creates insurgency and resentment and can only end in failure."

Update: the battle for Kajaki dam

How is Operation Achilles going? Joe Friesen answers one facet of that question by looking at one of the operation's goals: to secure Kajaki dam and create a "safe zone" that would permit repair.

The dam currently supplies 380,000 people with sporadic power; if refurbished it could provide 2,000,000 with steady power, not to mention irrigation and employment. It would serve as a symbol of what the government can deliver that the Taliban cannot.

Friesen reports, however, that despite military progress by NATO forces "the Sangin valley south of the dam remains a hotbed of Taliban activity. Until it is secured, construction on a road leading from the highway to the dam cannot begin." Things will take a while to sort themselves out.

Of course, even if Kajaki dam is secured, the region will not be home free. Transmission lines will need to be upgraded as well, and insurgents could still blow up power lines and transformers to turn out the lights. Friesan notes this would risk alienating the population, but this hasn't stopped similar tactics in Iraq.

The fight to win Kajaki dam KANDAHAR, March 24, by Joe Friesen:...  The alliance says British forces have won the high ground in the area, giving them a significant strategic advantage. They have been clearing Taliban positions, blowing up arms caches and slowly gaining ground. Coalition forces have also encircled most of northern Helmand, with Canadians from the Royal Canadian Regiment on the eastern edge of that movement. But the Sangin valley south of the dam remains a hotbed of Taliban activity. Until it is secured, construction on a road leading from the highway to the dam cannot begin, and without a safe road it's impossible to supply the operation. MORE

Photo: DOD: Paratroopers from the 82nd Airborne Division patrol the Ghorak Valley of Helmand Province in southern Afghanistan during Operation Achilles, March 6.

Should we end the counterinsurgency and refocus?

Getting a lot of buzz is Rory Stewart's guest column in the NY Times, in which he concludes that the West has bit off more than it can chew and that "the original strategy of limiting our role was correct."

It's a thoughtful piece, and Stewart writes well; however, his own policy prescriptions are no more coherent than the muddled thinking he dissects. MORE

Growth in legal economy outpaces growth of opium

The IMF has estimated that agricultural gains will allow the Afghan economy to grow by a robust 16%  this year. That's well above the previously estimated 12% growth, and even higher than last year's 14% growth.

U.S. Assistant Secretary of State Richard Boucher told Congress yesterday that "What we've seen in Afghanistan is the regular economy has been growing a lot faster than the economy of opium production." Some of the figures cited in the Bloomberg story (e.g. that "now accounts for about a third of the economy, compared with more than 60 percent five years ago") are suspect; it's easy to get these figures wrong because people often cite the opium trade as a percentage of different things (for example total economic activity vs. legal GDP.) I plan to dig into these numbers more the coming days, but even if the trend is exaggerated it would be an encouraging development (even amidst the latest data that the opium economy continues to expand). As Boucher qualified, narcotics is still the biggest business in town, and it will be a challenge "to get Afghanistan to the point where it can develop an economy, it can develop a country without the corrosive and corrupting influence of the drug trade."

Afghan Economy to Quicken, IMF Says, Reducing Opium Dependence
By Michael Dwyer, March 9 (Bloomberg) -- Afghanistan's economic growth will accelerate over the next two years, according to the International Monetary Fund, with increased production of wheat and fruit helping reduce the economy's opium dependence.

"Growth is expected to accelerate in 2006-07, with even stronger growth likely in 2007-08 owing to a rebound in the agricultural sector,'' Murilo Portugal, IMF deputy managing director, said in a statement on the Washington-based lender's Web site. The pace of expansion had previously been expected to slow to 12 percent this fiscal year from 14 percent in 2005-06.

Gordan Adams on the "snowball effect" of Pentagon primacy

Last month Dr. Gordon Adams, of the Woodrow Wilson International Center gave some striking testimony before the Senate Budget committee. His express topic was the rising costs of US policies in Iraq and Afghanistan, but the second half of his presentation focused on a serious development that has not received enough scrutiny: the expansion of the Pentagon portfolio at the expense of the organs tasked with making foreign policy.

Adams describes the "snowball effect" of this cycle: "the more we ask DOD and the military to do, the more they become responsible for our overseas relationships." Essentially, Iraq and Afghanistan have "become a test bed for a new concept in U.S. foreign and security assistance. Increasingly, the Defense Department is expanding its role in this area, altering an historic practice of State Department (and AID) policy supervision (and implementation) for security and foreign assistance."

We've seen this approach to Afghanistan, we've seen it in Iraq, and it shows no signs of waning:

"Inevitably, DOD will want to expand the authorities for which they are responsible, as they will seek this year. The more we expand DOD authorities, and underfund State and USAID for such activities, the less State and USAID have the credibility and retain the competence to carry out policy leadership and program administration in these areas. This trend risks becoming a self-fulfilling prophecy."

After listing components of this trend (see here) he argues that using the military as "one-stop shopping" "runs the double risk of underfunding and disempowering our diplomacy and foreign assistance agencies, and, at the same time, distracting the military from their core mission." MORE

Photo: Gen. Anthony Zinni, former head of Centcom, with Egyptian President Hosni Mubarak (Al-Ahram). In her book "The Mission," Dana Priest captured how Zinni was viewed by many as the de facto seat of American authority in the region.

Doing Business in Afghanistan: the latest World Bank report

 

Today the World Bank released its annual "Doing Business" report, which compares the world's countries on a variety of variables related to the ease of operating a business.  You can download the complete report here or the portion on Afghanistan here.

To summarize the findings:

• Afghanistan is among the easiest places to open a business and has favorable tax conditions, but is otherwise mired in difficulties related to registering property, getting credit, protecting investors, enforcing contracts and import/export.
• While it is easy to register a business, start up costs (75% of income per capita) can be significantly lowered and many industry-specific barriers should be dispensed with.
• Registering property is a major problem, requiring an average of 252 days and 10% of the property value. The complexity of the process discourages formal registration. Moreover, because of 25 years of chaos, most land has no clear title. The result is that businesses can get less credit and are wary of investing. Reforming this system is possible, as Thailand has proven, and must be a priority for Afghanistan and the donor community.
• There are no credit registries to provide lenders with information on borrowers, and no working land registry to allow land as collateral. As a result, the formal lending system is hamstrung. A simple credit registry could be established for under $2 million. The government could also pass a collateral law for movable property, which makes up 70% of most small business assets. These steps would go a long way.
• Cross-border trade is costly and excruciatingly slow. Legally importing a container requires 88 days,  11 documents, and $2,100--the highest fees in the region. Cutting this red tape would discourage smuggling, reduce corruption, and raise revenues.

For more on this, read the complete report...

More aid for Afghanistan--or just better aid?

How can we improve the quality of aid delivery in Afghanistan? Many people would point to specific concerns vis a vis Afghanistan's economy, security situation, etc, but it's also worth taking a step back and asking: What are the criteria for successful aid in any country?

There are nearly as many theories on this as there are development economists. But one of the best concise summaries can be found in an important article in Foreign Affairs by Nancy Birdsall, Dani Rodrik, and Arvind Subramanian.

In it Birdsall, Rodrik and Subramian, three top scholars on the impact of foreign assistance, highlight areas in which aid has been successful: eradicating smallpox, lowering infant mortality, increasing school enrollment, etc. Then comes the rub: in each case, they note that “What these successes share is that they were narrowly targeted at specific objectives. Assistance does work well, but only when the recipient countries do the right things to help themselves and have the capacity and the leadership to spend the money wisely.”:

But aid has not been associated with the sustained increases in productivity and wages that ultimately matter. . .There are many reasons for the mixed performance of foreign assistance. Donors themselves cause many of the problems. Recipient countries can be overwhelmed by the multiplicity of donors pursuing many, even inconsistent, objectives, disbursing aid to innumerable projects and imposing a plethora of conditions on its use. These factors contribute to rather than offset a poor country's lack of institutional capacity. On top of that, there is the natural volatility and uncertainty of foreign aid, which make it difficult for recipient governments to plan their budgets. For more than a decade, the bureaucracies of donor states and organizations have been unable, despite good intentions and constant resolve, to change the political incentives and constraints that impede the reform of their aid-delivery apparatuses.

Probably more important, however, are institutional deficiencies on the recipients' side. Aid is only as good as the ability of a recipient's economy and government to use it prudently and productively. Thus, the fundamental dilemma: countries most in need of aid are often those least able to use it well. That sets limits on the extent to which large infusions of foreign funds can make a difference.The greatest example of the success of aid -- the Marshall Plan -- illustrates the importance of homegrown institutional competence. Because the institutions and capabilities of the United   Kingdom, France, and Germany survived the war to a large extent, even their war-ravaged economies were able to exploit fully the potential of financial assistance.

Read the complete article for more...

Linking to Tajikistan's surplus power

Not breaking news, but worth noting: the Asian Development Bank has authorized $56.5 million in loans (which will be supplemented by several other funds) to allow Afghanistan to tap into Tajikistan's surplus hydropower. According to GlobalSecurity.org, Tajikistan has the greatest hydroelectric capacity in Central Asia; in fact it has could increase its production almost twentyfold (it currently produces 16.5 billion kilowatt hours per year, but could produce 300 billion kw hours.) The project is due for completion in 2010 and should relieve some of Afghanistan's power shortages:

ADB backing energy cooperation between Afghanistan and Tajikistan KABUL: The Asian Development Bank (ADB) is backing a project to tap Tajikistan’s power surplus to meet shortfalls in neighboring Afghanistan through loans to the two countries totaling US$56.5 million. MORE

Photo: Nurek Dam, the world's tallest, sits astride the Vakhsh River in western Tajikistan.

Economic opportunity from under the floorboards

"People are coming who have never seen a bank before. They are pulling their money from under the
floorboards and we are putting it into circulation through loans."
                   - Hayatullah Dayani, Azizi bank's chief of business development

"It's not like investing in Austria or the United Arab Emirates where things are pretty straightforward. Given that we are only just emerging from a postconflict situation, things are very complicated. But the possibilities are endless if you are able to adapt."

                   - Mohammad Rafi Fazil, economics officer for the Asian Development Bank (ADB) in Afghanistan.

"The economy is moving forward. Afghans are hungry. We are tired of war and we want to buy. We want to build."
                  - Karim Khan, one of 60,000 Afghans in four months to open a new account at Azizi Bank

See: Capitalism Comes to Afghanistan, Time Magazine, By ARYN BAKER.

Rubin in Foreign Affairs

Barney Rubin's latest in Foreign Affairs draws on his congressional testimony (posted last month) to compose a sobering "big picture" of developments in Afghanistan.  Another excellent contribution to understanding and rethinking a faltering strategy. The entire article is available online:

Saving Afghanistan
Barnett R. Rubin, From Foreign Affairs, January/February 2007
Summary:  With the Taliban resurgent, reconstruction faltering, and opium poppy cultivation at an all-time high, Afghanistan is at risk of collapsing into chaos. If Washington wants to save the international effort there, it must increase its commitment to the area and rethink its strategy -- especially its approach to Pakistan, which continues to give sanctuary to insurgents on its tribal frontier.

Nine Companies Bid for Copper Exploration Rights

The government of Afghanistan has said that it will select a bidder within 4-5 months and that the process will be transparent. Read Afghanistan Watch's analysis of Afghanistan's copper resources here.

Afghan gov't accepts bids from 9 foreign companies to explore cooper mine
Nov 15, 2006 (Xinhua): The Afghan government has accepted bid documents from nine foreign companies to explore the Ainak deposit containing huge copper reserves, daily newspapers Outlook said on Wednesday...a total of 13 foreign companies had submitted bid documents, and the government chose nine in the first run, among which are companies from China, Russia, Canada, the United States, Australia, Kazakhstan and India.

With an estimated 12 million tones of copper, the Ainak deposit is believed as one of the biggest copper reservoirs, according to Adil. A World Bank analysis indicated the Ainak copper production could capture as much as 2 percent of the annual world market, as well as vast coal deposits and many other deposits that could spur major development.

Picnic site or terrorist hideout? It's BOTH!

Christina Lamb of London's Sunday Times reports from Tora Bora that efforts are underway to transform bin Laden's former redoubt into a tourist destination. Nangahar governor Gul Agha Sherzai, rarely accused of being the sharpest knife in the pantry, had this sparkling insight:

“I don’t just want one Tora Bora hotel...I want three or four. Long before anyone had heard of Osama, Tora Bora was known as a picnic spot and now it can be both.”

Anyone remember that classic Saturday Night Live skit with Gilda Radner and Dan Akroyd?

 

Oxfam report: Serve the Essentials

This Oxfam report, subtitled “What governments and donors must do to improve,” approaches South Asia's development from a comparative perspective which, according to Jean Drèze of the Delhi School of Economics, “has been overlooked.” According to Drèze, the report “makes excellent use of this perspective by scrutinizing regional contrasts in South Asia -– between as well as within countries.”

There are some good insights and data here, but the recommendations tend to be overbroad to usefully apply to individual countries.  Below are a few of the useful prescriptions: 

Microlending and Afghan reconstruction?

USAID announced this month (clip below break) that $80 million will be distributed in small loans to rural Afghans over the next three years. This is a welcome initiative. Credit programs exist in Afghanistan, but on too small a scale to compete with the array of traffickers who already occupy the role of lender. These traffickers extend cash to impoverished farmers at usurious rates (and with predictably harsh penalties for non-payment) in return for future payment in cash or poppy sap.

Micro-lending programs are powerful because they correct a market failure--the stifling absence of credit for poor people. For years, Muhammad Yunus, who received the 2006 Nobel Peace Prize for his work at the Grameen Bank, has argued that despite their lack of collateral and traditional "creditworthiness," poor people -- and especially poor women -- can make highly reliable borrowers.

You can read Dr. Yunus's excellent Wall Street Journal op-ed here (A Hand Up, Not a Handout.) He argues that loans are usually more effective than grants, even -- and especially -- when the needs are greatest.  Counterintuitive? Read his argument:

In Bangladesh, we've learned that when aid is free, not only do the poor get the least of it, but everyone inflates their needs. While some handouts are clearly necessary in such times, we focus on lending small amounts of money. This lets us keep costs down and rebuild funds for the next disaster. Most importantly, our Grameen banks are ready to act at a moment's notice. They can respond to a disaster without waiting for anyone's permission, immediately becoming like humanitarian agencies by suspending loan payments, and providing cash, food and medicines.

Micro-lending provides a counterbalance to the two biggest problems we've seen in reconstructing Afghainstan--the problem of administrative costs and bureaucratic delays implicit in foreign aid. The point of Yunus's article is to recommend microlending for Katrina victims, but it raises the question: are we doing enough to support microlending in Afghanistan?

Illicit: Traffickers Diversify

I was reading Moisés Naím's excellent book Illicit the other day, and came across this passage (which is continued after the break). Afghanistan is a case study in the processes he describes; the impact of institutional capture by opium traffickers and their allies is already evident, and their diversification (into real estate, for example) is well underway. Expect more of the same. All future attempts to reform Afghan politics, justice system, or economic development must account for the centrality of the illicit economy:

Left unchecked, illicit trade can only pursue its already well advanced mutation. There is ample evidence that it offers terrorists and other miscreants means of survival and methods of financial transfer and exchange. Its effect on geopolitics will go further. In developing countries and those in transition from communism, criminal networks often constitute the most powerful vested interests confronting the government. In some countries, their resources and capabilities even surpass those of their governments.

Voices of Afghanistan

Voices of Afghanistan: An Evaluation Study
by Seema Patel

The initial findings of the CSIS 2006 Measures of Progress report? "Afghans are less hopeful today than they were a year ago" and "The state-building mission has lost ground, and is slipping further into the 'danger zone'." 

To this end, six Afghan interviewers (three men and three women), trained in social science research, conducted 1,000 qualitative interviews over a six-week period covering the five pillars of reconstruction: security, governance, justice, economic opportunity, and social well-being.  The interviewers covered thirteen provinces—encompassing all five regions of Afghanistan—and captured a balanced sampling of ethnic groups...

Seeing past the doomsayers

Ann Marlowe, a close observer of Afghanistan since 2002 who just penned a romance about her visits ("The Book of Trouble"), argues that "if only American and other Western investors could see past the doomsayers, they too could play a part in the Afghan economic success story":

Afghanistan's Booming Economy...
By Ann Marlowe,  19 September 2006,  (The Wall Street Journal Asia): KABUL -- The recent spate of violence shouldn't be allowed to detract from the real story here: Afghanistan's booming economy. Frightened by exaggerated scare stories, American and other Western companies are missing out on lucrative investment opportunities grasped by ostensibly less sophisticated Afghan and regional players.

There's no shortage of profit to be made in an economy that grew 14% in the 12 months to March 21, and is expected to expand by a similar amount in the current financial year. In Kabul alone the number of cars and taxis has increased by one-third since last year to 400,000, up from fewer than 1,000 under the Taliban. Large sections of the city boast three- and four-storey buildings where mud brick houses stood only a few years ago, and twin 17- and 20-storey towers are currently under construction in Herat.
Telecom was one of the first big success stories. U.S. companies stood by as Afghanistan's first four mobile-phone licenses were auctioned off, starting in January 2003. The Afghan-American and regional investors who got licenses have profited as the number of private mobile-phone users rocketed from zero to 1.5 million over the last five years. Now finance and banking is taking off -- and, once again, Western companies are missing out...