In meetings with international donors and journalists ahead of the 20 July Kabul Conference, Afghan Finance Minister Omar Zakhilwal narrated an anecdote to illustrate the mismatch between the short-term aid being offered to his country and the sustainable projects that it needs. The site of the tale was an unnamed village in Marjah district of Helmund, recently the site of Operation Moshtarak, a long military operation to clear the area of insurgents. Soon after the operation, says Zakhilwal, villagers in the area were offered cash as a form of quick relief. Instead, they refused the money and asked for sustainable projects.
Whether the story is apocryphal or not, Zakhilwal's tale underlines both his own dilemma and that of his country. Unlike the villagers of Marjah, Afghanistan and its finance minister are unwilling or unable to turn down money coming from international donors, no matter what shape it is in or how many strings might be attached. Zakhilwal's story also demonstrates the larger challenges of the 'Afghanisation' that the Afghan government and the international community are trying to achieve, albeit with different goals, needs and outcomes in mind. Projected as a major step forward in the process of establishing Afghan control over the process of reconstruction of the country, the Kabul Conference was expected to discuss ways and means to transfer control of security, governance and development into Afghan hands. Key to the conference was the notion that, in the process of transition, the aid money should come under greater control of the Kabul government.
Currently, 80 percent of the aid money flowing into Afghanistan is spent directly by the donors – that is, outside the government budget. This, says the finance minister, erodes Kabul's sovereignty, authority and ability to govern effectively. Most donors point to corruption within the government to justify spending money directly. Kabul officials have retorted by pointing out that the bulk of the corruption takes place outside the government – in the contracts and sub-contracts given to commercial firms contracted by the donors themselves. An astonishing USD 3 billion was legally taken out of the country between January 2007 and February 2010 – a sum, Zakhilwal points out, that is several times that total amount received by the Afghan government in that period. While some donors such as the ADB, World Bank, UK and the Scandinavian countries have now started routing money through the government, the single largest donor – the US – spends only five percent of its aid money through the government.
Though the principle of routing aid money through Kabul's budget was accepted as far back as the Paris Conference of 2008, and reiterated again at the London Conference in January this year, it was never implemented. In fact, the imaginative reinvention of facts on this issue through rhetoric has been part of a consistent pattern of the international community. On the issue of aid alignment, UN Secretary-General Ban Ki-moon, led the way earlier in the year. In his quarterly report on Afghanistan in March 2010, Ban drew attention to the fact that the Afghan government had 'urged the international community to increase contributions made through the Afghan budget to 50 per cent of its total contributions to the country over the next two years.' He further said, 'The participants in the London Conference supported the ambition of that goal, but did not explicitly commit themselves to it' (emphasis added). By June, the secretary-general was looking afresh at the same facts: 'The London Conference commitment to progressively channel financing for development through the central budget remains critical for a country in which almost 80 per cent of development assistance does not flow through the Government budget.'