Afghanistan reconstruction: A strategic balancing act

After two rounds of voting hit a political deadlock, the 2014 Afghan presidential elections — the country’s first democratic transfer of power — resulted in a U.S.-brokered power-sharing agreement between President Ashraf Ghani and the government’s CEO Abdullah Abdullah. The precarious political situation, paired with the surge in violence that followed the withdrawal of most NATO and U.S. troops late last year, has provided a challenging backdrop to development and reconstruction efforts in Afghanistan. The new national unity government, described by Vanda Felbab-Brown, senior fellow at the Brookings Institution, as a “very troubled, problematic beast,” has been off to a shaky start. Former political rivals Ghani and Abdullah are now unsurprisingly struggling to agree not only on appointments of cabinet members — one year later, the country is still without a defense minister — but also on what the extraordinary political arrangement entails. Political wrangling has also postponed the parliamentary elections, which were scheduled to happen in April this year, to 2016. Because of this, the loya jirga or constitutional assembly, which aims to reform the country’s political and electoral process, will also be delayed. To add a deadly dimension to the Afghanistan conundrum, Taliban violence has spiked. With already more than 5,000 civilian casualties, 2015 is well on its way to becoming the most violent year for Afghan civilians since the Taliban regime’s fall in 2001. The death of the group’s leader Mullah Mohammed Omar has left his successor Mullah Akhtar Mansour struggling to consolidate power within the divided Taliban. Peace talks with the Afghan government remain on hold as some factions within the group oppose them altogether. But many fear negotiations, if they continue, could lead to compromised human rights — especially women’s. “A lot of those things that [the Taliban] will be asking for will be totally unpalatable to the international community, as well as to many Afghans,” Felbab-Brown told Devex. Risky business Afghanistan’s elevated instability and insecurity, as well as political obstacles such as corruption, are of course not going unnoticed by the international community — leaving serious implications for the country’s economic sector. Growth of the country’s gross domestic product slowed to 3.6 percent in 2013 and further to just 2 percent in 2014, but Afghanistan had experienced 14.4 percent growth rate as recently as 2012. “Activities in Syria and [those] associated with [Islamic State group] overshadow Afghanistan in the news but there is still significant political risk that is costly for businesses,” Smita Malik, vice president of programs and special risks at Clements Worldwide, told Devex. The country’s most prominent business sectors — agribusiness, construction and infrastructure, mining and natural resources, and transportation — have all been affected by the country’s less than rosy business environment, which in turn has affected overall economic development. The downsizing of value chains that once supported foreign troops have also contributed to unemployment. The Asia Foundation’s most recent survey of the Afghan people, which serves as a barometer of Afghan public opinion, reported that in 2014, three-fourths of Afghans believed their economic situation was worse or the same as it was the year before, while only a fifth said it was better. According to Barry Shapiro, vice president of global security at Development Alternatives, Inc., the heightened insecurity and risk particularly in Kabul have restricted the company’s movements and operations on the ground. “The only thing we can do differently is make sure that whatever movements our people make to and from where they work, to where they need to go to do their jobs, is mission essential,” he told Devex. Abdullah Ahmadzai, the Asia Foundation’s country representative in Afghanistan, shared that the organization tries to find innovative ways to implement its programs despite increased insecurity — all while minimizing the level of security risk to the staff. “Our main focus is on working with credible Afghan implementing partner organizations with a strong focus on monitoring and evaluation for increased accountability and maximizing the impact of our development efforts for the benefit of the Afghan people,” he told Devex. On-budget vs. off-budget assistance The Afghan economy is hugely dependent on foreign aid, and there is a debate about whether funding should be channeled through government systems or be delivered outside of them, directly to implementing nongovernmental organizations. “Going off-budget is very problematic, unhealthy, but going on-budget is difficult,” said Brookings Institution’s Felbab-Brown. “It’s not an easy balance.” While on-budget aid is more ideal, the reality is that disbursements that happen through the government usually take much longer. And following the unity government’s disappointing performance in the past year, much doubt has been cast on its ability to rise to the occasion. The Special Inspector General for Afghanistan Reconstruction also recently found that because of government inaction, rampant corruption has become one of, if not the biggest obstacle to state-building and development. Going off-budget, on the other hand, is extremely risky — as money is often stolen and appropriated by criminal groups, local warlords and powerbrokers. In these cases, the money itself — though intended for development use — runs the risk of actually sparking or fueling conflict instead. “My view tends to be that money should be put into areas that are secure, where there is reasonable stability and where you can monitor that the money is reaching those that it needs to reach,” Felbab-Brown said. While this may first exclude the neediest people living in the most fragile, volatile areas, Felbab-Brown argues that because of insecurity, odds are high that the money will not be used productively and may never actually reach its intended beneficiaries. Picking priority areas What, then, can be done to re-establish investor and donor confidence in Afghanistan, and eventually spur more business and development activity? Cracking down on corruption — especially in customs and tax collection — would be a good place to start. But targeting all provinces and cities at the same time is not realistic and may not yield results. Instead, picking priority or demonstration areas or provinces in which to focus anti-corruption and security restoration efforts could be a good and feasible way to show both Afghans and the international community that the government is finally starting to deliver, and that it is in fact capable of rebuilding and running the recovering state. Felbab-Brown suggested Nangarhar and Herat as two possible starting points. As the fighting winds down, as it is wont to do during the winter season, the government should also work on building the capacity of the Afghan forces. Both national and local governments in Afghanistan must work within the winter window to hit as many state-building and reconstruction targets as they can. “The question is … what can be done economically, politically before we hit April and May next year, when the violence will pick up again?” Felbab-Brown asked. “What can we demonstrate that we are succeeding in, that is significant to the Afghan people and that’s significant to foreign donors?” Conflict in Context is a monthlong global conversation on conflict, transition and recovery hosted by Devex in partnership with Chemonics, Cordaid, Mercy Corps , OSCE and USAID. We’ll decode the challenges and highlight the opportunities countries face while in crisis and what the development community is doing to respond. Visit the campaign site and join the conversation using #ConflictinContext.