Foreign contractors: an Afghan problem, too
The Institute for War and Peace Reporting's Afghanistan page is always worth a visit. Right now, they have this sad piece of reporting there:
- The sudden collapse of the western part of Kabul's state-run Jamhoriat hospital on July 26, which was being renovated by the Chinese company, Complant, has heightened concern about the numerous construction projects in the country. At least six Afghans were killed in the collapse and more than 30 others were injured, including 2 Chinese workers. At least 30 people are still reported missing.
Aid is always an inefficient, if not duplicitous, way to help people. Emergency relief is one thing. But extended reconstruction or development programs get corrupted to the extent that they involve government and foreign money. First, the donor countries and intermediaries have national and career interests in carving out benefits for their own contractors. Second, because the money is limited and subsidized, it can never be channeled broadly or equally. Local recpients who lobby and get the money tend to be well connected types with interests of their own. All kinds of mark-ups and "consultancy fees" eat away at the benefits. The end result is often a showcase work of shoddy quality completed at exorbitant cost, which benefits the intermediaries more than the populace. Education aid can also be looted or pilfered in the form of fake jobs, useless or over-invoiced supplies, or superflous buildings. There is, of course, a trickle-down or multiplier effect of such expenditures, but the impact is less than a thousand other things. Even subsidized seeds, fertilizers, or medicines are apt to be horded and resold at market values.
Exclusion of for-profit intermediaries need not guarantee a better result. Charities also have overhead and might be just as inattentive to costs and just as powerless to avoid corruption at the recipient end. Non-profit might simply mean no-profit.
Rule of law probably takes precedence over all other requirements for prosperity and growth. Of course, there is something of a chicken-egg connection between the two. Aid might sometimes help, but it seldom attains miracles and very often results in rotten pork.
Is anyone alarmed that there are no audit trails for nearly a $ billion in expenditures made in Iraq during the past year? Meanwhile, very little of the reconstruction money authorized by the US Congress has been spent. Is this explained by the sour security situation and / or the lack of administrative competence and control? I expect both are to blame. Iraq may well illustrate a case where aid is futile until there is order and security.