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Afghanistan the myth of reconstruction

This article is over 17 years, 9 months old
Afghan-American journalist Fariba Nawa reveals how Western multinationals, security contractors and warlords have made a fortune out of aid contracts
Issue 2001

Near Kabul, the capital of Afghanistan, in the village of Qalai Qazi, stands a new, bright yellow health clinic built by US contractor The Louis Berger Group.

The clinic was meant to function as a sterling example of US engineering, and to serve as a model for 81 clinics Berger was hired to build – in addition to roads, dams, schools and other infrastructure – in exchange for the £360 million in US aid money the company has so far received in federal contracts.

The problem is, this “model” clinic was falling apart. The ceiling had rotted away in patches, the plumbing, when it worked, leaked and shuddered, the chimney, made of flimsy metal, threatened to set the roof on fire, the sinks had no running water, and the place smelled of sewage.

I visited the clinic one afternoon in October 2005. It was Ramadan, and the clinic closed early each day. When I arrived, the doctors had left for the day. An old woman swept the floors and they gleamed.

But like so many new structures here, the window dressing can’t hide the ugly reality that wafts from bathroom drains and leaks from decayed ceilings.

The Qalai Qazi clinic is no aberration. Another Berger clinic was inexplicably planned in the remote, sparsely populated province of Badakhshan in a location surrounded by mountains and accessible in winter only by helicopter.

That clinic was built on earthquake-prone land. Now it will be demolished and rebuilt elsewhere. The clinic was supposed to be completed in 2004. Two other clinics promised for the area have also been delayed.

From 2002 to 2005, USAID (the US government’s development agency) budgeted more than $3.5 billion for Afghanistan. Millions of dollars of international aid money has been mismanaged, misused and wasted.

Many development experts find the process by which aid contracts and loans are awarded to be counterproductive. International and national aid agencies – including the World Bank, the International Monetary Fund (IMF) and USAID – that distribute aid money to developing countries have, in effect, designed a system that is efficient in funneling money back to the wealthy donor countries, without providing sustainable development in poor states.

The United States’s own inventories have acknowledged that efforts so far have fallen short of nearly every goal.

The Government Accountability Office report presented to Congress in 2005 states that, although improvements to basic infrastructure have been made in Afghanistan, security and other obstacles have held back many of the reconstruction goals that USAID set forth four years ago, under which it doles out and oversees billions of dollars in reconstruction and aid contracts.

But four years later, after the US-led invasion ousted the Taliban and the Western backed Hamid Karzai government took control, security has only got worse.

More than 1,500 people were killed in the escalating violence in 2005 alone, the largest number in a single year since the fall of the Taliban. The institutions developed to deal with security, such as the Afghan National Army and police, are teetering along with few resources and little experience.

Yet Kabul, which still has only a few hours of electricity each day, is bustling with signs of Western-style commerce, such as the new five star Serena Hotel which charges £130 to £650 a night (affordable only by visiting dignitaries, wealthy contractors, and the odd opium magnate). The new Kabul City Centre mall has perhaps the only working elevator and escalators in the country.

But for the 3.5 million people who need food aid, the idea of shopping in a glistening mall is hardly practical. So too, the stores peddling new technological gadgets and appliances are beyond the imagination of citizens who have no reliable source of electricity.

A US-funded highway in the northern provinces of Afghanistan is disintegrating even before it’s been finished. By the time it came to buy construction materials, project money has trickled through so many agencies and contractors, that all contractors could afford was second rate goods requiring annual maintenance – an expense Afghanistan cannot afford.

The resulting paved road is little improvement over the dirt road it replaced.

The $15 million for the project originally came from USAID, which gave it to the United Nations (UN) Office of Project Services, which in turn hired The Louis Berger Group as a consultant. The UN also contracted the Turkish firm Limak to build the road itself, and Limak, in turn, hired a partner, an Afghan-US construction company, ARC Construction.

Dirt road

The project had begun as a campaign promise from Hamid Karzai. On the campaign trail in 2004, Karzai was trying to buy the loyalty of Afghans in warlord-controlled regions such as this northern territory, where the local commander was also running for president.

Karzai, the candidate favored by the US government, could promise big infrastructure improvements if he won, since the Bush administration had the aid money to back him up.

Now the highway needs yearly maintenance (which has not been funded) to withstand weather and traffic conditions.

A conference in London in early 2006 brought yet more pledges of aid money. More than 70 countries participated, and high-profile dignitaries such as Tony Blair and US secretary of state Condoleezza Rice spoke on the importance of rebuilding Afghanistan. But Afghans are skeptical about how the £5.7 billion pledged will be spent.

The majority of aid pledged worldwide is placed in the Afghanistan Reconstruction Trust Fund and administered by the World Bank and the Afghanistan Reconstruction Group.

Jean Mazurelle, the World Bank director in Kabul, estimates that 35 to 40 percent of all international aid sent to Afghanistan is “badly spent”.

He told the Agence France Press news agency, “In Afghanistan the wastage of aid is sky-high. There is real looting going on, mainly by private enterprises. It is a scandal. In 30 years of my career, I have never seen anything like it.” Mazurelle said the corruption and fraud have soured Afghans’ feelings toward the international community.

In the case of The Louis Berger Group, its contract to build 23 schools across Afghanistan has so far resulted in an average cost per classroom of £12,000, but its “model” 20-room school in Kabul cost a whopping £320,000.

In the United States, aid cash is doled out through twin spigots, USAID and the Pentagon. One of the ways that the Pentagon distributes money is via the Army Corps of Engineers.

The money is allocated according to the US’s own political, strategic, and military priorities, rather than according to what the recipient nation might consider most important.

Contractors – particularly private Western firms like Dyncorp and Halliburton – have proven as capable of shadiness as any government. One Afghan-US expatriate who has worked with foreign contractors in Afghanistan said, “The international companies are more corrupt than the local companies because they’re here short term, tax exempt, make a profit and leave.”

The Pentagon has hired hundreds of US contractors to work in Afghanistan, in effect privatising military and diplomatic operations. A visit to Bagram air base, where the US military houses most of its troops, reveals the extent of the corporate presence.

Employees of US companies from Kellogg, Brown and Root (KBR) – a subsidiary of Halliburton – to the Titan Corporation work inside the base building structures and interrogating prisoners.

Security makes up another huge sector of foreign business in Afghanistan.

According to the Afghan Investment Support Agency which keeps track of private companies working in Afghanistan, there are 25 foreign security companies, nine of which are joint ventures operating in the country.

They are mainly US, British, Australian and South African. The market for security in Afghanistan is brisk. Contractors cannot afford delays and attrition from sabotage and ambushes.

They hire private armies to protect their investments and will pay top dollar if the guards are well trained and have good reputations. The Western employees for these firms (such as Dyncorp, Blackwater, Global Risk Strategy and others) can earn up to £542 a day. The armoured cruisers they drive are worth about £65,000 each. Nearly all these guards are armed.

These companies, in conjunction with the military, decide how dangerous the country will be rated. Aid workers and other foreign employees have access to security alerts. After insurgent attacks, dire warnings circulate. Security companies in Kabul call this a “white city” – the colour of the ashen faces of the foreigners locked up in their houses.


With so much power, few of these security firms have legal licences to operate in Afghanistan. The need for regulation was exposed when Jack Idema, a former US Green Beret, was able to open his own private prison where he could torture and interrogate any Afghan he believed was involved with the Taliban.

Texas-based Dyncorp signed worldwide contracts with the US state department worth billions over the past two decades, and has been involved in security operations in Bosnia, Israel and Iraq, as well as in Afghanistan.

Dyncorp guards, many of whom were former city Swat team officers, developed a colourfully nasty reputation here. One Dyncorp guard, for example, was seen slapping the Afghan transportation minister. European diplomats reported threats and abuse directed at them from cocky US guards.

The weapon-wielding Westerners were notorious for their rudeness, breaking reporters’ cameras, bossing around dignitaries, and disrespecting the polite Afghan culture.

Dyncorp’s some 800 international employees in Afghanistan – about 95 percent Americans and the rest mostly South African – enjoy six figure salaries, free room and board and medical insurance. Dyncorp called on US police officers to join in Afghanistan with an annual starting salary of £54,000, £43,000 of it tax exempt.

“The money the Americans send for the Afghans goes right back into US company pockets,” said one senior official in the interior ministry.

On paper, it looks as though the international community has been awash in altruism and generosity toward Afghanistan. But most of the money allocated to Afghanistan never reaches Kabul. The US and the international community have a system, through world financial institutions, that treats the country like a massive money laundering machine.

The money rarely leaves the countries that pledge it. USAID gives contracts to US companies, and the World Bank and IMF give contracts to, companies from their donor countries, who take huge chunks off the top and hire layers and layers of subcontractors who take their cuts, leaving only enough for sub-par construction.

Quality assurance is minimal. Contractors know they can swoop in, put a new coat of paint on a rickety building, and submit their bill, with rarely a question asked.

The result is collapsing hospitals, clinics, and schools, rutted and dangerous new highways, a “moderniszed” agricultural system that has actually left some farmers worse off than before, and emboldened militias and warlords who are more able to unleash violence on the people of Afghanistan.

Fariba Nawa is an award winning journalist. Her full report, Afghanistan Inc, is available at

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