Corruption, Nation-building and Money-Laundering

Consider this: the total annual cost for the combined 352,000 strong Afghan National Security Forces (ANSF) – comprising ministries of Defense and Interior – is $5.5 billion a year. After investing billions on the Afghan security apparatus since 2003, the US DOD has no direct oversight of Afghan National Army’s (ANA) personnel data. Neither has the Afghan MOD an electronic payroll data system. Instead, it calculates ANA salaries by hand, leaving limited assurances that personnel receive accurate salaries. This is no fiction, rather part of a testimony and regular reports from the office of John F. Sopko, US Special Inspector General for Afghan Reconstruction (SIGAR).

In its April 2015 Quarterly Report to Congress, SIGAR concludes that absence of electronic records means minimal oversight of US funding for ANA salaries, making it difficult to ensure the funds are being used to pay authorized ANA personnel their correct salaries.

Despite over13 years of engagement with the US-led coalition forces the ANA attendance data, upon which U.S.-funding for salaries relies, is minimally controlled, inconsistently collected, and lacking direct oversight.

Emma Sky, a British civilian who volunteered to help rebuild Iraq after the overthrow of Saddam Hussein in 2003 has similar tales to tell in her book, The Unraveling: High Hopes and Missed Opportunities in Iraq. Sky details how and why the Iraq adventure failed. In a brilliant recap of her several years of volunteerism in Iran , Sky exposes the failures of the policies of both American Republicans and Democrats, and the lessons that must be learned about the limitations of power. The book provides an eyewitness account on American efforts to transform a country which had reeled from decades of war, sanctions, and brutal dictatorship before descending into the current insurgencies and civil war. She also explains how the West-favorued corrupt political elites used sectarianism to mobilize external support for themselves in the name of nation-building.

Some of the conclusions that Sky draws from Iraq, and which hold true even for Afghanistan, where the nation-building project suffered similar setbacks with the result that insurgency there is still raging and the crime and corruption rampant. Beneficiaries of this war economy have been only a few though, something that John Sopko, SIGAR, touched on as well: “You can’t spend $104 billion dollars (for reconstruction) in such a small country and not have some success. But the question we’re really asking is ‘could we have done better? Could we have done more? Could we have had more success?’ And those are the issues we’re faced with.”

Afghanistan and Iraq undoubtedly exemplify the downsides of the hard power by external forces.

They prove that military interventions and or forced regime changes in the name of nation-building are extremely subjective undertakings.

Secondly, tinkering with existing socio-political structures without enough sensitivity for the local culture can throw up unforeseen dynamics. (IS, Al-Qaeda, and unintended consequences such as reinforcement of Shia forces in the region as a result of empowerment of Shia Muslims in Iraqi). Or what happened to Libya following the US-led invasion that has splintered the country into fiefdoms.

Beyond doubt, geo-politically driven military interventions give birth to a war economy and invariably open the floodgates to corruption. With these come the private contractors. On average, 1.5 contractors were required for every single US soldier who served in Iraq and Afghanistan.

In one instance alone, a SIGAR investigation uncovered corruption in the award of a nearly $1 billion US-funded, multi-year Afghan Ministry of Defense (MOD) fuel contract. This centered on four contractors that had engaged in price-fixing, bid-rigging, and bribery increasing the contracts cost by more than $214 million – meaning thereby over 20 per cent was going just into kickback.

President Ashraf Ghani responded positively to SIGAR by either firing or blacklisting 43 individuals and entities, identified as part of corruption or supporters of the insurgency. They will be barred from receiving US funds.

Due to fundamental problems within the Afghan government’s procurement system, extremely prone to corrupt practices, the US DOD is moving funding for 15 contracts, valued at $922 million, off-budget for DOD to administer and manage directly, SIGAR report said.

In fact the May 2-3 Afghan stakeholder’s meeting at Doha, Qatar organized by Pugwash, too, identified corruption and the production/selling of drugs as among the most serious problems of Afghanistan.

Another lesson was that military interventions indirectly strengthen rebels and insurgents too; for instance , the desire for safe passage of the US-NATO cargo to its destination within Afghanistan translated into pay-offs to Taliban leaders and warlords. Private US security contractors used to employ Afghan companies to make sure the cargo reaches home safely. Part of the security fee (at one state 200 million dollars per year) would go to various Taliban commanders.

This happened the US government alone spent over half a trillion dollars on its security operations, including nearly nine billion dollars on counter-narcotics in Afghanistan. Despite that, the country is the global leader in illicit opium cultivation and production, according to SIGAR.

SIGAR cautions also against the consequences of abrupt US and NATO pullout from a country that remains largely dependent on foreign support; Afghanistan’s domestic revenues in 2014 paid for only 33%, or $1.7 billion, of the country’s total budget expenditures of $5.2 billion, with donor contributions making up the difference.

Big questions over management of reconstruction funds also loom large as US Embassy in Kabul will reduce its staff by nearly 40 percent. Some $110 billion remain in the pipeline for the Afghan reconstruction and officials worry about the increased probability of misuse or abuse of these funds the way it happened in the past.

Unfortunately, while the US systems allow self-criticism through mechanisms such as SIGAR, there is little inclination among leaders and officials in countries such as Afghanistan or Pakistan to also look the possibility of how corrupt practices keep undermining peace efforts and development projects.

While prima facie, factors such as international geo-politics,  non-state actors (Taliban, IS and Al-Qaeda) keep the insurgency alive, most people tend to overlook  the possibility of the new vested interest that the war economy produces as being one of the drivers of conflict. Those associated with the defense contracting business – security, supplies, surveillance – do have a natural interest in continued violence. Whether Afghanistan, Iraq or Balochistan (in Pakistan), these hotspots do expose the downside of high-handed hard power approaches.

A challenge for us all therefore is how to neutralize this vested interest, or is it possible at all to do so? Not impossible perhaps, but probably very difficult because of the overlap of interests of certain groups and individuals. Often, those responsible for guarding the gate to corruption, themselves are part of the predators.

By Imtiaz Gul, the writer is the executive director of the Center for Research and Security Studies.  

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TESTIMONIALS

“For the past nine years, I have been living in Pakistan. Being part of different youth initiatives here has allowed me to witness the incredible warmth and hospitality of the Pakistani people, and how they empathize with young Afghans like me. The Pak-Afghan Youth Peace Initiative by CRSS has helped me realize my potential as a youth and refugee leader. I’m determined to spread the messages of peace and friendship that I am taking away from this fellowship.”

Zainab Saee

Afghan Refugee