Karzai: cap in hand

At a conference for donor states in Paris this week, Afghan President Hamid Karzai will present his audience with a 5,000-page document offering a vision for Afghanistan's next five years and asking for $40 billion to make it happen.

The Afghanistan National Development Strategy is the fruit of two years' work and consultations that reportedly involved 17,000 people. It sets three priorities: building up the army and police force, improving infrastructure, and improving the livelihoods of the majority of Afghans who depend on agriculture. It puts a price tag on each one.

Karzai will ask foreign donors to bankroll four-fifths of the budget for his plan. More of the total aid money would trickle through government coffers, while independent donor bodies, ranging from government aid agencies to independent charities, will be pressed to align their spending with the national framework. The plan also calls for a decline in the ratio of aid to GDP as the economy expands and tax collection picks up.

Delegates will admire Karzai’s chutzpah. Yet many will have reservations about channelling more cash to an administration widely seen as corrupt, lethargic, and powerless outside Kabul.

Proposed ANDS budget ($bn)
	2008/09	2009/10	2010/11	2011/12	2012/13
Source: ANDS
Afghan revenue	0.9	1.1	1.4	1.6	1.9
Foreign aid	6.5	5.0	4.8	4.4	3.8

Chorus of disapproval

Afghanistan has soaked up some $15 billion in foreign aid since 2001, and just as much criticism over how the money has been spent. Karzai’s foreign partners will wonder whether contributing to the new development plan is merely throwing good money after bad.

• Good intentions. An umbrella group of NGOs published a report in March which claimed that much pledged aid never materialises, and the funds which make it through are often wasted, with some 40% returning to the West in consultants' pockets.
• Brain drain. Well-funded foreign organisations have even detracted from Afghanistan's state capability by luring the country's best and brightest away from public service and into less useful jobs, like driving foreign contractors around the country.
• Leaky coffers. The World Bank has joined this dirge of criticism, concluding in a June 4 assessment that 'little headway' has been made against corruption.

Growing disillusionment with the president himself does not help matters. Director of National Intelligence Michael McConnell recently suggested that the president may control no more than 30% of Afghanistan's territory. Karzai is derisorily referred to in some quarters no longer as president of Afghanistan, but merely 'mayor of Kabul'.

While Karzai’s financial demands are steep, he knows his foreign partners are likely to cough up. Yet it will not help wean the country off its addiction to foreign aid, which has made up around 60% of GDP over the past five years. Of this huge flow of capital, about two-thirds circumvents government channels altogether, threatening to leave the government apparatus irrelevant.

There is one feather in Karzai's cap: his ability to forge consensus, both within Afghanistan, and between the Kabul government and its foreign backers. The two-year process also solicited the input of village and provincial officials. By getting foreign governments to put their money where their mouth is, Karzai could also shore up his international backing, with knock-on effects for his position at home.