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Afghans Get No Guarantees on Reconstruction Budget

U.S., British Officials Say They're Open to Request for More Authority Over International Funds

By N.C. Aizenman
Washington Post Foreign Service
Thursday, April 7, 2005; Page A27

KABUL, Afghanistan, April 6 -- U.S. and British officials said they were receptive to a recent request by Afghan President Hamid Karzai for more control over international funds being used to rebuild this war-ravaged country, but they offered no guarantees Wednesday at the conclusion of a three-day meeting between Afghan officials and representatives of more than 40 donor nations and agencies in Afghanistan's capital.

"This is something which will happen, I am confident, as time goes by, and as there is greater confidence in the capacity of the institutions of this country to manage" aid money, Frederick Schieck, deputy administrator of the U.S. Agency for International Development, said at a news conference following the 2005 Afghanistan Development Forum.

Charlotte Seymour-Smith, the Asia director of Britain's Department for International Development, went further, saying her government "strongly supported" funneling more aid through Afghan government ministries rather than distributing it directly to nongovernmental organizations and contract companies for specific projects.

About 93 percent of Afghanistan's recently adopted $4.75 billion budget for the coming year will come from foreign donors, and less than a quarter of that will be controlled by the government.

The arrangement dates to early 2002, when Afghanistan's fledgling interim authority lacked the capacity to administer large-scale aid projects. In his opening speech to the forum Monday, Karzai, who became Afghanistan's first democratically elected president in October, said circumstances had changed.

"The Afghan government, as the ultimate body accountable to the Afghan people, must also be better informed about, and play its due role in, steering the development process," he said. "The government must become the anchor for a more integrated, transparent and accountable development effort."

Karzai and other government leaders have also expressed concern that many of the 2,400 nongovernmental organizations registered in Afghanistan might be wasting international funds by providing their Western staffs with unnecessarily large salaries and perks, and that other nongovernmental organizations are simply private, for-profit companies claiming nonprofit status to get tax exemptions that allow them to win government contracts at the expense of Afghan firms.

Last week, Karzai's cabinet announced its approval of a draft law that would bar nongovernmental organizations from bidding for government projects.

Representatives of many nongovernmental organizations countered that their overheads averaged less than 14 to 25 percent and that the Afghan government was unfairly attempting to blame them for the slow pace of the country's development.

Despite billions of dollars in international assistance, Afghanistan remains one of the poorest, most underdeveloped nations in the world, ranking 173rd out of 178 countries on a 2004 index of human development.

Shortly before the conference, Karzai's office announced he would form a joint task force with donors to study Afghanistan's policy toward nongovernmental organizations.

Anwar Ahady, Afghanistan's finance minister, said another message the Karzai administration sought to drive home during the forum was the need for greater investment in Afghanistan's infrastructure and the importance of funding such ventures with grants rather than loans, which the government may have difficulty paying off.

"I think we got a somewhat sympathetic hearing on this, although we still haven't received an answer," Ahady said.

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