U.S.-led Afghan reconstruction projects to end because of security dispute

By Rajiv Chandrasekaran
Washington Post Foreign Service
Friday, October 22, 2010; 10:59 PM

KABUL - U.S.-funded development firms are beginning to shut down massive reconstruction projects because the Afghan government has refused to rescind a ban on their use of private security guards, according to U.S. officials and aid workers here.

The decision to start shuttering the projects, collectively worth hundreds of millions of dollars, could have far-reaching effects on the U.S.-led military campaign against the Taliban, disrupting a central component of the strategy to counter the insurgency at a critical moment in the war. Programs to assist Afghan farmers and improve local government, which are vital to the overall U.S. effort to stabilize the volatile southern and eastern parts of the country, are among those that will be affected, the officials said.

The consequences of the ban on development firms employing private guards "will be catastrophic," said one U.S. official involved in the issue. "If these projects grind to a halt, we might as well go home. They are essential to the counterinsurgency strategy."

Another U.S. official said the ban would affect about $1.5 billion in ongoing reconstruction work. More than 20,000 Afghans will lose jobs in road-building and energy projects alone, the official said.

The prohibition, which was enacted by President Hamid Karzai, has emerged as the latest flashpoint in the oft-strained U.S.-Afghan relationship, raising new questions about his willingness to cooperate with the international community and potentially complicating crucial year-end assessments of the war effort by the White House and NATO.

The ban, which goes into effect Dec. 17, affects all development firms and non-governmental organizations, including those funded by other countries and the United Nations. It also applies to private contractors who guard supply convoys for the military bearing food, fuel and other essential supplies, as well as to international banks and other private entities whose services support reconstruction work.

Diplomats and representatives of the companies contend that private security guards are essential to operations in much of the country because of the threat of insurgent attacks and criminal activity. But Afghan officials argue that private security contractors operate with little oversight or accountability and sometimes function as private militias that are beyond the control of the country's police force and army.

Most of the private security companies employed by development firms rely on Afghan guards who are supervised by foreigners. Some of the firms are Afghan-owned, while others are international firms that operate in multiple countries.

The Afghan government wants development workers and their projects to be guarded by police officers and soldiers, a goal that diplomats and aid workers say is unrealistic because the local government security forces are corrupt, ill-trained and not numerous enough to do the job. The development firms have also said they would be unable to insure their employees - a key prerequisite for operations in a war zone - if they are unable to employ private guards.

"If we don't have private security, we cannot operate in Afghanistan," said one development executive, who, like others, spoke on the condition of anonymity because of the sensitivity of the issue. "It's not open to negotiation."

U.S. and NATO diplomats have been working furiously to soften the prohibition since it was authorized over the summer. Under pressure from Gen. David H. Petraeus, the top U.S. and NATO commander here, Karzai's national security council issued an exemption Sunday for military bases, embassies, diplomatic residences and diplomatic convoys.

Diplomats and aid workers initially assumed that the failure to mention development organizations was an oversight that would be corrected. But Karzai on Wednesday said the ban would not be amended. "These companies are closed - that is it," he said, referring to security firms not working for diplomats or the military.

Karzai's chief of staff, Umer Daudzai, said in an interview Thursday that the president does not intend to grant an exemption for development firms. "We know some projects may be delayed. We know some projects may close down even," he said. "But it's worth it because the other side [retaining private security contractors] is even more dangerous."

He said the decision was made "after a thorough examination" by the Afghan government. "We did not take this decision lightly," he said.

Daudzai said the Afghan government would be open to an extension "of a few months" if development firms and the foreign governments that fund them propose "a good plan of action" to transfer security responsibilities to the Afghan police and army, perhaps by integrating some of the Afghan private guards into government security ranks. "If the roadmap is a convincing one, then there is room to negotiate a compromise," he said.

U.S. officials have voiced support for Karzai's overall goal of disbanding private security companies, but they have insisted that several years are needed to complete the transition. "We have publicly committed to the goal of moving away from private security - we just need to find a way to implement it that works for everyone," a third U.S. official involved in the issue said.

Although the ban does not take effect for nearly two months, some development firms have started closing or suspending their operations because of the time required to unwind activities in an orderly way. One of them, Development Alternatives Inc. of Bethesda, has begun ceasing work on a program to improve local governance across the country, including in southern and eastern provinces that are the focus of U.S. military activities.

DAI has informed the U.S. Agency for International Development that it intends to cancel 330 projects totaling $21 million and not launch $6.2 million more in new activities, according to U.S. officials. DAI spokesman Steven O'Connor said that the firm "was winding down the [Local Governance and Community Development] project early as a result of the decree."

Another large development firm, International Relief and Development of Arlington, is "making the moves to leave," another U.S. official said. The company, which implements agriculture programs worth $431 million, said in a statement that it has not yet begun demobilizing and is working "to seek a mutually satisfactory conclusion to this critical issue."

"Terminating contracts and grants is a really delicate process and it takes time," one development specialist in Kabul said. "You can't do this overnight."

Aid workers and development executives agreed to discuss the issue because they believe public attention will increase pressure on the Afghan government to reverse its position.

The bulk of the shutdown will commence Nov. 1, when firms lay off local staff, terminate subcontractors and shut provincial offices, U.S. officials and development firm representatives said. After that point, several officials said, it will be difficult to restart programs without significant delays.

Of particular concern to U.S. and NATO military officials is the effect of a shutdown on counterinsurgency operations in Kandahar province, where USAID's agriculture and governance programs are supposed to be implemented immediately after U.S. Army units clear areas of insurgents.

"This is the soft power that works hand in hand with the military's hard power," another development executive said. "You can't do counterinsurgency without these programs."

Several Americans involved in the issue said the stakes may become clear to Karzai and other senior Afghan officials only on Dec. 17.

They noted that private security contractors guard the power plant that supplies electricity to Kabul. "That's when the lights are going to go out in this city," one of them said.

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