The war on terror has brought renewed focus on nation- building and is becoming a part of the West's efforts to deny terrorists sanctuary in failed and dysfunctional nation-states. But exactly what value for money are we getting from channelling foreign aid dollars through foreign aid non-governmental organisations for this nation-building?
A timely warning comes from Afghanistan, where the Government has just announced an audit of the humanitarian aid sector that is aimed at weeding out corruption and the misuse of international aid money. The investigation was announced the day after the resignation of planning minister Dr Ramazan Bashardoost, who was heavily criticised by the aid industry over his proposal to dissolve more than 2000 NGOs.
Bashardoost's problems with Afghanistan's aid sector were essentially fourfold.
First and foremost, Bashardoost was scathing about the effectiveness and efficiency of NGOs in Afghanistan. As Bashardoost complained, "I have yet to see an NGO that has spent 80 per cent of its money for the benefit of the Afghans and 20 per cent for their own benefit". He went on to say that, "international NGOs get big amounts of money from their own nations just by showing them sensitive pictures and videos of Afghan people, and there are even some individuals who give all their salaries to NGOs to spend it on charity here, but they [NGOs] spend all the money on themselves, and we are unable to find out how much money they originally received in charitable funds".
When Bashardoost was asked about the effectiveness of NGOs working in Afghanistan, he said, "I haven't seen any NGO at all which works efficiently yet", adding that they should use cars costing $US12,000 ($A15,500) instead of $A51,600.
According to the former minister, out of $A5.8 billion pledged to Afghanistan by international donors at the Tokyo conference in 2003, about a third has been allocated to international NGOs, the same again to the United Nations, and only the remaining third directly to the government of Afghanistan. Given that it will be the Karzai Administration and not the large international NGOs who will be held accountable by the Afghan people for the success or failure of the reconstruction effort, it is perhaps not surprising that there is uneasiness.
Second, Bashardoost was critical of NGOs and their tax-exempt status within Afghanistan.
Their tax-exempt status coupled with the ability of secure lucrative government contracts contrasted with commercial companies, who actually would pay tax to the Government.
Bashardoost attributed the NGO success to their cosy relationships with senior government officials, including ministers, some of whom were formerly their employees. He wanted "the reconstruction carried out economically, and to be handled by private companies which are be under the control and supervision of the government".
Third, Bashardoost was critical of the fact that many qualified government employees had gone to work for NGOs where the salaries were higher, depriving the fledgling Karzai Government of the best people when it needed them most.
Fourth, Bashardoost believed that there were too many NGOs in Afghanistan. He complained there were some so-called NGOs that operated for profit, like private companies, a common complaint all over the developing world.
His concerns about local NGOs were confirmed by a spokesman from CARE who conceded that of the more than 1500 national and more than 300 international NGOs registered with the Ministry of Planning, the majority of these agencies were not real NGOs. "They are either NGOs for tax purposes or they are opportunists that have set up NGOs to get the resources and steal resources from the Afghan people", CARE's advocacy coordinator said.
All of this comes at an awkward time for the aid industry, as it continues to whine for larger budgets. Before this happens, it is time that we started re- examining just exactly how the money is being spent. We owe the Afghans and the rest of the developing world nothing less.
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