Afghanistan: The Way Forward
Why does half of all U.S. assistance to Afghanistan still return to the United States in salaries and profits?
- If the United States continues to spend $1 billion in development aid and up to $100 billion on military activities, a comprehensive approach remains unlikely.
- Stronger governance mechanisms, while critical, cannot replace the long-term security provided by economic opportunity.
- The United States should link guaranteed purchases of Afghani farm products to guaranteed expenditures in emergency food supplies.
The U.S. administration says that an effective exit strategy from Afghanistan requires a more comprehensive approach to intervention, particularly strengthening the judiciary and police force.
But what about strategies for raising Afghanistan's stake and participation in the global economy?
Stronger governance mechanisms, while critical, cannot replace the long-term security provided by economic opportunity.
Adding more diplomats for reconstruction and development is not enough to swing the pendulum towards a comprehensive approach, although subsequent calls to donors to “buy local products” and U.S. military plans to help grow non-opium products hint at elements that could provide employment.
Thus far, U.S. spending on infrastructure and education — while both key sectors — has shortchanged Afghanis in terms of dollars invested per job created.
This, in turn, has driven up the cost of local labor and construction for domestic businesses, created dependency on foreign goods and services and resulted in half of U.S. assistance (representing 50% of Afghanistan's licit economy and 90% of public expenditures) returning to the United States in salaries and profits, even when contractors hire locally.
But providing substantial, long-term guaranteed purchases to Afghanistan's agricultural sector could begin the process of consolidating a steady stream of income for the over 70% of Afghanis relying on domestic agriculture for their daily bread. Only half a billion in aid has gone towards agriculture since 2001, while 2.5 million Afghanis face drought and food insecurity.
While an economic-security strategy of substituting other crops for opium has long been advocated (poppy farmers have switched to producing food when prices have risen despite the price of poppies remaining ten times higher), there has been no clear and consistent strategy for maintaining prices of non-opium crops.
The United States could start by linking guaranteed purchases of Afghani farm products to guaranteed expenditures in emergency food supplies. Recall the global food crisis that preceded the financial crisis.
Since the United States will continue to be a major donor of food aid or the financing of food aid, huge efficiencies would be gained by maintaining emergency food stocks overseas. These can be locally managed and distributed during a food crisis, resulting in less time, money and carbon dioxide emissions involved than in the transport of U.S. stocks. (After all, the U.S. food donation budget has already been cut recently because of oil price hikes.)
Moreover, the provision and facilitation of food relief will grow as the United States and other lead carbon dioxide emitters assist countries least responsible for emissions so that they may build resilience to the drought, floods and water scarcity exacerbated by climate change and associated natural disasters.
Hiring Afghani farmers in support of broader U.S. interests could better align our foreign aid, humanitarian relief and climate change priorities — ideally attracting both critics and supporters of aid and overriding objections from farmers in industrialized countries concerned about their own subsidies. (Congress has in the past rejected food donations being sourced from the developing world, rather than from U.S. farmers).
Stable, long-term price guarantees (significantly higher than the market rate but lower than opium) for Afghani produce will also help alleviate domestic shortages, as the 2007-2008 grain shortage was partly due to poppies replacing wheat.
In a related point, value-added products that significantly extend the life of emergency food supplies could also be purchased. Linking small producers to purchasing, processing and distribution efforts throughout the country would provide balance to the future entry of global agribusiness into a nascent market.
Regular income for farmers will also increase demand for related support services, including small-scale credit institutions (employing women's networks rather than traditional havaladers linked to the opium trade) and drought-resistant farming technologies.
The United States has recognized the necessity of bottom-up approaches in other regions, and the need to create jobs through our buying — not just our giving — power in our own domestic crisis context. Yet it has not articulated how to achieve this through a partnership with Afghanistan, despite the security imperative.
If the United States continues to spend $1 billion in development aid and up to $100 billion on military activities, a comprehensive approach remains unlikely.
The exponential difference between military and economic spending needs to be reduced, and more jobs need to be created. A U.S.-financed stimulus package for Afghanistan should be weighted accordingly.