Global Policy Forum

By John Hilary

Donor dogma is threatening the prospects of reconstruction in Afghanistan and other countries alike

Despite all the problems of defeating the Taliban militarily, winning the peace in Afghanistan is proving almost as difficult as winning the war. Today's report on the reconstruction of Afghanistan from the House of Commons international development committee underlines the difficulties of rebuilding states which have been shattered by decades of conflict, particularly when security remains so elusive. Yet the report is curiously silent on some of the more fundamental problems caused not by the Taliban but by the ideological prescripts of the international donor community itself.

The committee's report rightly criticises the amount of international aid pouring into Afghanistan that completely bypasses official government channels. Of the massive $4.3bn in aid which the country is set to receive this year, the report suggests less than half will go through the government; official Afghan sources say that barely 20% has actually been routed through governmental channels. This creation of a parallel infrastructure of service delivery by UN and non-governmental agencies is a serious long-term threat to state building, and one that was wholly unnecessary given the fact that Afghanistan already had a functioning public sector in place. With pay in UN or NGO offices running at up to 20 times that of the Afghan civil service, thousands of experienced civil servants have now deserted their managerial positions in the public sector in order to take up jobs as drivers or translators within the aid industry.

Yet it has become increasingly clear that this sidelining of the public sector is a deliberate decision of the international community, based on the ideological preference for "small government" championed by officials of the World Bank and IMF. From the earliest days of the reconstruction effort, donors have chosen to obstruct the reconstruction of a functioning state apparatus by starving the public sector of funds. UN aid operations have received vastly more financial support than has been provided for civil service salaries in Afghanistan. In the immediate post-invasion period, donors pledged just $20m to pay the salaries of the country's 260,000 civil servants, while providing 90 times that amount to UN and non-governmental initiatives.

Ideology has stood in the way of reconstruction in other respects too. Most observers agree that grain subsidies are essential both for ensuring food security in Afghanistan (particularly during the winter months) and to encourage farmers away from opium production. Yet donors have refused to allow the Afghan government to provide such public subsidies, demanding instead that the poor be made to rely on market mechanisms alone to access food - even if that means "ugly outcomes" (starvation) in the short term. According to one insider account, when the Afghan finance minister asked why he was being prevented from providing such subsidies when the governments of the US, EU, Japan and India are all free to do so, the IMF delegate responded gaily: "Those are rich countries. They can afford to have bad policies."

Afghanistan is far from unique in suffering at the hands of donor dogmatism. Earlier this week I attended a meeting held by Unison at which public sector trade unionists from across southern Africa presented their experiences of life under World Bank and IMF hegemony. Workers from Zambia, Botswana, Swaziland and Malawi each described the additional burden inflicted on their overstretched public services as a result of donor insistence on retrenchment of public sector workforces. Health professionals told of public systems being fatally undermined as a result of the cost-cutting demanded by donors, at a time when the Aids pandemic means workers already have to put in longer and longer hours to meet their basic caseload.

The UK government is heavily implicated in driving forward this free-market ideology in states trying to deal with the effects of conflict. Not only is the UK identified as one of the foremost proponents of the neoliberal agenda in Afghanistan (where it is becoming increasingly unpopular), but it has also recommended similar treatment for economic recovery in Palestine. The five-point "economic roadmap" for Palestine published by the government in September demanded as its first priority that the public wage bill in the occupied Palestinian territories be slashed - despite the fact that public sector employment is one of the only sure sources of jobs at a time of crippling economic hardship in Palestine, and despite the government's own acknowledgement that it was public sector expansion in Northern Ireland that provided key employment opportunities during the Troubles there.

The net effect of promoting this dogmatic free-market approach to reconstruction is to create states that will not have the ability to deliver stability or development to their peoples. Government fragility is precisely the problem for failed states struggling to rebuild after conflict, so attempts to slim down the public sector even further simply condemn such states to dysfunctionality and long-term dependence on external aid. Perhaps it is time for us to start paying heed to those who have long maintained this to be the ultimate objective: the creation of a series of failed states in which the international donor community will be able to dictate policy and exercise control long into the foreseeable future.