Financial Transparency Coalition

Integrity Watch Afghanistan

In June of this year, the U.S. Senate published a report evaluating U.S. foreign assistance to Afghanistan that emphasizes the unsustainability of the current foreign assistance strategy.  Of particular interest is the key point that the “U.S. government relies heavily on contractors in Afghanistan, but multiple reports have raised alarms about the lack of robust oversight and accountability for multi-billion dollar investments.”  The reality is that when these private companies are found guilty of corruption, the consequences, if any, are low.  Bennett-Fouch Associates and K5 Global allegedly left Afghanistan abruptly while owing their subcontractors two million dollars in 2010, and it took almost a year for the U.S. government just to suspend them.   This list continues with the Watan Group and the Louis Berger Group Inc. accused of wrongdoings; both companies are still currently working in Afghanistan.

These examples go a long way toward demonstrating a close and questionable relationship between private companies and governments, but what is the bigger picture?

Many reconstruction projects in Afghanistan fall to dust a few years after their inauguration due to poor quality material, corruption, lack of oversight and continuous control monitoring.  Average people in the countryside get roofs that leak, bricks that crumble and maintenance costs that are completely unsustainable.  The typical response from the West tends to be to look at the Afghan government for solutions.  While it is true that Afghanistan suffers from weak governance structures, low budget execution and high corruption, these are not the only contributors to Afghanistan’s problems.  The international private companies that acquire development contracts and operate outside the realms of transparency and beneficiary accountability are also a large part of the problem. The Afghan citizens, who should be the first priority, are dismissed from their own development process. Contracts are signed in the U.S. where only American jurisdiction applies, and the agencies responsible for holding these companies accountable are the farthest away from the problems.

In developed countries, fraud and embezzlement can damage the financial and investment systems resulting in a weaker economy. In developing countries, it can result in prioritization of the few and abuse of power and resources channeled through traditional power structures.  In humanitarian situations, the failure of aid programs can also result in renewed conflict and war as grievances and mistrust are high. Ultimately, the failure to hold these private companies accountable is counterproductive to the goals behind foreign aid disbursement.