The kind of help that isn't

By my count, at least $11 billion out of $15 billion in aid to Afghanistan has been squandered, having been siphoned off as corporate profit for companies from occupying countries or has been deemed unaccounted for by the government there. However, even this figure understates the waste as it apparently does not include the exorbitant salaries of aid consultants*:

Corruption and incompetence cripple reconstruction effort, say aid workers

Clancy Chassay in Kabul
The Guardian, Thursday 19 February 2009

Chronic mismanagement and profligacy are blighting reconstruction efforts in Afghanistan, international aid officials have warned, wasting up to a third of the $15bn (£10.55bn) in funding already delivered and deepening local resentment towards foreign troops stationed there.

Senior British, US and local aid workers have described a number of problems including bribery, profiteering, poor planning and incompetence. The overall effect has been to cripple the development effort structured under the Bush administration's insistence on an unregulated and profit-driven approach to reconstruction...

Sayeed Jawed, the chairman of the Agency Coordinating Body for Afghan Relief (Acbar), an umbrella organisation for local and international NGOs operating in Afghanistan, made similar allegations about profiteering. "The budgets should not be subcontracted away like this," he said. "Maybe once, but not six times. There should be a limit to the amount of money made. There really are no records of how much money is spent, where it goes and where it came from. There is corruption but there is no way of documenting it."

The Afghan government now says $5bn, a third of all the international aid delivered, cannot be accounted for.

More than two-thirds of all aid bypasses the government in Kabul completely, and according to a recent Acbar report, less than 40% of technical assistance to Afghanistan is coordinated with the government. Some aid officials attribute this to high levels of corruption within the government itself.

Among the greatest drains on the aid budget are the sums paid to foreign consultants. "We have seen massive waste in technical assistance in the form of expatriate consultants," said Matt Waldman, who heads Oxfam's Kabul office and who authored the Acbar report. "Despite the fact that thousands have come and gone with very little impact, the cost of these consultants remains between $200,000 and $300,000 a year [each]." Such a salary equates to about 200 times the amount paid to a local Afghan employee.

More than 40% of aid goes back to donor countries in corporate profits - an estimated $6bn since the start of reconstruction seven years ago. According to Acbar, profit margins for foreign contractors are sometimes as high as 50%. A lack of accountability provides a smokescreen for such excesses, making it difficult to establish how much is being made at each stage of subcontracting... (link)

* In the article, Matt Waldman indicates that thousands of aid workers have been paid on average $250,000 a year. Supposing that 2,000 one-year contracts have been inked over the last 8 years (i.e. 250 per year for eight years), that puts the accumulated costs of their salaries at $0.5 billion.