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" ! COMMITTEE PRINT 

112TH CONGRESS

1st Session 

S. PRT. 

2011

112–21 

EVALUATING U.S. FOREIGN 

ASSISTANCE TO AFGHANISTAN 

A MAJORITY STAFF REPORT 

PREPARED FOR THE USE OF THE 

COMMITTEE ON FOREIGN RELATIONS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

JUNE 8, 2011 

Printed for the use of the Committee on Foreign Relations 

Available via World Wide Web: 

http://www.gpoaccess.gov/congress/index.html 

COMMITTEE ON FOREIGN RELATIONS

JOHN F. KERRY, Massachusetts, Chairman

BARBARA BOXER, California 

ROBERT MENENDEZ, New Jersey 

BENJAMIN L. CARDIN, Maryland 

ROBERT P. CASEY, JR., Pennsylvania 

JIM WEBB, Virginia 

JEANNE SHAHEEN, New Hampshire 

CHRISTOPHER A. COONS, Delaware 

RICHARD J. DURBIN, Illinois 

TOM UDALL, New Mexico 

RICHARD G. LUGAR, Indiana 

BOB CORKER, Tennessee 

JAMES E. RISCH, Idaho 

MARCO RUBIO, Florida 

JAMES M. INHOFE, Oklahoma 

JIM DEMINT, South Carolina 

JOHNNY ISAKSON, Georgia 

JOHN BARRASSO, Wyoming 

MIKE LEE, Utah 

FRANK G. LOWENSTEIN, Staff Director

KENNETH A. MYERS, JR., Republican Staff Director

(II)

C O N T E N T S 

Page 

Letter of Transmittal ............................................................................................... v 

Executive Summary ................................................................................................. 1 

Why Foreign Assistance to Afghanistan Matters ................................................. 5 

President Obama’s Foreign Assistance Strategy for Afghanistan ....................... 6 

Using Development Dollars to Support COIN ...................................................... 8 

COIN Theory and Stabilization ....................................................................... 8 

Agriculture and the Challenges of Stabilization ............................................ 10 

Consequences of Stabilization on Local Communities ................................... 12 

The Challenges of Spending U.S. Aid Dollars ....................................................... 13 

Political Versus Development Timelines ........................................................ 14 

Limited Contractor Oversight ......................................................................... 15 

On-Budget Versus Off-Budget Funding .......................................................... 18 

Capacity Building Using Technical Advisors ................................................. 21 

Transitioning to Afghan Ownership ............................................................... 23 

Fiscal Sustainability for the Afghan Government ......................................... 24 

Case Studies ............................................................................................................. 25 

Case Study A: Success of National Programs With Local Buy-in—The National Solidarity Program and Basic Package of Health Services ................... 25 

Case Study B: Issues of Sustainability—The Performance-Based Governors 

Fund ...................................................................................................................... 28 

Recommendations .................................................................................................... 29 

Annex—Academic Literature Review: Development and Counterinsurgency .... 31 

APPENDIXES

APPENDIX I: Total U.S. Assistance to Afghanistan by Fiscal Year ................... 34 

APPENDIX II: USAID Funding by Province in Afghanistan, FY 2009–2010 .... 35 

APPENDIX III: USAID Funding by Province in Afghanistan, FY 2011 ............ 36 

APPENDIX IV: USAID/Afghanistan: Capacity Development Programs With 

GIRoA .................................................................................................................... 37 

APPENDIX V: Capacity Building Programs in Afghanistan—INCLE ............... 38 

APPENDIX VI: Letter From Deputy Secretary of State Thomas R. Nides 

to Chairman John F. Kerry on June 6, 2011 ..................................................... 39 

APPENDIX VII: Letter From USAID Administrator Rajiv Shah to Chairman 

John F. Kerry on June 1, 2011 ........................................................................... 41 

(III)

LETTER OF TRANSMITTAL 

UNITED STATES SENATE, 

COMMITTEE ON FOREIGN RELATIONS, 

Washington, DC, June 8, 2011. 

DEAR COLLEAGUES: This report takes a close look at how the 

United States is spending civilian aid dollars in Afghanistan to 

make sure we are pursuing the most effective strategy in support 

of our national security objectives. We spend more on aid to Afghanistan than any other country and the environment in which 

the State Department and U.S. Agency for International Development (USAID) operate is difficult and dangerous. With the upcoming transition to an Afghan security lead in 2014 and the increased 

responsibilities our civilians will absorb from the military, we have 

a critical planning window right now to make any necessary 

changes to support a successful transition. 

This report is meant to continue a close working relationship between the Senate Foreign Relations Committee and the Obama administration on ensuring that our assistance programs in the region meet their objectives. Given this committee’s jurisdiction to 

conduct oversight of the State Department and USAID and the levels of funding in Afghanistan, I asked the committee’s majority 

staff to conduct a thorough review of U.S. civilian assistance. This 

report is the product of two years of staff research and travel. It 

is intended to provide constructive and timely guidance for administration officials at every level who are working to guarantee that 

our taxpayer-financed aid to Afghanistan is spent in the most effective and efficient manner possible. 

Sincerely, 

JOHN F. KERRY, 

Chairman. 

(V)

(1) 

1The figure of $18.8 billion refers to total Function 150 assistance to Afghanistan between 

FY2002–2010, which excludes total Function 050 assistance for the Afghan Security Forces 

Fund (ASFF), CERP, and counternarcotics. See Appendix I for more details. 

EVALUATING U.S. FOREIGN 

ASSISTANCE TO AFGHANISTAN 

EXECUTIVE SUMMARY

The Senate Foreign Relations Committee has been at the 

forefront of examining progress in Afghanistan. This report—which is the most comprehensive congressional investigation to date of our foreign assistance to Afghanistan— 

continues that effort. Building on 2 years of staff research 

and travel, the report focuses on funding appropriated by 

Congress to the State Department and the U.S. Agency for 

International Development (USAID) in the Function 150 

account. It does not cover U.S. military aid, such as the 

Commander’s Emergency Response Program (CERP), 

which we believe deserves closer scrutiny. 

The committee provided a draft of this report to the State 

Department and USAID. In a response letter to Chairman 

John F. Kerry on June 6, Deputy Secretary of State Thomas R. Nides underscored the importance of sustainability 

and expressed support for our recommendation to develop 

a multiyear assistance strategy. His comments are reproduced in Appendix VI. USAID Administrator Rajiv Shah 

acknowledged the need to do more to spend our aid money 

effectively in Afghanistan and provided several recent examples of how USAID is addressing the issues raised in 

this report. His comments are reproduced in Appendix VII. 

Today, the United States spends more on foreign aid in Afghanistan than in any other country, including Iraq. After 10 years and 

roughly $18.8 billion in foreign aid, we have achieved some real 

successes.1 There has been a sevenfold increase in the number of 

children attending school and significant improvements in health 

care. But we should have no illusions. Serious challenges remain 

that will prevent us from achieving our goals unless they are addressed. 

Foreign assistance can be a vital tool for promoting stability in 

Afghanistan. Given the security challenges and limited resources at 

its disposal, USAID has performed admirably and assumed considerable risks in support of the President’s civil-military strategy for 

2 

2 USAID and its implementing partners have lost over 370 personnel in Afghanistan over the 

last 7 years. Administrator Rajiv Shah, Ninth Annual Princeton Colloquium to address ‘‘Rethinking U.S. Foreign Aid and Policy,’’ Woodrow Wilson School, Princeton University, April 9, 

2011. 3 Conversations with senior Embassy Kabul officials, May 2011. 

4For more information, see: Response to Questions for the Record submitted to Secretary of 

State Hillary Rodham Clinton by Chairman John Kerry, March 2, 2011, Nos. 21 and 22. Note 

that we include the ‘‘southwest’’ in our calculations for USAID resource allocations in Afghanistan’s ‘‘south and east.’’ See Appendixes II and III for funding breakouts by province for FY 

2009–2010 and FY 2011. According to USAID’s Rajiv Shah, ‘‘roughly 65–70 percent of all our 

resources are being spent in those [south, southwest, and east] areas.’’ Shah’s comments are reproduced in Appendix VII. 5Dr. Ashraf Ghani, ‘‘Preparing for Transition: A Policy Note on Development,’’ policy memo 

sent to Senate Foreign Relations Committee Majority Staff, May 12, 2011. 6 According to a former development specialist at USAID’s Mission in Kabul, the staff turnover 

rate in Afghanistan is more than 85 percent a year. Rajiv Chandrasekaran, ‘‘U.S. military dismayed by delays in 3 key development projects in Afghanistan,’’ Washington Post, April 28, 

2011, http://www.washingtonpost.com/world/us-military-dismayed-by-delays-in-3-key-development-projects-in-afghanistan/2011/04/22/AFD6jq8Elstory.html. 

Afghanistan.2 However, we believe the administration can be more 

effective in how it spends aid in Afghanistan. U.S. assistance 

should meet three basic conditions before money is spent: our 

projects should be necessary, achievable, and sustainable. 

The State Department and USAID are spending approximately $320 million a month on foreign aid in Afghanistan.3 In part, the 

administration has been using aid to ‘‘win hearts and minds.’’ For 

instance, roughly 80 percent of USAID’s resources are being spent 

in Afghanistan’s restive south and east. Only 20 percent is going 

to the rest of the country.4 Most of the funds in Afghanistan’s 

south and east are being used for short-term stabilization programs 

instead of longer term development projects, though that balance 

may now be changing. 

The evidence that stabilization programs promote stability in Afghanistan is limited. Some research suggests the opposite, and development best practices question the efficacy of using aid as a stabilization tool over the long run. As discussed below, the unintended consequences of pumping large amounts of money into a 

war zone cannot be underestimated. 

We must understand the impact of our assistance—positive and 

negative—on the local population. For instance, we are investing 

heavily in agriculture to provide alternatives to joining the Taliban 

and discourage poppy cultivation. While this may be the right approach, the strategy has raised expectations and changed incentive 

structures among Afghans. The administration is pursuing an assistance strategy based on counterinsurgency theories that deserve 

careful, ongoing scrutiny to see if they yield intended results. 

Foreign aid, when misspent, can fuel corruption, distort labor 

and goods markets, undermine the host government’s ability to 

exert control over resources, and contribute to insecurity. According 

to the World Bank, an estimated 97 percent of Afghanistan’s gross 

domestic product (GDP) is derived from spending related to the 

international military and donor community presence. Afghanistan 

could suffer a severe economic depression when foreign troops leave 

in 2014 unless the proper planning begins now.5

The administration is understandably anxious for immediate results to demonstrate to Afghans and Americans alike that we are 

making progress. However, insecurity, abject poverty, weak indigenous capacity, and widespread corruption create challenges for 

spending money. High staff turnover,6 pressure from the military, 

3 

7 According to James Kunder, former USAID acting deputy administrator, ‘‘it’s time to focus 

on the underlying reason our fighting forces feel inadequately supported: There are a thousand 

Defense Department personnel for every one USAID employee around the world. Administrations and Congresses controlled by both parties allow this preposterous imbalance in capability 

to continue. This particular Congress has gone one better, deeply cutting USAID and State Department funding despite warnings from Defense Secretary Robert M. Gates and uniformed 

commanders that inadequate civilian capacity means more American soldiers deployed and, regrettably, more dead and wounded.’’ James Kunder, ‘‘Afghan Aid Efforts are Crucial to the War 

Effort,’’ Letter to the Editor, Washington Post, May 3, 2011, http://www.washingtonpost.com/ 

opinions/afghan-aid-programs-are-crucial-to-the-war-effort/2011/05/01/AFFhLZjFlstory.html. 8The figure of $1.25 billion includes USAID estimated costs on capacity-building in Afghanistan (see Appendix IV) and INL current task order year spending on capacity-building projects 

in Afghanistan (see Appendix V). 

imbalances between military and civilian resources,7 unpredictable 

funding levels from Congress, and changing political timelines have 

further complicated efforts. Pressure to achieve rapid results puts 

our civilians under enormous strain to spend money quickly. 

We need to take a closer look at how we are spending money in 

Afghanistan and the impact it is having on the Afghan state. The 

U.S. Government relies heavily on contractors in Afghanistan, but 

multiple reports and the recent crisis at Kabul Bank have raised 

alarms about the lack of robust oversight. Most U.S. aid bypasses 

the Afghan Government in favor of international firms. This practice can weaken the ability of the Afghan state to execute its budget, lead to redundant and unsustainable donor projects, and fuel 

corruption. The United States has committed to funding more aid 

directly through the Afghan Government, but stronger measures 

must first be taken to ensure greater accountability of our funds. 

The U.S. strategy is focused on building the capacity of Afghan 

institutions to deliver basic services. The State Department and 

USAID are currently spending approximately $1.25 billion on such 

efforts.8 But our overreliance on international technical advisors to 

build Afghan capacity may undermine these efforts. Our aid 

projects need to focus more on sustainability so that Afghans can 

absorb our programs when donor funds recede. 

The administration is taking welcome steps to improve oversight. 

We support USAID Administrator Shah’s initiatives such as 

USAID Forward, which will incorporate more vigorous measurement and accountability tools, streamline contracting rules, and 

fund smaller, local agents of change. USAID has also established 

the Accountable Assistance for Afghanistan initiative (A3) to ensure dollars are not being diverted from their purpose by extortion 

or corruption. These and other steps, including planned improvements to USAID’s acquisition strategy and support for third party 

monitoring and evaluation, will help ensure proper use of U.S. taxpayer funds. 

We believe additional action is needed and provide recommendations throughout the report. Perhaps the single most important 

step the U.S. Government can take is to work with the Afghan 

Government and other donors to standardize Afghan salaries and 

work within Afghan Government staffing constraints. Donor practices of hiring Afghans at inflated salaries have drawn otherwise 

qualified civil servants away from the Afghan Government and created a culture of aid dependency. 

As we draw down our troops in Afghanistan, our civilians will 

have to absorb missions currently performed by the military. The 

State Department and USAID will need adequate resources to enVerDate Nov 24 2008 13:20 Jun 08, 2011 Jkt 066165 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 S:\HEARING FILES\112TH CONGRESS, 1ST\STAFF TOPIC REPORTS\AFGHANISTAN RE
4 

9 U.S. Senate. Committee on Foreign Relations. Committee Print, Majority Staff, 112th Cong., 

1st sess., ‘‘Iraq: The Transition from a Military Mission to a Civilian-led Effort,’’ January 31, 

2011, http://foreign.senate.gov/download/?id=C4ABBB7E-FFD6-4162-BB55-878EC62FE445. 

sure a smooth transition and avoid repeating the mistakes we 

made in Iraq.9 Transition planning should find the right balance 

between avoiding a sudden dropoff in aid, which could trigger a 

major economic recession, and a long-term phaseout from current 

levels of donor spending. 

There must also be unity of effort across the U.S. Government 

and international community. If we conclude that a civilian program lacks achievable goals and needs to be scaled back, no other 

actors should take over the effort. Too often, when our civilians determine that a project is infeasible, we simply transfer the program 

to other actors, such as the U.S. military or other donors. 

The theme echoed throughout this report is that our strategies 

and projects should meet the conditions of being necessary, achievable, and sustainable before funding is allocated. The report describes how these principles have been applied in practice through 

the cases of the National Solidarity Program and Basic Package of 

Health Services (Case Study A) and the ongoing effort to improve 

sub-national governance through the Performance-Based Governors 

Fund (Case Study B). 

Finally, this report offers three overarching recommendations for 

the administration to pursue a more effective assistance strategy in 

Afghanistan: 

(1) Consider authorizing a multiyear civilian assistance strategy 

for Afghanistan. The administration and Congress should consider 

working together on a multiyear authorization that includes: (a) a 

clearly defined assistance strategy; (b) the tools, instruments, and 

authorities required for a successful development approach; (c) a 

plan as to how U.S. funding will leverage and partner with Afghan 

domestic policies, with multilateral efforts—including the World 

Bank, Asian Development Bank, and Islamic Development Bank— 

and with private sector financing; (d) the civilian resources needed 

for a successful military draw down and transition; (e) the steps 

needed to ensure accountability, oversight, and effectiveness; and 

(f) metrics that measure performance and capture outcomes. The 

strategy should also establish benchmarks for the Afghan Government to fulfill its international commitments, outline goals for improving donor coordination, and include specific annual funding 

levels. This process would clarify the U.S. assistance strategy, offer 

greater predictability on future funding levels, and provide Congress with robust tools for oversight. 

(2) Reevaluate the performance of stabilization programs in conflict zones. We must challenge the assumption that our stabilization programs in their current form necessarily contribute to stability. The administration should continue to assess the impact of 

our stabilization programs in Afghanistan and reallocate funds, as 

necessary. 

(3) Focus on sustainability. We should follow a simple rule: Donors should not implement projects if Afghans cannot sustain them. 

Development in Afghanistan will only succeed if Afghans are legitimate partners and there is a path toward sustainability. The Afghan Government must have sufficient technical capability and 

5 

10Department of State, Congressional Budget Justification, Foreign Operations, Annex: Regional Perspectives, Fiscal Year 2012, pp. 604 and 864. 11On March 4, 2011, General Petraeus wrote to Senator Graham about the dangers of further 

cuts to the State Department budget. He stated that the proposed cuts will ‘‘undermine our 

plans for a conditions-based transition to Afghan lead and our long-term goal of a stable and 

peaceful Afghanistan. During this [transition] period, [the State Department] will shoulder important responsibilities for economic development and national and subnational governance capacity-building, which includes support for ministry development, rule of law, and long-term economic development and infrastructure projects. Without a fully resourced [State Department] 

role, the hard-earned progress our troopers have made could be put at risk . . . Indeed, as we 

look beyond 2014, it is clear that the State Department will shoulder the lion’s share of requirements to support our enduring commitment to Afghanistan. The funding required to build that 

capacity must start now and continue for the foreseeable future.’’ 

funding to cover operation and maintenance costs after a project is 

completed. A sustainability strategy would consolidate our programs, increase on-budget aid, streamline our rules and controls, 

and pursue a limited number of high-impact programs that do not 

require complex procurement or infrastructure. We should also 

focus on raising domestic revenue, reducing aid dependency, and 

developing partnerships with the private sector to create jobs. Success should not be measured by outputs or the amount of money 

spent, but by the ability of Afghan institutions to deliver services, 

the Afghan private sector to generate jobs and grow the economy, 

and Afghan civil society and public institutions to provide avenues 

for citizens to hold their government accountable and participate in 

political and civic life. More thought should be given to the type of 

projects we fund. Our aid should be visible among Afghans, and we 

should have a robust communications strategy in place so Afghans 

know what U.S. civilian aid in Afghanistan is accomplishing. 

WHY FOREIGN ASSISTANCE TO AFGHANISTAN MATTERS

Foreign assistance is critical to advancing U.S. policy interests 

overseas. When implemented effectively, it can play a valuable role 

in promoting security, building governance, fostering economic development, and supporting civil society. Development can help consolidate military gains and support our diplomatic efforts, which is 

why both President George W. Bush and President Obama elevated 

development to accompany defense and diplomacy in their respective national security strategies. The goal of our assistance in Afghanistan is to create the conditions for a more stable, democratic 

government capable of resisting attempts by Al Qaeda and other 

insurgent groups from returning and establishing safe havens from 

which to launch attacks on the U.S. homeland. 

The administration’s fiscal year 2012 request for Afghanistan includes roughly $3.2 billion in foreign aid.10 This funding level reflects the pivotal role the State Department and USAID are expected to play to help consolidate our military gains and ensure a 

successful transition. It gives our Embassy and USAID Mission in 

Kabul the necessary resources to build basic Afghan capacity. 

Our military leaders, including General David Petraeus, strongly 

support this request.11 It represents a roughly 22-percent decrease 

from FY 2010-enacted levels, which we believe is a responsible reduction. The cut reflects our shared desire to find the right-sized 

footprint in Afghanistan, which will provide needed civilian resources without engaging in long-term nation-building. 

6 

12 Administrator Rajiv Shah, Testimony before the Commission on Wartime Contracting in 

Iraq and Afghanistan, Washington, DC, April 1, 2011, p. 4, http://www.wartimecontracting.gov/ 

docs/hearing2011-04-01ltestimony-Shah.pdf. 13 ‘‘White Paper of the Interagency Policy Group’s Report on U.S. Policy Toward Afghanistan 

and Pakistan,’’ March 2009, pp.1–2, http://www.whitehouse.gov/assets/documents/AfghanistanPakistanlWhitelPaper.pdf. 14These figures refer to total 150 budget function assistance in FY 2009 and FY 2010. For 

more information, see: Appendix I. 15 Ambassador Karl W. Eikenberry, Testimony before the Senate Committee on Armed Services, December 8, 2009, p. 2, http://armed-services.senate.gov/statemnt/2009/December/ 

Eikenberry%2012-08-09.pdf. 16Department of State, Office of the Special Representative for Afghanistan and Pakistan, 

‘‘Afghanistan and Pakistan Regional Stabilization Plan,’’ Updated February 2010, p. 2, http:// 

www.state.gov/documents/organization/135728.pdf. 

We support the President’s FY 2012 request and recognize the 

value of foreign assistance in achieving our national security objectives. However, we believe the administration can be more effective 

in how it spends money in Afghanistan. As we begin the transition 

process to Afghan-led security and as our civilians absorb more 

tasks from the military, our civilian assistance strategy must focus 

on what is necessary, achievable, and sustainable. While the U.S. 

Government will continue to support the government and people of 

Afghanistan with foreign assistance after our troops come home, in 

the words of USAID Administrator Shah, we must provide assistance ‘‘in a way that allows our efforts to be replaced over time by 

efficient local governments, thriving civil societies and vibrant private sectors.’’ 12

PRESIDENT OBAMA’S FOREIGN ASSISTANCE

STRATEGY FOR AFGHANISTAN

In March 2009, President Obama’s initial interagency review of 

U.S. policy toward Afghanistan and Pakistan found that ‘‘a complete overhaul of our civilian assistance strategy is necessary,’’ 

which would require ‘‘a significant change in the management, resources, and focus of our foreign assistance.’’ 13

Congress appropriated approximately $2.8 billion in FY 2009 and 

$4.2 billion in FY 2010 funds for Afghanistan to increase our civilian presence in the field, build the capacity of Afghan institutions, 

and support military operations.14 According to U.S. Ambassador to 

Afghanistan Karl Eikenberry, these budget increases properly 

funded ‘‘a mission that in past years was poorly defined and 

underresourced.’’ 15 Former Special Representative for Afghanistan 

and Pakistan (SRAP) Richard Holbrooke led an interagency effort 

that resulted in a ‘‘whole-of-government’’ approach. 

Today, the focus of U.S. assistance in Afghanistan is to build the 

capacity of Afghan institutions and promote economic development 

in order to create jobs and weaken popular support for the insurgency. Secretary of State Hillary Clinton has argued that this approach is ‘‘far from an exercise in nation-building’’ because it aims 

‘‘to achieve realistic progress in critical areas’’ and is aligned with 

our security objectives.16 The goal is to transition to an Afghan 

lead for security responsibility by the end of 2014. 

To accomplish this mission, the State Department and USAID 

dramatically increased the number of civilians on the ground in Afghanistan from 531 civilians in January 2009 to about 1,300 today, 

7 

17Department of State, Office of Inspector General, ‘‘Report of Inspection,’’ Report Number 

ISP–I–10–32A, February 2010, p. 11, http://oig.state.gov/documents/organization/138084.pdf. 18 Conversation with senior Embassy Kabul officials, April 2011. 

with approximately 920 in Kabul and 380 in the field.17 The number of civilians is expected to peak at roughly 1,450 by mid-2014, 

according to Embassy officials. But overall funding levels peaked in 

2010. This means that the Embassy will have more civilians in the 

field with fewer resources in 2014, just as the security transition 

is in full swing. 

Safely maintaining civilians in Afghanistan is costly. According 

to senior Embassy officials, each U.S. civilian costs about half a 

million dollars. This figure covers training, salaries, and travel expenses but excludes security costs covered by the military, which 

civilians will have to absorb as we begin drawing down troops. It 

also excludes the cost of emergency protection details (EPD) that 

transport our civilians in theatre. An EPD for an Ambassador in 

Kabul, for instance, can cost approximately $8 million a year.18

In light of funding constraints, the State Department and USAID 

may want to consider a smaller civilian footprint—a ‘‘civilian 

ebb’’—that gives priority to the key aspects of the civilian mission 

that are necessary, achievable, and sustainable. 

President Obama’s review of our assistance strategies in the region resulted in a profound change in the coordination of U.S. foreign assistance to Afghanistan and Pakistan. Traditionally, USAID 

leads our foreign assistance efforts with policy guidance from the 

State Department. Under the President’s new strategy, SRAP 

housed at the State Department in Washington, DC, is charged 

with overseeing all civilian operations. The Embassies in Kabul 

and Islamabad have followed suit by establishing new Assistance 

Coordinator positions staffed by senior Foreign Service officers to 

oversee the aid. 

The migration of foreign assistance responsibilities from USAID 

to the State Department was intended to increase coordination 

among government agencies, reduce stove-piping, and ensure that 

development supports U.S. foreign policy. 

This ‘‘whole-of-government’’ approach has succeeded to some degree. For instance, Embassy Kabul’s Coordinating Director for Development and Economic Affairs (CDDEA), led by an Ambassadorlevel coordinator, supervises the work of 14 sections and agencies 

at the U.S. mission, including USAID, the U.S. Department of Agriculture, the Treasury attache ́, the Federal Aviation Administration, and the Department of Transportation. Similarly, the Embassy’s Rule of Law Directorate, a civilian-military effort led by an 

Ambassador-level coordinator supported by senior military officers, 

coordinates and supervises agencies working on rule of law and law 

enforcement programs. These include USAID, the State Department’s International Narcotics and Law Enforcement (INL) Bureau, the Department of Justice, the Drug Enforcement Administration, the Federal Bureau of Investigation, the U.S. Marshals 

Service, and the Department of Homeland Security. Both these 

functions have served the U.S. Ambassador and Embassy Kabul in 

their efforts to coordinate our development and assistance programs. 

8 

19 Response to Questions for the Record submitted to Secretary of State Hillary Rodham Clinton by Chairman John Kerry, March 2, 2011, Nos. 21 and 22. Note that we include the ‘‘southwest’’ in our calculations for USAID resource allocations in Afghanistan’s ‘‘south and east.’’ For 

more information, see: Appendixes II and III. According to USAID’s Rajiv Shah, ‘‘roughly 65– 

70 percent of all our resources are being spent in those [south, southwest, and east] areas.’’ 

Shah’s comments are reproduced in Appendix VII. 20See Appendixes II and III. 

However, this new approach has also added multiple Ambassador-level officials at the Embassy in addition to the SRAP, created new layers of bureaucracy, diminished USAID’s voice at the 

table, and put decisionmaking on development issues in the hands 

of diplomats instead of development experts. 

USING DEVELOPMENT DOLLARS TO SUPPORT COIN 

The U.S. counterinsurgency strategy (COIN) in Afghanistan calls 

on the military to secure key areas—‘‘clear’’ and ‘‘hold,’’ while 

USAID and its counterparts follow up with the ‘‘build’’ and ‘‘transfer’’ phases. The goal is to provide security, strengthen local government institutions, and build critical infrastructure, such as 

roads, schools, and clinics. In theory, these steps can improve lives 

and weaken popular support for the insurgency. 

This past year saw a marked shift in resources from Kabul to the 

regional, provincial, and district levels in nearly all of the 34 provinces, particularly in the south and east where the U.S. military 

surge is concentrated. The shift responded to the need for increased 

civil-military cooperation at the provincial and district levels to 

hold territory cleared by military operations. Roughly 77 percent—or about $1.65 billion—of USAID’s total FY 

2009–10 resources are being spent in Afghanistan’s south and east. 

In FY 2011, according to USAID projections, roughly 81 percent— 

or about $872 million—will go to these regions.19 Most of the funds 

in Afghanistan’s south and east are being used for short-term stabilization programs instead of longer term development projects. 

Given these levels and the trend lines indicating increased funding 

for the south and east as a percentage of total FY 2011 funds, our 

stabilization strategy deserves closer scrutiny.20

Stabilization projects are designed to respond to urgent humanitarian and reconstruction requirements in areas of instability. 

Practitioners in the field argue that stabilization is not development and that stabilization projects, if pursued over an extended 

period, can have negative consequences. Working closely with provincial reconstruction teams (PRTs) and district support teams 

(DSTs), USAID plans to shift from stabilization to transitional development as security improves. 

This section examines the theory guiding our stabilization efforts 

and our agricultural investments. It also considers the consequences of our stabilization strategy on the local population. 

COIN THEORY AND STABILIZATION

Our stabilization strategy assumes that short-term aid promotes 

stability in counterinsurgency (COIN) operations and ‘‘wins hearts 

and minds’’ by improving security, enhancing the legitimacy and 

reach of the central government, and drawing support away from 

the Taliban. It presumes that the international community and the 

9 

21 ‘‘Winning Hearts and Minds in Afghanistan: Assessing the Effectiveness of Development 

Aid in COIN Operations,’’ Report on Wilton Park Conference 1022, March 2010, p. 1, http:// 

usacac.army.mil/cac2/coin/repository/ 

Assesing_Effectiveness_of_Development_Aid_in_COIN_%281_Apr_10%29.pdf. 22 Ibid. 23Stuart Gordon, ‘‘Winning Hearts and Minds: Examining the Relationship Between Aid and 

Security in Afghanistan’s Helmand Province,’’ Feinstein International Center, Tufts University, 

April 2011, https://wikis.uit.tufts.edu/confluence/pages/viewpage.action?pageId=44797077. 24 Ibid. 25 Ibid., p. 6. 26 Administrator Rajiv Shah, ‘‘Insights,’’ USAID Frontlines, December 2010/January2011, 

http://www.usaid.gov/press/frontlines/fl_jan11/FL_jan11_insights.html. 27 ‘‘The World Bank in Afghanistan,’’ International Development Association Results, May 

2011. 28 ‘‘Dampening Processes of Radicalization at the Individual and Societal Level,’’ Development 

to Counter Insurgency, USAID Evidence Summit, 2010, pp. 5–6. 

Afghan Government have shared objectives when it comes to promoting longer term development, good governance, and the rule of 

law.21

These assumptions may not be correct. In March 2010, a conference at Wilton Park in the United Kingdom brought together 

leading experts on the role of development in counterinsurgency. 

The conference report found ‘‘a surprisingly weak evidence base for 

the effectiveness of aid in promoting stabilization and security objectives’’ in Afghanistan.22

The key is to understand the root causes of insecurity, which 

may differ in each province and district. Take the case of the 

United Kingdom’s stabilization program in Helmand province between 2006 and 2008. According to a recent Tufts University study, 

the stabilization model adopted by the British during this period 

assumed that poverty and a limited government presence were 

fueling the negative perceptions of governmental authorities and 

international development projects.23 Field research, however, suggests that local residents in Helmand are more concerned about the 

lack of security and poor governance.24 Taliban intimidation and 

rampant insecurity beyond the main towns of Lashkar Gah and 

Gereshk have deterred the population from cooperating with the 

government. Poor governance has exacerbated these trends, allowing the Taliban to exploit the grievances of politically marginalized 

groups.25

Administrator Shah agrees that ‘‘we must strive to uncover the 

true drivers of instability in a region, based . . . on local perspectives . . . What we’ve found is that it is generally not the case that 

a lack of schools or roads drives conflict. Often the situation is far 

subtler, having to do with local power dynamics or long-held 

grudges.’’ 26 Our aid strategy cannot assume that poverty or unemployment alone fuel the insurgency. For example, according to the 

World Bank, poverty rates in the insurgency-plagued Helmand and 

Kandahar provinces are less than 30 percent. By contrast, in the 

more peaceful central and northern provinces, poverty rates run 

from between 42 and 58 percent in Bamyan and Ghor to upward 

of 58 percent in Balk province.27

In a recent study of the drivers of political violence, USAID 

found limited evidence linking poverty and low education to support for radical groups.28 Development aid can have violence-reducing effects when used to help local governments deliver basic servVerDate Nov 24 2008 13:20 Jun 08, 2011 Jkt 066165 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 S:\HEARING FILES\112TH CONGRESS, 1ST\STAFF TOPIC REPORTS\AFGHANISTAN RE
10 

29 ‘‘Disrupting the Formation of Groups Willing to Employ Terror and Other Political Violence 

to Achieve their Aims,’’ Development to Counter Insurgency, USAID Evidence Summit, 2010. 30For a review of the literature on development and counterinsurgency, see Annex. 31Mark Moyar, ‘‘Development in Afghanistan’s Counterinsurgency: A New Guide,’’ Orbis Operations, March 2011, p. 5, http://smallwarsjournal.com/documents/development-in-afghanistancoin-moyar.pdf. 32 ‘‘Disrupting the Formation of Groups Willing to Employ Terror and Other Political Violence 

to Achieve their Aims,’’ Development to Counter Insurgency, USAID Evidence Summit, pp. 7– 

8. 33Department of State, Office of the Special Representative of Afghanistan and Pakistan, ‘‘Afghanistan and Pakistan Regional Stabilization Strategy,’’ Updated February 2010, p. 5, http:// 

www.state.gov/documents/organization/135728.pdf. 

ices, but achieving this in Afghanistan remains challenging.29 Providing legitimate employment opportunities may be part of the solution, but the literature is inconclusive.30

Security and governance matter. Development spending can 

strengthen the government and weaken insurgents in areas that 

are secure and enjoy good governance. It can also have the opposite 

effect when security and governance are poor or absent. As historian Mark Moyar observes: 

. . . the United States spent more than $100 million repairing and upgrading the Kajaki hydropower plant to provide electricity to Helmand and Kandahar provinces, but 

last year half of its electricity went into areas where the 

insurgents control the electric grid, enabling the Taliban to 

issue electric bills to consumers and send out collection 

agents with medieval instruments of torture to ensure 

prompt payment. The consumers in these places use the 

power for the irrigation of fields that grow poppies, which 

in turn fuel the opium trade from which the Taliban derive 

much of their funding.31

Aid carries risks and demands a sophisticated understanding of 

the local context, patterns of insurgent recruitment, and organizational structure of violent groups. Otherwise, our resources can inadvertently raise local tensions, cause infighting among local 

groups, and exacerbate rent-seeking behavior among corrupt actors.32

Given the conflicting research on the effects of aid in promoting 

stability, more analysis is needed before we continue investing a 

significant amount of our aid in conflict zones. 

AGRICULTURE AND THE CHALLENGES OF STABILIZATION

As we continue our assistance efforts in insecure parts of Afghanistan, we need to consider whether our aid will have a net positive 

effect. This is especially true in the area of agriculture, which 

forms the backbone of our strategy in the south. 

The administration’s ‘‘top reconstruction priority is implementing 

a civilian-military agriculture development strategy to restore Afghanistan’s once vibrant agriculture sector with support from 

USAID, the U.S. Department of Agriculture, and the Army National Guard Agri-business Development Teams.’’ 33 Given that approximately 80 percent of Afghans rely on agriculture for their livelihoods, the focus is on immediate job creation, particularly in the 

insurgency-plagued provinces of Helmand and Kandahar. Projects 

include cash-for-work programs and longer term agribusiness and 

11 

34 U.S. Senate. Committee on Foreign Relations, Committee Print, Majority Staff, 112th Cong., 

1st sess., ‘‘Avoiding Water Wars: Water Security and Central Asia’s Growing Importance for Stability in Afghanistan and Pakistan,’’ February 22, 2011, http://foreign.senate.gov/download/ 

?id=738A9FCF-FA1B-4ECD-9814-A1F6C5BE04D2. 35 United States Government Accountability Office, ‘‘Afghanistan Development: Enhancements 

to Performance Management and Evaluation Efforts Could Improve USAID’s Agricultural Programs,’’ GAO–10–368, July 2010, Highlights page, http://www.gao.gov/new.items/d10368.pdf. 36 Ibid. 37 Rajiv Chandrasekaran, ‘‘In Afghan region, the U.S. Spreads the Cash To Fight the Taliban,’’ 

Washington Post, May 31, 2010, http://www.washingtonpost.com/wp-dyn/content/article/2010/05/ 

30/AR2010053003722.html?nav=emailpage. Additionally, senior Embassy Kabul officials estimate that our military and civilian aid combined represents about four times the per capita 

gross domestic product. Conversation with senior Embassy Kabul officials, May 2011. 38 Elizabeth Creel, International Relief & Development, e-mail message to Senate Foreign Relations Committee Majority Staff, March 30, 2011. 

irrigation initiatives to increase linkages between farmers and 

markets and enhance water management.34

Since 2002, USAID has awarded about $1.4 billion for agricultural programs. In a July 2010 report, however, the Government 

Accountability Office (GAO) found that USAID’s agricultural programs ‘‘did not always establish or achieve their targets for each 

performance indicator.’’ 35 Six of the eight programs that the GAO 

assessed failed to meet their annual targets and the three longest 

running programs declined in performance from 2006 to 2008.36

According to an article in the Washington Post last spring, 

USAID spent about $250 million over one year on agricultural programs in Helmand and Kandahar alone. In the district of Nawa in 

Helmand province, which has a population of about 75,000, USAID 

spent an estimated $400 per person. By contrast, the country’s per 

capita income is about $300 a year.37

The primary agricultural program is the Agricultural Vouchers 

for Increased Production in Afghanistan (AVIPA) Plus project, 

which was designed as a $60 million national development program 

and then expanded to a $360 million stabilization program, primarily in Helmand and Kandahar, with a significant cash-for-work 

component. As security improved last summer and fall, AVIPA 

Plus expanded into new districts and an additional $89 million was 

added to the project at the request of the Agriculture Ministry to 

expand its seed/fertilizer voucher program to 32 provinces. 

According to International Relief & Development, the implementing partner for AVIPA Plus, the project has resulted in 780 

cash-for-work projects, employing 103,000 laborers and injecting 

nearly $27 million in wages into the economy—the equivalent of 

creating 22,500 full-time jobs.38

However, NGO representatives who have worked in the area for 

many years argue that such statistics conflate day laborers with 

full-time employment and distort labor markets. More importantly, 

these programs can generate unintended and potentially adverse 

consequences. As Rajiv Chandrasekaran reported in the Washington Post, the cash surge in Nawa 

is sparking new tension and rivalries within the community, and it is prompting concern that the nearly free seeds 

and gushing canals will result in more crops than farmers 

will be able to sell. It is also raising public expectations for 

12 

39 Ibid. 40 Conversation with senior Embassy officials, May 2011. 41Meeting with Dr. David Kilcullen, President and Chief Executive Officer, Caerus Associates, 

March 21, 2011. 42On the ‘‘income’’ and ‘‘substitution’’ effects of economic and social development programs in 

counterinsurgency, see: Dr. Charles Wolf, Jr., ‘‘Insurgency and Counterinsurgency: New Myths 

and Old Realities,’’ RAND Corporation, p. 7, http://www.rand.org/content/dam/rand/pubs/papers/ 

2005/P3132-1.pdf. 

handouts that the Afghan Government will not be able to 

sustain once U.S. contributions ebb.39

In 2011, USAID plans to scale back AVIPA Plus as it implements 

longer term development programs under the Southern Region Agricultural Development Program (SRADP). But linkages between 

stabilization and development projects are not seamless. In agriculture, for instance, plans to construct cold storage facilities and 

build farm-to-market transportation networks may not be completed in time to sell additional crops and convince farmers not to 

return to opium farming. Moreover, scaling back may mean that 

many who benefited from artificially inflated incomes, temporary 

work, and subsidized seed will lose their benefits. We should use 

this opportunity to measure the real impact of our agriculture programs on security and design future programs accordingly. 

CONSEQUENCES OF STABILIZATION ON LOCAL COMMUNITIES

U.S. stabilization projects have raised expectations and changed 

incentive structures in Afghanistan, according to development experts in the field. ‘‘There is no question that our foreign aid is distorting the economy,’’ according to Embassy Kabul.40 In some 

cases, we have been paying Afghans to clean ditches and repair irrigation canals, tasks that they have been doing for free for generations. Community leaders have at times risked the ire of the 

Taliban to side with the U.S. and Afghan Governments in supporting short-term aid projects on the understanding that we would 

not abandon them. 

To be sure, stabilization projects may yield short-term results, 

such as developing relationships with community elders that can 

provide useful intelligence. But these successes do not necessarily 

translate into the desired strategic outcome of winning over the 

local population. Too much aid can have a destabilizing effect on 

local communities that are unable to absorb the cash surge. 

Drawing on the work of economist Dr. Charles Wolf, counterinsurgency expert Dr. David Kilcullen sees two different trends 

taking place when we pour large amounts of cash into restive 

areas.41 On the one hand, there is a ‘‘substitution effect,’’ whereby 

development dollars shift popular support away from the insurgents and toward the government. But our aid can also have an 

‘‘income effect,’’ whereby development programs increase the resources available to villagers and lead them to believe that they 

can improve their prospects of survival by entering into negotiations with the insurgents.42 Many factors can influence the outcome, and we must do a better job of understanding them when we 

design our aid programs. 

Snapshots from the field suggest we may not be winning over the 

local population through our current aid practices: 

13 

43 ‘‘Winning Hearts and Minds in Afghanistan: Assessing the Effectiveness of Development 

Aid in COIN Operations,’’ Report on Wilton Park Conference 1022, March 2010, p. 3, http:// 

usacac.army.mil/cac2/coin/repository/ 

AssesinglEffectivenessloflDevelopmentlAidlinlCOINl%281lAprl10%29.pdf. 44 ‘‘Afghanistan Transition: The Death of Bin Laden and Local Dynamics,’’ The International 

Council on Security and Development, May 2011, p. 6, http://www.icosgroup.net/static/reports/ 

bin-laden-local-dynamics.pdf. 45 According to a former development specialist at USAID’s Mission in Kabul, the staff turnover rate in Afghanistan is more than 85 percent a year. Rajiv Chandrasekaran, ‘‘U.S. Military 

Dismayed by Delays in 3 Key Development Projects in Afghanistan,’’ Washington Post, April 28, 

2011, http://www.washingtonpost.com/world/us-military-dismayed-by-delays-in-3-key-development-projects-in-afghanistan/2011/04/22/AFD6jq8Elstory.html. 46 According to James Kunder, former USAID acting deputy administrator, ‘‘it’s time to focus 

on the underlying reason our fighting forces feel inadequately supported: There are a thousand 

Defense Department personnel for every one USAID employee around the world. Administrations and Congresses controlled by both parties allow this preposterous imbalance in capability 

to continue. This particular Congress has gone one better, deeply cutting USAID and State Department funding despite warnings from Defense Secretary Robert M. Gates and uniformed 

Continued 

Despite the considerable work that has been done, including the expansion of basic social services, major investments in roads and other infrastructure, and a communications revolution, negative perceptions persist that little 

has been done, the wrong things have been done, what 

was done is poor quality, the benefits of aid are spreading 

inequitably, and that much money is lost through corruption and waste. Research findings suggest policymakers 

should be cautious in assuming that aid projects help create positive perceptions of the deliverers of aid, or that 

they can help legitimize the government.43

New survey research in Afghanistan lends credence to these findings. According to the International Council on Security and Development’s May 2011 report: 

The U.S. troop surge has brought unquestionable military success, with many Afghans . . . now believing that 

international and Afghan forces are winning the fight 

against the Taliban. However, these military successes 

have also created ‘‘Blowback,’’ which is negatively impacting Afghan hearts and minds in the south . . . The negative impacts of the military operations . . . and the general backdrop of news in the south, give the Taliban an opportunity to ‘‘Pushback’’ and gain ground by capitalizing 

on the increasing resentment of the foreign presence within the local population, which is emotionally volatile, traumatized, isolated, and easily manipulated by outside actors.44

We need more analysis of the effects—positive and negative—of 

our aid on the local population. We are pursuing a strategy based 

on counterinsurgency theories that deserve careful, ongoing scrutiny to see if they yield the intended results. 

THE CHALLENGES OF SPENDING U.S. AID DOLLARS

Spending aid effectively in Afghanistan is extremely challenging, 

given the security climate, abject poverty, weak indigenous capacity, widespread corruption, and poor governance. High staff turnover,45 pressure from the military, imbalances between military 

and civilian resources,46 unpredictable funding levels from ConVerDate Nov 24 2008 13:20 Jun 08, 2011 Jkt 066165 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 S:\HEARING FILES\112TH CONGRESS, 1ST\STAFF TOPIC REPORTS\AFGHANISTAN RE
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commanders that inadequate civilian capacity means more American soldiers deployed and, regrettably, more dead and wounded.’’ James Kunder, ‘‘Afghan Aid Efforts Are Crucial to the War 

Effort,’’ Letter to the Editor, Washington Post, May 3, 2011, http://www.washingtonpost.com/ 

opinions/afghan-aid-programs-are-crucial-to-the-war-effort/2011/05/01/AFFhLZjFlstory.html. 

gress, and changing political timelines have further complicated efforts. Pressure to achieve rapid results puts our civilians are under 

enormous strain to spend money quickly. 

Afghanistan is not Iraq, which had a functioning state and robust government and civil society institutions. After the fall of the 

Taliban, we were faced with the challenge of building a democraticstyle government and modern economy. The U.S. effort began in 

earnest in 2009, when the administration and Congress recognized 

the need for properly resourcing the civilian effort. 

Ongoing development aid will be needed for the foreseeable future to help Afghanistan become stable. This section examines how 

we can improve our assistance strategy. As discussed below, we 

must overcome the challenges that have undermined our efforts, 

including unrealistic timelines, lack of robust oversight, off-budget 

financing, capacity-building programs that rely heavily on technical 

advisors, and issues of Afghan ownership and fiscal sustainability. 

POLITICAL VERSUS DEVELOPMENT TIMELINES

Development, when done properly, takes time and results cannot 

be measured immediately. In a country like Afghanistan, development will take generations. The U.S. Government has strived for 

quick results to demonstrate to Afghans and Americans alike that 

we are making progress. Indeed, the constant demand for immediate results prevented the implementation of programs that could 

have met long-term goals and would now be bearing fruit. 

As recently as last summer, Embassy Kabul believed it had a 3- 

to 5-year window to accomplish its development goals. However, 

the political tide in the United States has been turning, with increased pressure to bring our troops home and draw down our military and civilian budgets in Afghanistan. Increasingly, the U.S. civilian strategy is linked to the shorter term military strategy on 

the ground. Resources are only appropriated from Congress on an 

annual cycle, which complicates efforts to undertake longer term civilian commitments. 

Discussions are underway on a strategic agreement with Afghanistan that will frame the contours of our relationship following the 

withdrawal of U.S. troops. We expect there will be a longer term 

commitment of U.S. civilian resources for the people of Afghanistan. But the scope of this commitment is still under negotiation. 

Given the emphasis on annual budget cycles in Washington and 

the lack of a multiyear authorization for Afghanistan that could 

provide a roadmap for future funding, the administration is again 

under pressure to demonstrate quick results to Congress. Many in 

Congress are fixated on ‘‘burn rates,’’ or how fast the money is 

spent and how much money is left in the ‘‘pipeline.’’ This results 

in undue emphasis at USAID and the State Department on getting 

money out the door to ensure future appropriations at significant 

levels. Political pressures create perverse incentives to spend 

money even when the conditions are not right. 

15 

47 U.S. Senate. Committee on Foreign Relations. Committee Print, Majority Staff, 112th Cong., 

1st sess., Iraq: The Transition from a Military Mission to a Civilian-led Effort, January 31, 2011, 

http://foreign.senate.gov/download/?id=C4ABBB7E-FFD6-4162-BB55-878EC62FE445. 48Special Inspector General for Afghanistan Reconstruction, Quarterly Report to the United 

States Congress, October 30, 2010, pp. 4 and 21, http://www.sigar.mil/pdf/quarterlyreports/ 

Oct2010/Lores/SIGAR4Ql2010Book.pdf. See also: Special Inspector General for Afghanistan Re- construction, ‘‘DOD, State, and USAID Obligated Over $17.7 Billion to About 7,000 Contractors 

and Other Entities for Afghanistan Reconstruction During Fiscal Years 2007–2009,’’ Audit 11– 

4 Contract Performance and Oversight, October 27, 2010, pp. 9–17, http://www.sigar.mil/pdf/audits/SIGAR%20Audit-11-4.pdf. 49 Ibid. 50David Voreacos, ‘‘Berger Group Pays $69.3 Million for Iraq Overbilling,’’ Bloomberg 

Businessweek, May 5, 2011, http://www.businessweek.com/news/2010-11-05/berger-group-pays69-3-million-for-iraq-overbilling.html. 

Cutting back our foreign aid budgets is not the most prudent solution. As we learned in Iraq, there will be tremendous pressure on 

our civilians to absorb missions currently performed by the military 

as our troops begin to draw down.47 The State Department and 

USAID must have the resources they need to ensure a smooth 

transition. 

Our goal should be to reduce some of the political pressure to 

spend money quickly, especially when the conditions are not right. 

Some ideas under discussion include a multiyear authorization bill 

or creating a trust fund that could disperse funds as needed and 

appropriate. We welcome further discussions with the administration on these and other options. 

LIMITED CONTRACTOR OVERSIGHT

The U.S. Government relies heavily on contractors and subcontractors in Afghanistan for aid projects. Contractors support direct-hire personnel, implement assistance projects, and address 

U.S. Government workforce shortfalls. 

From FY 2007 to FY 2009, USAID obligated about $3.8 billion 

to 283 contractors and other entities, including more than $2 billion (53 percent) to 214 contractors, $1.1 billion (nearly 30 percent) 

to 53 cooperative agreement partners, and $625 million (17 percent) for 17 grants. Two contractors—Louis Berger International 

and Development Alternatives Inc.—accounted for about $1 billion, 

or more than half the total of USAID’s contracts.48

During this same time period, the State Department’s Bureau of 

International Narcotics and Law Enforcement (INL) obligated 

about $2.3 billion to four contractors, with DynCorp International 

accounting for more than 80 percent of INL’s total obligations.49

Contractors run the gamut from companies who implement 

USAID programs to individual experts who serve as technical advisors within Afghan institutions and ministries, as Deloitte representatives did at the Afghan Central Bank. 

While there are many good reasons to use contractors in Afghanistan, there are also reasons for concern. The case of the Louis 

Berger Group Inc. (LBG) is instructive. A New Jersey-based engineering consulting firm that accounted for over a third of USAID’s 

total contract obligations in Afghanistan between FY 2007 and FY 

2009, LBG recently admitted to submitting ‘‘false, fictitious, and 

fraudulent overhead rates for indirect costs . . . [resulting] in overpayments by the [U.S.] government in excess of $10 million’’ from 

1999 to 2007.50 Such instances of fraud undermine our reconstrucVerDate Nov 24 2008 13:20 Jun 08, 2011 Jkt 066165 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 S:\HEARING FILES\112TH CONGRESS, 1ST\STAFF TOPIC REPORTS\AFGHANISTAN RE
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51 Jacquelyn Williams-Bridgers, United States Government Accountability Office, ‘‘Key Issues 

for Congressional Oversight,’’ Testimony before the Subcommittee on State, Foreign Operations, 

and Related Programs, Committee on Appropriations, House of Representatives, March 3, 2011, 

Highlights page, http://www.gao.gov/new.items/d11419t.pdf. 52Special Inspector General for Afghanistan Reconstruction, Quarterly Report to the United 

States Congress, October 30, 2010, p. vi, http://www.sigar.mil/pdf/quarterlyreports/Oct2010/ 

Lores/SIGAR4Ql2010Book.pdf. 53 Commission on Wartime Contracting in Iraq and Afghanistan, ‘‘At What Risk: Correcting 

Overreliance on Contractors in Contingency Operations,’’ Second Interim Report to Congress, 

February 24, 2011, p. 7, http://www.wartimecontracting.gov/docs/CWClInterimReport2- 

lowres.pdf. 54Kate Beale, USAID, e-mail message to Senate Foreign Relations Committee Majority Staff, 

April 21, 2011. 

tion efforts in Afghanistan and highlight the need for vigorous 

oversight of our war-zone contracts. 

In addition to the risk of contractor fraud, the use of large numbers of contractors raises other significant opportunities for waste 

and mismanagement. By contracting with U.S. and international 

contractors at western prices (the ‘‘primes’’), donor funds can be 

lost to corruption through multiple subcontractors over which the 

U.S. Government has little to no control (the ‘‘subs’’). Projects may 

be built at costs substantially less than the amount originally paid, 

using substandard materials and methods. Poor security conditions 

and a lack of contracting officers overseeing contactor performance 

could deter site visits to confirm whether the project was properly 

built, or even built at all. Afghanistan is littered with abandoned 

or half-built structures. 

Multiple reports have raised concerns about the lack of robust 

contractor oversight. The GAO finds ‘‘oversight inadequate at 

times, thus raising questions about the agencies’ ability to ensure 

accountability for multibillion dollar investments.’’ 51 The Special 

Inspector General for Afghanistan Reconstruction (SIGAR) warns 

that ‘‘the large U.S. investment in Afghanistan remains at significant risk of being wasted or subject to fraud and abuse.’’ 52 The bipartisan Congressional Commission on Wartime Contracting in 

Iraq and Afghanistan is particularly critical of overall U.S. Government assistance, noting that ‘‘tens of billions of taxpayers’ dollars 

have failed to achieve their intended use in Iraq and Afghanistan.’’ 53

Part of the problem is a lack of qualified contracting officers, contracting officer’s representatives, and acquisition staff. Currently, 

USAID has approximately 85 Foreign Service contracting officers 

serving worldwide with three or more years of experience. Ten are 

serving in Afghanistan and USAID plans to increase this number 

to 18, which is an improvement from 2007 when there were only 

three contracting officers in Afghanistan.54 However, this increase 

will not likely be sufficient to provide adequate oversight of contractor performance in Afghanistan. According to Maureen 

Shauket, USAID’s Director of the Office of Acquisition and Assistance, in order to meet the U.S. Government’s civilian average ratio 

of number of dollars per contracting officer, USAID would have to 

send nearly its entire overseas workforce to work only in Afghanistan. 

Compounding the problem is the difficulty of getting contract 

staff with the right technical backgrounds to serve in places like 

Afghanistan. Congress needs to create incentives and find addiVerDate Nov 24 2008 13:20 Jun 08, 2011 Jkt 066165 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 S:\HEARING FILES\112TH CONGRESS, 1ST\STAFF TOPIC REPORTS\AFGHANISTAN RE
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55Tim Cox, ‘‘Review of USAID/Afghanistan’s Bank Supervision Assistance Activities and the 

Kabul Bank Crisis,’’ Report No. F–306–11–003–S, USAID Office of Inspector General, March 16, 

2011. 56Department of State, Office of Inspector General, ‘‘Audit of USAID/Afghanistan’s Building 

Education Support Systems for Teachers Project,’’ Audit Report No. 5–306–10–006–P, January 

29, 2010, p. 9, http://www.usaid.gov/oig/public/fy10rpts/5-306-10-006-p.pdf. 57 Ibid. 

tional funding for USAID to build a corps of contract officers willing to serve in war zones. 

The Kabul Bank incident underscores the importance of such a 

move. In 2010, massive fraud was uncovered at Kabul Bank, including loans totaling $900 million to shareholders at the Bank, 

which is nearly 5 percent of Afghanistan’s current Gross Domestic 

Product (GDP). Fraud of this scale resulted from failures at every 

level, including internal bank control; Kabul Bank’s auditors—A.F. 

Ferguson & Co., a Pakistani affiliate of PricewaterhouseCoopers; 

Afghanistan’s Central Bank; the Central Bank’s advisors, Deloitte, 

under a USAID contract; the political establishment; and USAID. 

At the time, USAID had only one contracting officer’s technical representative overseeing the $92 million contract with Deloitte to 

provide technical assistance to the Central Bank. An investigation 

undertaken by the USAID Office of Inspector General determined 

that Deloitte knew or should have known that there were serious 

problems at Kabul Bank and failed to alert USAID officials in 

Kabul.55

The failures do not end with Deloitte or USAID’s lack of adequate oversight. Independent of its relationship with Deloitte, 

USAID should have known or suspected that there were serious 

problems at Kabul Bank. Within Afghanistan, the fraud at Kabul 

Bank has been described as an open secret, known and discussed 

by market participants. And yet, it appears that no one at USAID 

had the technical knowledge or private sector relationships to see 

what many others in the sector saw. 

According to a former USAID Kabul Mission Director: 

Because of the ill planned downsizing of USAID’s technical staff over the past years and the difficulty in finding 

senior technical Foreign Service officers to serve in Afghanistan, the management of the Kabul Bank Deloitte 

contract was relegated to a junior officer. While he worked 

to the best of his ability, this important project demanded 

strong technical oversight and similar programs of this 

level of strategic importance will demand senior management expertise and a different system with USAID to ensure the availability of senior technical staff. 

In another case involving an education project for teachers, 

USAID’s contracting officer was unaware and did not consent to 

the award of subcontracts and did not approve of significant subcontract modifications totaling $23.4 million out of a $94 million 

contract.56 These modifications included changes in the duration of 

subcontracts and terms of subcontractor performance, as well as 

significant funding increases.57

With respect to international narcotics and law enforcement pro- grams, INL manages approximately $927 million in contract services in Afghanistan. Yet it has only one Contracting Officer RepVerDate Nov 24 2008 13:20 Jun 08, 2011 Jkt 066165 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 S:\HEARING FILES\112TH CONGRESS, 1ST\STAFF TOPIC REPORTS\AFGHANISTAN RE
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58Of the seven I–CORs, four are located in Kabul, one in Kunduz, one in Jalalabad, and one 

in Kandahar. Christine Leming, Department of State, e-mail message to Senate Foreign Relations Committee Majority Staff, May 3, 2011. 59 Administrator Rajiv Shah, Testimony before the Commission on Wartime Contracting in 

Iraq and Afghanistan, Washington, DC, April 2, 2011, http://www.wartimecontracting.gov/docs/ 

hearing2011-04-01ltestimony-Shah.pdf. 60 Commission on Wartime Contracting in Iraq and Afghanistan, ‘‘At What Risk: Correcting 

Over-Reliance on Contractors in Contingency Operations,’’ Second Interim Report to Congress, 

February 24, 2011, http://www.wartimecontracting.gov/docs/CWClInterimReport2-lowres.pdf. 

resentative (COR) in Washington overseeing five Civilian Police 

(CivPol) Program task orders amounting to $800 million and seven 

In-country Contract Representatives (I–CORs) providing on-theground administrative contract support.58

The administration is taking welcome steps to improve oversight. 

We support initiatives such as USAID Forward, which will incorporate more vigorous measurement and accountability tools, 

streamline contracting rules, and fund smaller, local agents of 

change.59 USAID has also established the Accountable Assistance 

for Afghanistan initiative (A3) to ensure dollars are not being diverted from their purpose by extortion or corruption. These and 

other steps, including planned improvements to USAID’s acquisition strategy and support for third party monitoring and evaluation, will help ensure proper use of U.S. taxpayer funds. 

Embassy Kabul is working closely with Task Force 2010 and 

Combined Joint Interagency Task Force (CJIATF)-Shafafiyat 

(‘‘Transparency’’) to improve the quality of contractors and to prevent contracts with Afghan contractors who are corrupt or have 

ties to the insurgency. The United States is also working with the 

Afghan Government to change the way security is provided to our 

contractors. The military has ordered changes in the way goods and 

services are procured. SIGAR and the USAID Inspector General 

are investigating allegations of corruption relating to U.S. funds 

and have successfully prosecuted cases involving U.S. citizens. 

More can still be done to reduce our reliance on contractors and 

ensure proper oversight of prime and subcontractors. For instance, 

as discussed below, more U.S. funding could be channeled to national Afghan programs and Afghan civil society organizations instead of large, international contractors. The State Department and 

USAID should take immediate steps to ensure sufficient staffing 

levels and relevant professional expertise of contracting officers before contracts are awarded, including steps to recruit and train people with the proper financial oversight backgrounds. Recommendations put forth by the bipartisan Congressional Commission on 

Wartime Contracting in Iraq and Afghanistan should also be implemented.60

ON-BUDGET VERSUS OFF-BUDGET FUNDING

Most international donors, including the United States, channel 

much of their aid ‘‘off-budget,’’ meaning it does not go through the 

Afghan Government. Off-budget funding is appealing because it 

provides more financial and programmatic control to the donor, 

which is important in an environment where there are significant 

concerns about weak government capacity and corruption. 

However, off-budget funding has significant downsides. It can 

weaken the ability of the Afghan state to control resources, which 

19 

61 Josh Boak, ‘‘U.S.-funded infrastructure deteriorates once under Afghan Control, report 

says,’’ Washington Post, January 4, 2011, http://www.washingtonpost.com/wp-dyn/content/article/2011/01/03/AR2011010302175.html?hpid=topnews. 62See Appendix VII. 63 Response to Questions for the Record submitted to Secretary of State Hillary Rodham Clinton by Chairman John Kerry, March 2, 2011, Nos. 13 and 14. According to USAID, ‘‘we currently spend approximately 38 percent of our funds on-budget.’’ For more information, see: Appendix VII. 64Tim Cox, ‘‘Review of USAID/Afghanistan’s Ministerial Assessment Process,’’ Review Report 

No. F–306–11–001–S, November 6, 2010, p. 2, http://www.usaid.gov/oig/public/fy11rpts/f-306-11- 

001-s.pdf. 65The ARTF is comprised of two ‘‘windows’’: 1) a recurrent window that covers the costs of 

the government for operations, maintenance, and salaries for teachers, health workers, and civilian staff in the ministries and provinces, and 2) an investment window that supports government capacity-building projects and technical assistance. 

results in donor duplication, and can fuel corruption. It has also led 

to the creation of thousands of donor-driven projects without any 

plan for sustaining them, including 16,000 CERP projects funded 

by the military at a cost of over $2 billion.61 As USAID notes, there 

is a daily tension between ‘‘building capacity in the Afghan Government, putting U.S. taxpayer money on-budget, and ensuring that 

urgent [Afghan] government functions happen.’’ 62

Ultimately, the Afghan Government must be a genuine partner 

for our assistance efforts to succeed. It cannot be held accountable 

for processes over which it has little to no control. Thus, the U.S. 

Government is working to meet its Kabul Conference commitment 

to fund up to 50 percent of our aid ‘‘on-budget’’ by FY 2012 from 

approximately 21 percent in FY 2009, 35 percent in FY 2010, and 

37–45 percent in FY 2011. 63

According to the London and Kabul conference communique ́s, delivering aid through the Afghan Government is ‘‘conditioned on the 

Government’s progress in further strengthening public financial 

management systems, reducing corruption, improving budget execution, developing a financial strategy and Government capacity towards the goal.’’ 64

For instance, the Afghan Government committed at the Kabul 

Conference to pass an improved Audit Law as part of its effort to 

improve public financial management. This is also an Afghanistan 

Reconstruction Trust Fund (ARTF) benchmark. Yet the U.S. Treasury Department and many at Embassy Kabul believe that the 

Audit Law passed by the government is insufficient and does not 

meet the Afghan obligation under the ARTF benchmark. Failure to 

meet the benchmark would mean that for the first time, a certain 

amount of funds—approximately $17 million—would not be disbursed to the Afghan Government, sending a signal that these commitments matter.65 However, the U.S. Government’s current position is to accept the deficient Audit Law, despite strong internal opposition, in order to avoid a confrontation with the Afghan Government. 

The United States has committed to funding more aid directly 

through the Afghan Government, but stronger measures must first 

be taken to ensure greater accountability of our funds. 

Most of USAID’s on-budget aid—an estimated $2.08 billion—is 

provided through the ARTF, a multidonor trust fund administered 

20 

66 Response to Questions for the Record submitted to Secretary of State Hillary Rodham Clinton by Chairman John Kerry, March 2, 2011, No. 16. 67Scott Guggenheim, email message to Senate Foreign Relations Committee Majority Staff, 

April 18, 2011. 68 Response to Questions for the Record submitted to Secretary of State Hillary Rodham Clinton by Chairman John Kerry, March 2, 2011, No. 18. 69Ministry of Finance ($30 million), Ministry of Communications and Information Technology ($1 million), Ministry of Public Health ($236.5 million), USAID Salary Sup Special Posts ($2 

million), Ministry of Agriculture, Irrigation, and Livestock, Independent Directorate of Local 

Governance ($85 million), Ministry of Finance and World Bank ($2,079.5 million), Ministry of 

Education ($25 million through Danish Development Agency), Ministry of Transportation and 

Civil Aviation ($6 million), Ministry of Counter Narcotics, Ministry of Women’s Affairs, Ministry 

of Justice, Attorney General’s Office, and Ministry of Interior. For more information, see: Response to Questions for the Record submitted to Secretary of State Hillary Rodham Clinton by 

Chairman John Kerry, March 2, 2011, Nos. 15 and 16. 70Ministry of Rural Rehabilitation and Development (MRRD), Ministry of Agriculture, Irrigation, and Livestock (MAIL), Ministry of Education, Ministry of Communication and Information 

Technology, Ministry of Finance, and Ministry of Public Health. For more information, see: Response to Questions for the Record submitted to Secretary of State Hillary Rodham Clinton by 

Chairman John Kerry, March 2, 2011, Nos. 18 and 19. 71Tim Cox, ‘‘Review of USAID/Afghanistan’s Ministerial Assessment Process,’’ Review Report 

No. F-306-11-001-S, November 6, 2010, p. 4, http://www.usaid.gov/oig/public/fy11rpts/f-306-11- 

001-s.pdf. 72Special Inspector General for Afghanistan Reconstruction, Quarterly Report to the United 

States Congress, October 30, 2010, p. 10, http://www.sigar.mil/pdf/quarterlyreports/Oct2010/ 

Lores/SIGAR4Q—2010Book.pdf. 

by the World Bank.66 ARTF is a valuable instrument through 

which the United States can disburse its aid. 

But ARTF has its own challenges. It requires some structural 

changes to improve absorptive capacity and ensure adequate field 

oversight. Today, World Bank supervision is constrained by the 

Bank’s limit of 100 personnel in-country, who are expected to oversee 46 small programs.67 Donors should push for more robust supervision from the World Bank. Additionally, donors should consider using the ARTF for a smaller number, i.e., 5 to 7, of big ‘‘national programs’’ like the National Solidarity Program (NSP) to improve focus and oversight instead of dozens of smaller programs. 

Finally, since ARTF is World Bank-administered, USAID does not 

have authority to audit the ARTF and its programs directly. But 

the United States could argue for more rigorous application of the 

metrics and benchmarks of the ARTF performance fund. 

Aside from ARTF, the U.S. Government also delivers money on- budget through Afghan ministries. To date, $307 million has been 

transferred directly to Afghan ministries.68 USAID expects to de- liver at least $509.4 million through Afghan ministries after having 

completed assessments to determine which ministries can manage 

USAID funds. Currently, 14 ministries and agencies receive direct 

assistance from the State Department and USAID.69

The administration’s assessment of these ministries for specific 

projects has also run into challenges. As of September 2010, 

USAID had performed assessments of six ministries,70 but 

USAID’s Inspector General found that they ‘‘did not provide reasonable assurance of detecting significant vulnerabilities’’ that 

could result in the waste or misuse of U.S. Government resources.71 USAID and the State Department do not follow the same 

standard assessment process. SIGAR has also expressed concern 

that ‘‘the United States and other donors do not have a process in 

place to assess whether Afghan institutions have the capacity to 

manage and account for donor funds.’’ 72

Embassy Kabul has taken some action to change the assessment 

process of ministries to ensure proper safeguards of U.S. funds. 

21 

73 U.S. Congress. Supplemental Appropriations Act, 2010. 111th Cong., 2nd sess., H.R. 4899, 

Section 1004, subsection c(1). 74 According to Dr. Ashraf Ghani, as reported in The Times, ‘‘When we started in 2001 we 

had 240,000 civil servants willing to work for a government salary of £25 a month. By 2004 

all the talented ones had left to become drivers for the UN, the World Bank or charities.’’ Christina Lamb, ‘‘Afghans Plead for £25bn in Aid as Disorder Grows,’’ The Times, June 8, 2008, 

http://www.timesonline.co.uk/tol/news/world/asia/article4087300.ece. 75 Clare Lockhart, Institute for State Effectiveness, email message to Senate Foreign Relations 

Committee Majority Staff, April 24, 2011. 76 Ibid. 

More must be done. The U.S. Treasury Department, which has expertise in budgetary assessments and oversight, could assist with 

assessments in conjunction with the World Bank to ensure that our 

standards are harmonized with other donors. Increasing on-budget 

funding should be conditioned on the Afghan Government’s success 

in meeting its Kabul Conference commitments. The Afghan Government must comply with International Monetary Fund (IMF) requirements to resolve the Kabul Bank crisis. Finally, the FY 2010 

Supplemental Appropriations Act of 2010 requires the Secretary of 

State to certify that progress has been made in the areas of fighting corruption and improving governance before Economic Support 

funds and International Narcotics Control and Law Enforcement 

(INCLE) funds can be disbursed.73

Measurable progress on the part of the Afghan Government in 

these areas will demonstrate that it is committed to improving 

public financial management and able to protect money from fraud 

and abuse. Steps must also be taken to simplify the Afghan Government’s public financial control systems, which are too complicated and limit disbursement rates. 

CAPACITY BUILDING USING TECHNICAL ADVISORS

Ultimately, success will depend on the ability of the Afghan Government to provide basic services and security in a transparent, accountable, and effective manner. The United States should focus its 

assistance on the core state functions that are necessary for success. Donors will not be able to keep paying for the costs of running 

the Afghan Government indefinitely. 

Given this reality, the U.S. strategy is focused on building the capacity of Afghan institutions to deliver basic services. But our overreliance on international technical advisors to build Afghan capacity may undermine these efforts. 

According to Dr. Ashraf Ghani, Afghanistan’s former Finance 

Minister and current Presidential advisor, in 2001 Afghanistan had 

approximately 240,000 civil servants, including doctors and teachers.74 The international aid effort, with its inflated salaries, may 

have chipped away at this elementary form of governmental capacity. Instead of investing in vocational and higher education that 

would have given Afghans the skills to run their country, donors 

hired technical advisors to do these jobs at roughly 10 times the 

cost.75

For instance, in the last fiscal year, the Afghan Ministry of Education’s entire budget for vocational and higher education was only 

$35 million.76 In contrast, the State Department and USAID are 

currently spending approximately $1.25 billion on capacity-building 

22 

77The figure of $1.25 billion includes USAID estimated costs on capacity building in Afghanistan (see Appendix IV) and INL current task order year spending on capacity-building projects 

in Afghanistan (see Appendix V). USAID’s $1.1 billion capacity-building projects include $219 

million to assist the Civil Service Institute to build the capacity of line ministry employees; $102 

million to create effective municipal governance; $94 million to improve teacher performance 

and build capacity within the Ministry of Education; $92 million to develop economic and regulatory policy and support the private sector; $84 million to build the capacity of the Ministry 

of Public Health; and $41 million to develop the institutional capacity of the National Assembly. 78 Clare Lockhart, Institute for State Effectiveness, email message to Senate Foreign Relations 

Committee Majority Staff, April 24, 2011. 79 Ibid. 80 Conversation with senior Embassy Kabul officials, April 2011. 81Special Inspector General for Afghanistan Reconstruction, Quarterly Report to the United 

States Congress, October 30, 2010, p. 11, http://www.sigar.mil/pdf/quarterlyreports/Oct2010/ 

Lores/SIGAR4Q—2010Book.pdf. ‘‘Since 2002, the United States and other international donors 

have paid the salaries of thousands of civilian government employees and technical advisors to 

help build the capacity of the GIRoA. Afghanistan’s Ministry of Finance estimated that 17 donors were paying more than $45 million a year in salary support for 6,600 civilian employees 

and advisors. This support is separate from the money provided by the Afghan Reconstruction 

Trust Fund (ARTF). The ARTF pays for much of Afghanistan’s regular civil service through its 

contribution to Afghanistan’s operating budget. Since 2002, the United States has provided 

efforts.77 A significant portion is spent on technical advisors. The 

United States is currently funding approximately 260 civilian advisors, according to senior Embassy officials. 

Technical advisors work with an organization for a limited time 

to generate institutional capacity, train Afghans to perform effectively, and enable them to teach their own successors. Their work 

can be critical in such areas as fiscal policy and pension reform, 

where highly specialized technical assistance is needed. There are 

a number of cases where technical advisors have made a positive 

impact in Afghanistan. 

But there can be substantial downsides. Technical advisors are 

expensive—each one can cost between $500,000 and $1 million annually.78 They can be difficult to supervise, given the shortage of 

qualified contracting personnel. They may fail to report evidence of 

corruption or wrongdoing, believing their allegiance is to the Afghan ministry rather than the U.S. Government. They may do the 

job of Afghans themselves or impose their own vision on the institution rather than train the Afghan staff or advise the Afghan minister. Or they may introduce unsustainable high-tech methods. 

Once they are trained, Afghans may leave their ministry to take 

a job for inflated wages with international firms or missions, resulting in brain drain from Afghan institutions. The Afghan Government finds it nearly impossible to retain competent workers 

when foreign governments, aid agencies, nongovernmental organizations, and private companies offer them inflated salaries and 

benefits (‘‘top-up salaries’’)—sometimes 10 to 20 times the amount 

of base government salaries—to perform jobs within Afghan Government institutions. 

For instance, wage levels for Afghan Government staff such as 

teachers, health workers, and administrative staff are in the realm 

of $50 to $100 per month, but drivers, assistants, and translators 

for aid projects are paid upward of $1,000 per month.79 According 

to a State Department official, 40 Afghans working in professional 

positions within the government received between $3,000 and 

$5,000 per month in salary supplements from the U.S. Government, although this particular program ended in March 2011.80

Many of these donor-supported positions are not even authorized in 

the government’s staffing charts.81 These practices undermine the 

23 

nearly $922 million to the ARTF. The United States pledged $590 million for 2010 and has contributed $215 million of this amount to date.’’ Ibid., p. 10. 82 ‘‘The Scott Family Fellows program aims to recruit young professionals to support the Government of Liberia as it recovers from 14 years of brutal civil war. These young professionals 

fill a huge capacity gap and work in Liberia as ‘‘special assistants’’ to senior Liberian government officials, primarily Cabinet members. They typically have a Masters degree and one or two 

years of relevant experience. The program puts a special emphasis on encouraging qualified Liberians to apply. The Fellows work long hours in a range of activities from mundane administrative tasks to more profound policy issues, all with the goal of helping Liberia in its urgent 

reconstruction and development efforts. The Scott Family Fellows program is funded by a generous $1,000,000 grant from the family of Edward W. Scott, Jr. When announcing the program 

in February 2007, Liberian President Ellen Johnson Sirleaf said, ‘This is just the kind of support we need from our friends. I am very grateful to Ed Scott and his family for their generous 

support.’ Since its inception, the program has expanded to include other fellows funded by Humanity United, the McCall MacBain Foundation, the Open Society Institute and the Nike Foundation.’’ Scott Family Liberia Fellows, Center for Global Development, Initiatives, accessed April 

19, 2011, http://www.cgdev.org/section/initiatives/—active/scottfellows. 83 Embassy of the United States, Kabul, Afghanistan, ‘‘Afghanistan Civil Service Commission 

and U.S. Government Sign Memorandum of Understanding to Begin Civil Service Support Program,’’ February 22, 2010, http://kabul.usembassy.gov/pre—2202.html. 

goal of generating long-term Afghan capacity and are 

unsustainable. 

In order for technical advisors to play a constructive role, they 

must be monitored effectively. But our overreliance on them and 

minimal oversight has proved costly and made it harder for them 

to do their jobs. The administration should consider other options. 

For example, the Scott Family Liberia Fellows program recruits 

young professionals, including qualified Liberians, to support the 

Government of Liberia at a fraction of the cost.82 Too often, our aid 

programs assume that building capacity can only be done through 

hiring international experts to provide technical assistance. The 

Scott Family Fellows program suggests an alternative model from 

which to draw best practices. 

Embassy Kabul is addressing these issues. For instance, the Embassy now meets with technical advisors twice a month to monitor 

their work and ensure proper oversight. The Embassy should also 

examine the efficacy of its technical advisors and limit their use 

where they are not making progress. 

Perhaps the most important step the U.S. Government can take 

in conjunction with the Afghan Government and other donors is to 

standardize Afghan salaries and work within Afghan Government 

staffing constraints. This single step would have a significant and 

lasting effect on improving the capacity of the Afghan Government. 

Until this problem is resolved, programs such as the Afghan Civil 

Service Support program, which is an $84 million USAID program 

to train 4,000 civil servants in Kabul and 12,000 more in all 34 

provinces, may have limited impact in building Afghanistan’s civil 

service.83

TRANSITIONING TO AFGHAN OWNERSHIP

Increasing and improving on-budget funding, paring back the 

number of technical advisors, and standardizing salaries are important first steps for strengthening the capacity of the Afghan Government. But ultimately, Afghans have to be able to absorb donor 

programs. The United States must focus its assistance programs on 

Afghan ownership and sustainability, especially as we prepare for 

the 2014 transition. 

Too often, this is not the case. For example, in the past 5 years, the State Department has spent approximately $2 billion on counVerDate Nov 24 2008 13:20 Jun 08, 2011 Jkt 066165 PO 00000 Frm 00029 Fmt 6633 Sfmt 6633 S:\HEARING FILES\112TH CONGRESS, 1ST\STAFF TOPIC REPORTS\AFGHANISTAN RE
24 

84The Kabul compound is home to two specialized Afghan counternarcotics units-the National 

Interdiction Unit and the Specialized Investigative Unit-and is designed to support up to 400 

Afghan counternarcotics agents to work, train, and live while on duty. For more information, 

see: Department of State, Office of Inspector General, ‘‘Performance Evaluation of PAE Operations and Maintenance Support for the Bureau of International Narcotics and Law Enforcement Affairs’ Counternarcotics Compounds in Afghanistan,’’ Report Number MERO-I-11-02, 

February 2011, p. 7, http://oig.state.gov/documents/organization/157927.pdf. 85 Ibid. 86 According to one of PACE-A’s implementing partners, approximately 51 percent of the 

schools in the entire consortium project have been integrated into the Ministry of Education, 

a process that usually takes three years. 87Dr. Ashraf Ghani, ‘‘Preparing for Transition: A Policy Note on Development,’’ policy memo 

sent to Senate Foreign Relations Committee Majority Staff, May 12, 2011. 88See Appendix VII. 

ternarcotics programs in Afghanistan, including $60 million since 

2007 to support two counternarcotics compounds near the Kabul 

airport 84 and in Kunduz province. While it is a U.S. objective to 

transfer responsibilities and ownership of these compounds from 

the United States to Afghanistan, the State Department’s Inspector 

General found the Department still ‘‘has not addressed how and 

when the Afghan Government will be able to assume control and 

sustain day-to-day operations.’’ 85

In other instances, we have transferred programs to Afghan control even when the capacity does not yet exist. For example, despite 

a request from Afghanistan’s Ministry of Education (MoE) for a 

longer extension, USAID is granting a no-cost, 3-month extension 

for a successful 5-year program that expands access to primary 

education classes for more than 84,000 children, over 63 percent of 

which are girls. The $31 million program, called the Partnership 

for Advancing Community-Based Education (PACE–A), involves 

four prominent international NGOs—CARE International, Catholic 

Relief Services, International Rescue Committee, and the Aga 

Khan Foundation—who have experience providing education in 

areas not served by the MoE. 

To support the sustainability of these efforts, the NGOs work 

closely with the MoE to integrate classes into the formal education 

system and strengthen the MoE’s ability to assume responsibility 

for these classes.86 Turning this program over to the MoE prematurely could end access to education for many students, particularly girls, and jeopardize the relationships built in these communities with village mullahs that defied the Taliban to allow their 

girls to attend school. 

FISCAL SUSTAINABILITY FOR THE AFGHAN GOVERNMENT

Strengthening the capacity of the Afghan Government to undertake basic government functions is important, but it will require 

fiscal sustainability to succeed. According to the World Bank, an 

estimated 97 percent of Afghanistan’s GDP is derived from spending related to the international military and donor community 

presence. A precipitous withdrawal of international support, in the 

absence of reliable domestic revenue and a functioning marketbased economy, could trigger a major economic recession.87 USAID 

and the State Department recognize these challenges and their current planning is ‘‘anticipating both the impact of the U.S. troop 

withdrawal on the Afghan economy, and on U.S. civilian resources.’’ 88

25 

89The World Bank notes that domestic revenue collection in Afghanistan reached $1.65 billion 

in 2010/2011, double the 2007/2008 rate as a result of significant efforts by the Ministry of Finance. Afghanistan’s core budget in this period, a combination of domestic revenue and off-budget expenditures, was $4.6 billion. Its external budget, comprised of donor-financed off-budget expenditures, was reported by the Ministry of Finance to be $6 billion, though the actual amount 

may be as high as $16 billion. For more information, see: Response to Questions for the Record 

submitted to Secretary of State Hillary Rodham Clinton by Chairman John Kerry, March 2, 

2011, No. 17. 

At present, donors are picking up most of the costs of running 

the Afghan Government. Scott Guggenheim, formerly with the 

World Bank, has noted that domestic revenues only cover one-fifth 

of public spending and two-thirds of public spending is off-budget, 

which means that donors pay for most development services.89

Achieving fiscal sustainability will require the Afghan Government to (1) substitute donor grants for the operating and development budget; (2) assume external budget obligations on the operating budget; (3) pay for a share of technical assistance for core 

civil service functions; (4) fund the Kabul process; and (5) invest in 

operations and maintenance for acquired assets. Transition planning should find the right balance between avoiding a sudden dropoff in aid, which could trigger a major economic recession, and a 

long-term phaseout from current donor levels. 

These are daunting tasks. Analysts estimate that it could cost 

between $6 and $8 billion a year alone to sustain the Afghan National Security Forces, depending on the final size of the force. 

Without significant domestic revenue generation, the Afghan state 

will not be self-sufficient for decades and donors, particularly the 

United States, will have to bear the costs. With the right planning, 

Afghanistan may be able to generate substantial revenues from its 

sizeable mineral deposits in the future, but we do not see any signs 

of near-term revenue generation from its mineral wealth. 

In the short term, it will be critical to build the private sector 

and attract foreign investment. Our aid programs should be designed with foreign capital in mind. Our capacity-building efforts 

should focus on key ministries and institutions that must work for 

the Afghan Government to deliver rather than an across-the-board 

approach to strengthen all ministries. Instead of creating additional off-budget assets like schools, clinics, and roads, our attention must turn to how the Afghan Government will sustain and 

staff what the donor community has already built. 

CASE STUDIES

CASE STUDY A: SUCCESS OF NATIONAL PROGRAMS WITH LOCAL BUYIN—THE NATIONAL SOLIDARITY PROGRAM AND BASIC PACKAGE OF

HEALTH SERVICES

The National Solidarity Program and Basic Package of 

Health Services illustrate how national-level programs that 

are on-budget and have significant Afghan buy-in can 

achieve more with less. These programs exemplify the goals 

of being ‘‘necessary, achievable, and sustainable.’’ 

26 

90Thomas Barfield and Neamatollah Nojumi, ‘‘Bringing More Effective Governance to Afghanistan: 10 Pathways to Stability,’’ Middle East Policy 17 (December, 2010): 40–52. 91 Ibid., p. 40. 92Statement by President Karzai at International Kabul Conference, July 20, 2010. 93Office of the Special Inspector General for Afghanistan Reconstruction, ‘‘Afghanistan’s National Solidarity Program Has Reached Thousands of Afghan Communities, but Faces Challenges that Could Limit Outcomes,’’ March 22, 2011, pp. ii and 5, http://www.sigar.mil/pdf/audits/SIGARAudit-11-8.pdf. 94 Ibid. 

Imposing governance from the center has never been effective in 

Afghanistan.90 According to anthropologist Thomas Barfield: 

While governments in the developed world are the unquestioned suppliers of governance to their local communities, this has not been the case historically in Afghanistan. Here one finds adequate local governance in the absence of formal government institutions . . . Successful regimes in Afghanistan have recognized this reality by devolving considerable informal decisionmaking power to 

local communities, letting them solve their own problems 

so that the state does not have to intervene. In return, 

local communities have recognized the sovereignty of the 

Afghan national state and have not challenged its legitimacy.91

As Barfield’s analysis suggests, our goal should be to strengthen 

local traditions of governance even as we work to develop the central institutions of the Afghan state. Assistance programs that are 

successful in Afghanistan involve strong participation and ownership from local communities. As President Karzai noted at the 

Kabul conference: 

Despite some noteworthy achievements, we have learned 

together that delivering our resources through hundreds of 

isolated projects will not generate the desired results, 

achieve public visibility, or support the establishment of 

good governance. It is time to concentrate our efforts on a 

limited number of national programs and projects to transform the lives of our people, reinforce the social compact 

between state and citizens, and create mechanisms of mutual accountability between the state and our international 

partners.92

The best example of this is the National Solidarity Program 

(NSP), which is the Afghan Government’s principal community development program. The United States is the largest NSP donor, 

giving $528 million from June 2002 to September 2010, including 

$225 million from FY 2010 funds through the ARTF.93 NSP promotes subnational governance by setting up community development councils (CDCs) and training them to manage small-scale 

projects funded by block grants. The program currently reaches 

23,000 villages, covering 351 of Afghanistan’s 398 districts in all 34 

provinces.94

According to Guggenheim, who largely designed the program, 

NSP works because the government apex role is strong but simple, 

execution is outsourced to the communities, disbursements are 

transparent, standardized, and streamlined, and there is strong 

27 

95 Ibid., p. 13. 96 Ibid., p. 13. 97 According to USAID, the Ministry of Public Health was ‘‘the first Afghan ministry certified 

in 2009 to receive $239 million in direct funding from the U.S. government to implement the 

BPHS in 13 provinces,’’ including Badakhshan, Baghlan, Bamyan, Faryab, Ghazni, Hirat, 

Jawzjan, Kabul, Kandahar, Khost, Paktya, Paktika, and Takhar. For more information, see: 

U.S. Agency for International Development, ‘‘Fact Sheet: Health Service Delivery Grant - Partnership Contracts for Health (PCH),’’ July 2010. 

monitoring and evaluation with expatriate help. SIGAR’s recent 

audit of NSP found strong community oversight of NSP funds: 

The high level of community involvement in NSP activities—CDC elections, social audits, and community contributions—has resulted in a degree of local ownership of 

NSP-funded projects which helps safeguard assets. Facilitating partners reported that, in some cases, community 

members intervened and recovered money when block 

grant funds were stolen by thieves or embezzled by CDC 

members. According to one facilitating partner, the 

Taliban are less likely to burn NSP schools because communities defend them.95

While NSP is one of the best development programs in Afghanistan, it too can be improved. Currently, unpredictable donor contributions block strategic planning and communities only receive 

one-time bloc grants, despite having created significant community 

social infrastructure that could be used to further ongoing governance and development programs. Ensuring consistency in funding 

will be critical as NSP expands into less permissive areas. NSP 

could become a key pillar of transition because it can provide villages with a tangible dividend from peace. 

The United States could also work with the Government of Afghanistan to improve oversight and internal controls, strengthen 

reporting mechanisms on local governance, and ensure that block 

grants and payments to facilitating partners are disbursed in a 

timely fashion.96 By opening its transport system to senior Afghan 

staff, the United States could facilitate monitoring and oversight of 

NSP disbursements. There are a number of national programs that 

were initially designed for Afghanistan in addition to NSP that 

could work well with donor support. 

Another successful model of delivering assistance in Afghanistan 

is the Basic Package of Health Services (BPHS).97 Established in 

2003, BPHS provides a standardized package of basic services, including maternal and newborn health, child health, and public nutrition, at the four primary health care facilities within the Afghan 

health system: health posts at the community level, basic health 

centers, comprehensive health centers, and district hospitals. 

BPHS has proved a remarkable success, given the state of health 

care 8 years ago. It has helped unify Afghanistan’s health system; 

improved coordination among the Afghan Government, donors, and 

NGOs; and dramatically increased the percentage of the population 

with access to primary health care. National coverage rates have 

risen from an estimated 9 percent in 2003 to 85 percent in 2008 

and under-5 mortality rates have dropped by 26 percent since 

28 

98 ‘‘Building on Basics in Health Care,’’ The World Bank, Last updated June 2009, http:// 

web.worldbank.org. 99 Between FY2002–2010, the United States spent an estimated $672 million on education assistance in Afghanistan. 100 Center for Complex Operations official, relaying comment made by a PRT member in Afghanistan, April 2011. 

2002.98 Between FY 2002 and FY 2010, the United States provided 

roughly $798 million in health assistance to Afghanistan. 

With the right investments and leadership within the Ministry 

of Education, the BPHS model could be extended to the area of 

education. While the United States has dedicated considerable resources to support basic and higher education, teacher trainings, 

and textbooks for primary schools in Afghanistan, international 

donor efforts in the education sector are piecemeal and not coordinated for maximum effect.99 According to one U.S. official: 

The Afghan Government is constantly outraged by the 

fact that they see the Germans build a school here, the 

French supply schoolbooks there, and the Belgians do a 

teacher meeting at a third location, which means you have 

three separate projects that fail, rather than one project 

that would succeed if, indeed, you knew about them and 

were able to steer them to work together. 100

CASE STUDY B: ISSUES OF SUSTAINABILITY—THE PERFORMANCEBASED GOVERNORS FUND

The Performance-Based Governors Fund illustrates how 

the design of our aid programs impacts the outcome. While 

it may be ‘‘necessary’’ in its second phase, the program in 

its current design may not be ‘‘achievable’’ or ‘‘sustainable.’’ 

The Performance-Based Governors Fund is a program run by the 

Asia Foundation that aims to empower provincial governors by providing them with operational budgets to improve their relationships with constituents and their overall management capacity. 

Most provincial governors receive relatively few resources from the 

federal government and lack capacity to execute their modest budgets. 

In the first phase, the program gave each governor $25,000 per 

month to spend on specified administrative expenses and a financial advisor to help identify budget priorities, make expenditures, 

and account for them. The goal was to teach governors how to execute budgets. Funds could be used for (1) vehicles, utilities, furniture, and equipment; (2) travel and transportation; (3) maintenance and repair of public facilities; (4) computer, information technology, and communications; (5) capacity building; and (6) community outreach. 

Development experts criticized the design of the program because 

it had no impact on the governor’s actual performance. Every governor, even those known to be corrupt, received the funds. 

To address these concerns, the second phase of the program has 

been expanded to include incentives to improve governance. The 

program now has a mechanism that can increase or reduce the 

monthly amount based on the governor’s performance. It also 

added a development component: a well-performing governor can 

29 

receive an additional $75,000 per month to spend on local development projects determined in consultation with provincial councils 

and other local groups. 

Nevertheless, significant challenges remain. USAID has yet to 

bring the program fully on-budget in part as a result of concerns 

expressed by the Government of Afghanistan that it lacked the capacity to implement the program effectively at the central and provincial levels. Off-budget funding of the program renders it susceptible to the problems noted earlier. In addition, the Ministry of Finance has a budget execution rate of approximately 35 percent, 

which means that donor funds are replacing national government 

funds that are available but not reaching the provincial level. Oversight will be difficult since field audits are limited. USAID and its 

implementing partner may not have enough supervisory personnel 

to ensure that funds are properly spent and accounted for. 

Absorptive capacity is another concern. In some provinces, the 

governors have the capacity to allocate a $1.2 million annual budget. However, in less-developed provinces, this amount represents a 

tidal wave of funding that could hamper the ability of local officials 

to spend the money wisely. Excess funding could lead to corruption 

and waste. Finally, the program is not sustainable unless concrete 

steps are taken to build the capacity of the Afghan Government to 

execute the program and include it within its budget. Currently, 

the Independent Directorate of Local Governance does not have the 

capacity to run this program. 

In sum, the program in its current form may not be achievable 

or sustainable. USAID should only go forward with the program if 

it can eventually be put on-budget, reduce funding in provinces 

where absorptive capacity is low, and ensure sufficient oversight. 

As donor funding declines for this program in outlying years, steps 

must be taken to replace these funds with domestic resources. We 

look forward to working with USAID as it explores options to bring 

the program on-budget over the next 18 months. 

RECOMMENDATIONS

We urge the administration to focus its assistance strategy on 

what is necessary, achievable, and sustainable. Below are the three 

overarching steps that would help lay the foundation for more successful development outcomes in Afghanistan. 

1) Consider authorizing a multiyear civilian assistance strategy 

for Afghanistan. The administration and Congress should consider working together on a multiyear authorization that includes: (a) a clearly defined assistance strategy; (b) the tools, 

instruments, and authorities required for a successful development approach; (c) a plan as to how U.S. funding will leverage 

and partner with Afghan domestic policies, with multilateral 

efforts—including the World Bank, Asian Development Bank, 

and Islamic Development Bank—and with private sector financing; (d) the civilian resources needed for a successful military draw down and transition; (e) the steps needed to ensure 

accountability, oversight, and effectiveness; and (f) metrics that 

measure performance and capture outcomes. The strategy 

should also establish benchmarks for the Afghan Government 

30 

to fulfill its international commitments, outline goals for improving donor coordination, and include specific annual funding levels. This process would clarify the U.S. assistance strategy, offer greater predictability on future funding levels, and 

provide Congress with robust tools for oversight. 

2) Reevaluate the performance of stabilization programs in conflict zones. We must challenge the assumption that our stabilization programs in their current form necessarily contribute 

to stability. The administration should continue to assess the 

impact of our stabilization programs in Afghanistan and reallocate funds, as necessary. 

3) Focus on sustainability. We should follow a simple rule: Donors should not implement projects if Afghans cannot sustain 

them. Development in Afghanistan will only succeed if Afghans 

are legitimate partners and there is a path toward sustainability. The Afghan Government must have sufficient technical 

capability and funding to cover operation and maintenance 

costs after a project is completed. A sustainability strategy 

would consolidate our programs, increase on-budget aid, 

streamline our rules and controls, and pursue a limited number of high-impact programs that do not require complex procurement or infrastructure. We should also focus on raising domestic revenue, reducing aid dependency, and developing partnerships with the private sector to create jobs. Success should 

not be measured by outputs or the amount of money spent, but 

by the ability of Afghan institutions to deliver services, the Afghan private sector to generate jobs and grow the economy, 

and Afghan civil society and public institutions to provide avenues for citizens to hold their government accountable and participate in political and civic life. More thought should be given 

to the type of projects we fund. Our aid should be visible 

among Afghans, and we should have a robust communications 

strategy in place so Afghans know what U.S. civilian aid in Afghanistan is accomplishing. 

(31) 

101On the vulnerability of certain violence-producing groups to government service provision, 

see: Eli Berman, Radical, Religious, and Violent: The New Economics of Terrorism. Cambridge: 

MIT Press, 2009. 102 Jason Lyall and Isaiah Wilson III, ‘‘Rage against the Machines: Explaining Outcomes in 

Counterinsurgency Wars,’’ International Organization 63 (2009): 67–106. 103 Eli Berman, Jacob N. Shapiro and Joseph H. Felter, ‘‘Can Hearts and Minds Be Bought? 

The Economics of Counterinsurgency in Iraq,’’ NBER WP #14606, March 2009, Last revised: 

April 2011, http://igcc.ucsd.edu/DACOR. 104The authors ‘‘find some evidence that the program [NSP] improved perceptions of the security situation, but do not find any effects on the actual occurrence of security incidents in and 

around villages.’’ Andrew Beath, Fontini Christia, and Ruben Enikolopov, ‘‘Winning Hearts and 

Minds?’’ Evidence from a Field Experiment in Afghanistan,’’ Massachusetts Institute of Technology, Working Paper, Last revised: April 11, 2011, http://www.nsp-ie.org/papers/hearts.pdf. 

Annex—Academic Literature Review: 

Development and Counterinsurgency 

There is a bourgeoning literature on development and counterinsurgency (COIN). Recent work on the development-COIN nexus 

has modeled insurgencies as competitive governance systems that 

seek to capture the support of the local population. In a competitive 

governance environment, civilians will condition their support for 

the government on sustainable and transparent service provision. 

To that end, various scholars have recommended building Afghan 

Government capacity to provide services at the local and provincial 

levels through small, community-based projects that are informed 

by local needs. Development resources can be violence-reducing and 

prompt defection within the insurgent’s ranks,101 but only under 

certain conditions: 

• Knowledge of community needs: Counterinsurgent forces 

should be dispersed, less mechanized,102 and should interact 

closely with local political leaders to gain information about 

community needs. Knowledge of local needs, as opposed to the 

size of one’s forces, can enhance the effectiveness and legitimacy of service provision. For instance, Berman, Shapiro, and 

Felter find that small-scale reconstruction spending allocated 

through CERP reduced violence in post-surge Iraq when operational changes in U.S. strategy encouraged greater contact 

and engagement with the local community.103

• Small projects in secure areas: Small grants implemented 

through community-based mechanisms in secure areas stand a 

greater chance of success than large, big-ticket infrastructure 

projects. One working study, which uses a randomized field experiment spanning 500 villages across 10 Afghan districts, 

finds that NSP has led to ‘‘a significant improvement in villagers’ perception of their economic well-being as well as in 

their attitudes toward all levels of government.’’ 104

• Employment and Counterinsurgency: Providing legitimate employment opportunities may increase popular support for the 

32 

105Paul Collier and Anke Hoeffler, ‘‘Greed and Grievance in Civil Wars.’’ Oxford Economic Papers 56 (2004): 563–95. 106 Eli Berman, Michael Callen, Joseph H. Felter, and Jacob N. Shapiro, ‘‘Do Working Men 

Rebel? Insurgency and Unemployment in Afghanistan, Iraq, and the Philippines,’’ Journal of 

Conflict Resolution, published online March 22, 2011, http://jcr.sagepub.com/content/early/2011/ 

03/16/0022002710393920.full.pdf+html. 

government, but only under certain conditions. Collier and 

Hoeffler argue that improved economic opportunities can increase the cost of insurgent recruitment and diminish potential 

rebel supply.105 Berman, Callen, Felter, and Shapiro, however, 

find a negative correlation between unemployment and insurgent violence in Iraq, the Philippines, and Afghanistan.106

They posit that higher unemployment rates lower the price of 

obtaining information from the population about the insurgent’s whereabouts and result from certain COIN tactics such 

as establishing security checkpoints that disrupt legitimate 

commerce. While the literature remains inconclusive, it suggests that we should pay careful attention to the conditions of 

each sector, resource endowments, local perceptions, and levels 

of income inequality at both the national and subnational levels when designing programs to improve labor market opportunities for communities in conflict areas. 

(33) 

A P P E N D I X E S 

34 

35 

APPENDIX II: USAID Funding by Province 

in Afghanistan, FY 2009–2010 

Source: Response to Questions for the Record submitted to Secretary of State Hillary Rodham Clinton by Chairman John Kerry, March 2, 2011, No. 21. 

36 

APPENDIX III: USAID Funding by Province 

in Afghanistan, FY 2011 

Source: Response to Questions for the Record submitted to Secretary of State Hillary Rodham Clinton by Chairman John Kerry, March 2, 2011, No. 22. 

37 

APPENDIX IV: USAID/Afghanistan: Capacity Development 

Programs with GIRoA 

Source: Response from State Department to SFRC majority staff, February 9, 

2011. 

38 

APPENDIX V: Capacity Building Programs in 

Afghanistan—INCLE 

The State Department’s Bureau of International Narcotics and Law Enforcement 

Affairs (INL), through the International Narcotics Control and Law Enforcement 

(INCLE) account, provides capacity building to Afghanistan ministries focused on 

the provision of internal security, rule of law, and enforcement of Afghanistan’s illicit narcotics laws. INL’s capacity building programs in Afghanistan help build the 

organizational and human capacity of Afghan Government Ministries to effectively 

and independently fulfill their core functions. 

INCLE funds the following capacity building programs: 

• Justice Sector Support Program ($64 million for current task order year May 

2010–May 2011): Launched in 2005, the Justice Sector Support Program (JSSP) 

is the primary capacity building vehicle of INL’s criminal justice assistance 

through training, mentoring, and technical support. JSSP supports capacity 

building efforts within the following Ministries: the Ministry of Justice (MOJ) 

and Attorney General’s Office (AGO) and, to a lesser degree, the Ministry of Interior (MOI), the Ministry of Women’s Affairs, and the Supreme Court. Through 

the creation of close partnerships between JSSP advisors and Afghan Government officials, the program’s main goal is to help create sustainable improvements in the Afghan Government’s delivery of justice to the Afghan people. In 

terms of nationwide reach, JSSP is the largest justice assistance program in Afghanistan today, with 93 Afghan legal experts, 65 American advisors, and over 

100 Afghan support staff. 

• Corrections System Support Program ($63 million for current task order year 

May 2010–May 2011): Launched in 2006, INL’s Corrections System Support 

Program (CSSP) partners with the Afghan Ministry of Justice’s (MOJ) Central 

Prison Directorate (CPD) to build a safe, secure, and humane prison system 

that meets international standards and Afghan cultural requirements. CSSP focuses on CPD headquarters capacity building, basic and advanced nationwide 

training, infrastructure program management, advising provincial prison leadership on secure and humane corrections practices, and providing mentoring 

and support at the Counter-Narcotics Justice Center. CSSP currently has 71 

American corrections advisors and over 200 Afghan staff. CSSP is based in 

Kabul and has seven regional teams located at the RTCs in Balkh, Herat, 

Nangarhar, Kunduz, Bamiyan, and Paktia and the Provincial Reconstruction 

Team (PRT) in Kandahar. 

• Ministry of Counternarcotics Advisors ($800,000 for first program year; $25 million planned): INL has provided the Ministry of Counter Narcotics (MCN) with 

two advisors, an Executive Advisor and a Capacity Building Advisor. These advisors provide advice and support on MCN policies and programs and assess capacity building requirements. To further advance the goal of building MCN capacity, INL proposes a new, multi-year, $25 million program to develop the 

MCN’s human and bureaucratic capacity in order to promote its independence 

and effectiveness. The MCN capacity building program will provide expatriate 

and Afghan advisors for the MCN’s Kabul headquarters and provincial offices 

as well as support for the Ministry’s human resources, information technology, 

commodities, logistics, and engineering. 

• Ministry of Interior—Counternarcotics ($2.4 million for current task order year): 

As part of its larger contract supporting operations and facilities maintenance 

for the Counternarcotics Police of Afghanistan’s vetted units, which are 

mentored by DEA, INL provides six additional advisors/mentors to the National 

Interdiction Unit and the Sensitive Investigative Unit. These individuals work 

to assist DEA in building the capacity of the vetted units not just operationally, 

but also in the areas of administration, logistics, and management. 

Source: Response from State Department to SFRC majority staff, February 9, 

2011. 

39 

APPENDIX VI: Letter From Deputy Secretary of State 

Thomas R. Nides to Chairman John F. Kerry on June 6, 2011 

40 

41 

APPENDIX VII: Letter From USAID Administrator Rajiv 

Shah to Chairman John F. Kerry on June 1, 2011 

42 

43 

44 

45 

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