Afghanistan has begun the slow process of reconstruction. According to many observers, themost serious challenge facing Afghans and Afghanistan today remains the lack of security. Whilethe Taliban regime fell and the new government has celebrated its first anniversary, Afghanistan isstill in a peacebuilding process, an essential part of which is reconstruction. Most observers agreeon the need for substantial, long-term reconstruction and the need for international support, butquestions are raised about the funds required, the priorities, and the coordination necessary for thisprocess. This report examines U.S. foreign aid to Afghanistan in the context of the internationaleffort and explores the major issues for Congress. The United States, other countries, and international relief organizations have long been active in providing assistance to the Afghan people. (1) During the 1980s, the United States along with othercountries had funded, through Pakistan, the mujahedin forces fighting against the Soviet Union, aswell as providing humanitarian aid to the large refugee camps in Pakistan. After the Soviet Unionleft Afghanistan and dissolved, the United States sharply reduced its programs. From FY1994, theUnited States Agency for International Development (USAID) did not have a mission inAfghanistan, but continued to provide aid mainly through U.N. agencies and non-governmentalorganizations (NGOs). During the violent civil war that lasted throughout the 1990s, the UnitedNations continued to seek a peace agreement, which would allow for sustained reconstruction. However, with the failure of several peace agreements, the international donor community focusedprimarily on humanitarian aid because the conditions were not stable for long-term development anddonors did not want to provide assistance to the Taliban, which came to power in 1996. Between1996 and 2001, the United States alone provided half a billion dollars in emergency aid toAfghanistan. (2) The assistance situation changed dramatically once the Taliban was removed from power, allowing for the implementation of humanitarian assistance and the development of reconstructionplans. These plans quickly took shape with the Bonn Accord on December 5, 2001, which led to theformation on December 22, 2001 of an interim government led by Hamid Karzai. The centralgovernment was further strengthened in June 2002 through the loya jirga , which was attended by1,550 delegates. It chose a new government to run Afghanistan for the next two years during whichtime a new constitution is to be drafted and elections are to be held. At the loya jirga , Karzai waschosen to lead the new government named the Islamic Transitional Government of Afghanistan(ITGA). The Afghan government has been working with the international donor community onreconstruction programs and plans, since a major donor conference in January 2002 in Tokyo andsubsequent ongoing meetings with international donors. As a result of decades of violent conflict, Afghanistan is in great need of substantial reconstruction, from roads and schools to a broad range of development projects encompassing thewhole country. According to USAID, the decades of civil war and proxy regional war have createdfour intertwining and competing economies in Afghanistan. (3) These economies create conflictingincentives for Afghans and their neighbors and have a determining influence on the future ofAfghanistan. There is the war economy, an economy of arms trafficking, looting, kidnaping, black market activity, and the brokering of violence. Different factions, funded by neighboringcountries, control border crossings, generate revenue from trade and illicit smuggling, supportmilitias through arms purchases, and thus fuel violence. Some contend that this economy createsincentives for the continuation of conflict; Connected with the first is the drug economy. (4) Poppy trade provides substantialincome for some Afghans, but also has led to skyrocketing addiction rates in the region and createdincentives leading away from other forms of agriculture critical to the sustained livelihood of thecountry; As a result of decades of conflict, deep poverty, and on-going drought, manyAfghans rely on the benevolence of the international community, which has created a humanitarianaid economy. While humanitarian aid is essential in the short-term, the influx of money and peoplecan create distortions in local markets and provide few incentives for local production. As a result,development aid agencies will be critical to assisting Afghans with local production; Agriculture has always been a mainstay of the Afghan economy, and, before the civil war, Afghanistan had been self-sustaining in agricultural production. In addition,Afghanistan also has other economic sectors, though much weakened by war. The most vibrantsector is transportation, which has long traversed Afghanistan and connected Central Asia with theMiddle East and South Asia, but Afghanistan also has coal mines, oil and natural gas reserves, anda carpet weaving industry. Effective reconstruction assistance could reconfigure these economies, reduce the war and drug economies, and provide incentives for viable economic growth. Before reconstruction recently got underway, the United States and the international community provided other forms of assistance: humanitarian, military, and security. During the height of theanti-Taliban war and with the preparations for both winters (2002 and 2003), the focus of assistancewas on the continuation of the war and on humanitarian aid and quick-impact projects. Humanitarian, military, and security assistance continue. Humanitarian Assistance. The United Nations and other organizations have provided Afghans humanitarian assistance since at least 1979, whenthe Soviet Union invaded Afghanistan. (5) As a resultof this long-term involvement, the UnitedNations and other organizations had a basic institutional network in the region to provide and expandhumanitarian assistance. Since the fall of the Taliban regime and the establishment of a new government, this institutional network has been utilized. The Afghan government and the international donorcommunity have sought to focus on reconstruction, but humanitarian relief assistance continues tobe greatly needed. The overwhelming majority of assistance (outside of military aid) to date hasbeen spent on humanitarian needs. The United States has been the largest contributor ofhumanitarian assistance to Afghans. (6) Refugees and internally displaced persons (IDPs) have been the focus of much humanitarian assistance. These groups have been returning to their homes in unexpectedly high numbers. The U.N.High Commissioner for Refugees (UNHCR) reports that since March 1, 2002, more than two millionAfghan refugees have repatriated mainly from Pakistan but also from other neighboring countries. This is more than double the number expected by UNHCR. As of August 2002, another 230,000IDPs returned to their homes with the assistance of the International Organization for Migration(IOM). (7) Returnees require continuing humanitarianaid, but they also need transitional assistancefor resettlement, such as housing supplies, seeds and agricultural resources, jobs, and other services.With the return rate higher than expected, UNHCR and other aid agencies remain very concernedthat they cannot provide returnees with the same level of resources as previously and that returneesare also returning to a lack of adequate resources. At the same time, there are many other refugees and IDPs who have still not returned to their homes and require humanitarian assistance. The difficulties of winter are affecting large proportionsof the Afghan population, not only returning refugees and IDPs. In response, aid agencies haveprepositioned food, clothing, and other items, particularly in areas typically isolated during thewinter. Furthermore, the region has been affected by a severe drought since 1999. While some areashave improved, the drought continues, which means that some areas cannot return to previous levelsof agricultural production and continue also to rely on humanitarian assistance. Military Assistance. The international military involvement in Afghanistan, Operation Enduring Freedom (OEF), began on October 7, 2001.Twenty-seven nations have deployed more than 14,000 troops in support of OEF. (8) Of these twentyseven, 14 NATO members, NATO Partners, and other countries have been involved through specialoperations forces, the provision of planes and ships, and operations involving surveillance andinterception. OEF continues with 9,000 U.S. troops and about 2,500 non-Afghan, non-Americantroops. These troops in Afghanistan continue to search for Taliban and al Qaeda fighters andweapons caches in southern and eastern Afghanistan. (9) According to the Department of Defense(DOD), the cost of the war in Afghanistan has been $12.595 billion for the United States inFY2002. (10) According to the Afghan government, the United Nations, and international NGOs, the lack of security remains the most serious challenge. (11) Former commanders maintain control over their ownareas and continue fighting with their rivals, which further makes difficult the extension of thenational government, the provision of humanitarian assistance, and the initiation and implementationof reconstruction. With the continued fighting and insecurity, the process of demobilization andintegration of combatants has been slow, but on January 10, 2003, the United Nations and theAfghan government announced a plan for 250,000 militiamen to hand over their weapons inexchange for cash, vocational training, and employment assistance. (12) The main programs to improve the security situation have been the insertion of the International Security Assistance Force (ISAF) and the creation of an Afghan National Army (ANA) and policeforce. (13) ISAF is a U.N.-mandated, multinationalforce deployed in and around Kabul as apeacekeeping force since December 20, 2001. Twenty-three countries, mostly NATO allies, havecontributed troops or personnel to the 4,500-strong force. The mission of the ISAF is to (1) assistthe interim Afghan government in building a national security infrastructure, (2) assist in thecountry's reconstruction, and (3) assist Afghanistan in training its future security forces. At the endof June 2002, the United Kingdom handed over to Turkey the command of ISAF. Germany and theNetherlands took over command of ISAF on February 10, 2003. U.S. troops provide some assistanceto the ISAF (i.e., logistical, intelligence, and quick reaction force support), but they do not engagein peacekeeping. President Karzai, U.N. officials, and others have asked that ISAF be expanded, so that peacekeeping could take place outside of Kabul, but there has been a lack of international consensuson this issue. (14) In response to security concerns,the Pentagon has initiated a shift from an emphasison military action to one on reconstruction and security. While U.S. military action continues underOEF, by February 2003 the U.S. military planned to put 75% of its effort towards reconstructingsecurity services and supporting civil reconstruction through "provincial reconstruction teams,"which would join civilian and military efforts in regional areas outside Kabul. (15) The United Stateswill also be centrally involved in the training of the ANA. According to government officials, theUnited States will keep some troops in Afghanistan for several years. (16) The international recovery and reconstruction effort in Afghanistan is immense and complicated, with the Afghan government, numerous U.N. agencies, bilateral donors, manyinternational organizations, and countless NGOs working to help Afghanistan. The internationalcommunity and the Afghan government have sought to establish a common set of goals in order toutilize donor funds most effectively. In agreement with many in the international donor communityduring its six-month tenure, the first transitional government identified intended outcomes of thereconstruction process: political stability and security, access to basic services, an adequate standardof living for its people, economic growth, and, in the long term, independence from foreign aid. (17) However, these goals are broad and abstract because Afghanistan not only experienced 23 years of war but also was one of the less developed countries even before the war. Particularly in the caseof Afghanistan, humanitarian assistance, reconstruction, and development are not easily separable. Humanitarian assistance can overlap with the goals of reconstruction, such as by repairing watersystems to provide clean water or by providing basic building materials to repair housing. Reconstruction and development further blend in the case of Afghanistan. These efforts run onparallel and sometimes overlapping tracks. To understand the reconstruction process in Afghanistan, it is useful to be familiar with thedifferent institutions involved in the process and their own particular institutional mechanisms forconducting and coordinating post-conflict reconstruction. Many of these mechanisms were put intoplace during earlier reconstruction attempts in Afghanistan or were a result of lessons learned fromother post-conflict countries. Building on these initiatives, the international community seesAfghanistan as a test case for new forms of donor coordination. As a result, not only is Afghanistanthe beneficiary of past practices, but also the international community, including the United States,has invested itself in the success of Afghan reconstruction. Before 2001, U.S. aid to Afghanistan mainly flowed through U.N. agencies and NGOs, but the U.S. role increased dramatically since Operation Enduring Freedom (OEF) began. (18) U.S.government funding has come from three main agencies - USAID, the State Department, andDepartment of Defense (DOD) - and follows several routes to Afghanistan. First, the United Statesprovides bilateral aid to Afghanistan. These bilateral funds are either distributed to NGOs, whichprovide services in Afghanistan, or directly to the Afghan government. At USAID, funds aredistributed through the Office of Foreign Disaster Assistance (OFDA), the Office of TransitionInitiatives (OTI), the Office of Food for Peace (FFP), Economic Growth Agriculture and Trade(EGAT) Bureau, and the Asia Near East (ANE) Bureau. (19) At the State Department, funds aredistributed through the Bureau for Population, Refugees, and Migration (PRM), Bureau forInternational Narcotics and Law Enforcement Affairs (INL), and Humanitarian Demining Programs(HDP). DOD provides funding through its Overseas Humanitarian, Disaster and Civic Aid(OHDACA) program, which includes three segments: the Humanitarian Mine Action Program, theHumanitarian Assistance Program, and Foreign Disaster Relief Assistance. (20) Military and securityassistance are also provided through the DOD. Other funds are distributed through U.S. Departmentof Agriculture (USDA) and the Centers for Disease Control and Prevention (CDC). Second, Afghanistan also receives U.S. aid through multilateral institutions. The most important avenue is through the United Nations and its affiliated agencies, such as U.N. HighCommissioner for Refugees (UNHCR), U.N. Development Program (UNDP), the World FoodProgram (WFP), and World Health Organization (WHO), and through international financialinstitutions, such as the World Bank and the International Monetary Fund (IMF). Some U.S. fundingfor Afghanistan comes from U.S. dues and additional voluntary donations to the United Nationsthrough the State Department's International Organizations account or, in the case of UNHCR,through the State Department's Migration and Refugee Assistance (MRA) account and EmergencyRefugee and Migration Assistance (ERMA) Fund. Funds for the World Bank and other internationalfinancial institutions are allocated through the Treasury Department within the foreign operationsappropriation bill. For countries emerging from conflict, the international donor community has established a series of institutional mechanisms for developing and coordinating reconstruction. Though adaptedto specific situations, these institutional mechanisms are generally the same. In general, theinternational donor community is considered to be made up of international organizations and donorcountries. This section provides an overview of the institutional map of the international donorcommunity working with Afghanistan. Pre-existing Institutions. Many institutions were in place before September 11, 2001. The United Nations and the World Bank demonstrate thelargest institutional presence in conflict and post-conflict areas, though many NGOs and otherinternational actors have long played an essential assistance role in Afghanistan. In Afghanistan in1988, the Geneva Peace Accords were signed, which led to the Soviet withdrawal. With the peaceaccord in place, the United Nations established an active presence in Afghanistan. The UnitedNations commonly maintains separate offices for (1) political and peace processes (Pillar I) and (2)humanitarian and reconstruction operations (Pillar II). Since 1988 in Afghanistan, these offices hadreceived a series of different names, but most recently the Pillar I office was run by the UnitedNations Special Mission to Afghanistan (UNSMA) and the Pillar II office was run by the UnitedNations Office for Coordination of Humanitarian Affairs (UNOCHA). With each attempt at a sustainable peace, the United Nations sought to implement reconstruction. As the U.N.'s development agency, UNDP in 1993 conducted a major study for theimmediate rehabilitation and long-term reconstruction of Afghanistan in response to peace accordsin that year. As a result, UNDP and others had systematically examined the humanitarian andreconstruction needs of a post-war Afghanistan, but the peace process did not hold and fightingbegan again. In 1997, there was hope again for a peace accord. (21) In Afghanistan, UNDP developed itsStrategic Framework, a new coordinating structure aimed to bring coherence to multilateral, bilateral,and non-government efforts. The UNDP planned to reorient international development accordingto this new structure, and thus Afghanistan played an important role in these new ideas andprograms. As part of this framework, the United Nations organized the International Forum onAssistance to Afghanistan in Turkmenistan, which led to the Afghanistan Support Group (ASG).Made up of the 15 largest donor countries and the EU, ASG met (until recently) twice per year andfocused on coordination of humanitarian relief efforts. (22) Since September 11, 2001, this formalcoordinating structure for humanitarian and reconstruction efforts has been utilized. The World Bank has also had a continuing role. For countries in conflict, the World Bank generally puts them in "Watching Brief" status, during which the World Bank monitors the country'seconomy and provides analytical support to international relief agencies at work within its borders,thus supporting preparation efforts for reconstruction. In 1997, Afghanistan entered Watching Briefstatus, which, beyond monitoring, also provided funds for training of Afghan women'snon-governmental organizations based in Pakistan and for training of Afghan teachers in refugeecamps also in Pakistan. New Coordinating Institutions. In November 2001, with the possibility of the fall of the Taliban and a potential opening for sustainablereconstruction work, the international donor community quickly began new initiatives. The donorcountries formed the Steering Group for Assistance in the Reconstruction of Afghanistan inWashington, DC, chaired by the European Union, Japan, Saudi Arabia, and the United States. TheSteering Group began an assessment of Afghanistan's needs. To coordinate donor activities on amore operational level, the Steering Group in January 2002 formed the Implementation Group,which met quarterly in 2002 in Kabul, providing further support to the Afghan government. The World Bank with other multilateral organizations organized several conferences where Afghans, NGOs, and donors discussed reconstruction. The World Bank also prepared a TransitionalSupport Strategy (TSS) that outlines a range of tasks, while the UNDP organized an ImmediateTransitional Assistance Program (ITAP). The ITAP sets out immediate tasks and quick-impactprograms. In March 2002, the United Nations formed United Nations Assistance Mission inAfghanistan (UNAMA) bringing together the political (Pillar I) and humanitarian/reconstruction(Pillar II) efforts. Lakhdar Brahimi, Special Representative for the Secretary-General to Afghanistan,organized the Bonn Accord signed on December 5, 2001 and now directs UNAMA. (23) Currently, the international donor community has put great emphasis on "ownership" - meaning leadership and control - of reconstruction efforts by the country itself. The Afghan government hastaken on an increasingly central role in reconstruction planning and the management of aid funds. In February 2002, the Afghan government established the Afghan Assistance Coordination Authority(AACA) that interacts with donor coordination groups to regulate aid traffic and seeks to ensure thatthe aid provided supports some government programs and is not fragmented or subject to donorcompetition. AACA monitors aid flows through a database - funded and provided by UNDP - thattracks donors, their pledges, and programs. (24) Thedatabase is considered to be about 70% accurate.The Afghan government has also developed its own priorities in its National DevelopmentFramework (NDF), which is going through further revision to become the National DevelopmentBudget (NDB) by March 2003. Consultative Groups are institutional mechanisms associated with the World Bank that provide more control to countries receiving assistance than the "Watching Brief" status because countryrepresentatives are members of consultative groups. On December 18, 2002, the ASG dissolveditself and turned over its responsibilities to the new Consultative Group based in Kabul and led byAfghan finance minister, Ashraf Ghani. (25) ThisConsultative Group will differ from the usual modelin that consultative Groups primarily focus on economic development, but the Afghan group willalso maintain an emphasis on humanitarian needs because of continuing serious humanitarianconcerns. (26) Donor Conference and Trust Funds. In addition to providing their own assistance to Afghanistan, international organizations and internationalfinancial institutions have administered donor conferences, trust funds, and humanitarian andreconstruction programs. With the Bonn accord and interim government in place, the UNDPorganized a donor conference, in which the interim government presented its reconstruction plansand country representatives and international NGOs made pledges in order to show internationalsupport for those plans. These pledges represent amounts that countries were willing to earmark forAfghanistan. At the first major donor conference, which took place in January 21-22, 2002 in Tokyo,the ITAP was presented and funds pledged. Sixty-one countries and twenty-one internationalorganizations pledged $1.8 billion for 2002. The U.S. government alone pledged $297 million, justunder 25% of total pledges. The cumulative total was $4.5 billion, with some states making pledgesover multiple years and commitments of different time frames. The next major donor conferenceis scheduled for March 2003, during which the Afghan government will present its NationalDevelopment Budget (NDB) and donors direct their pledges toward specific priorities in the NDB. (27) The international community has placed great emphasis on paying the Afghan government's current expenditures, most importantly the salaries of government employees, in order to build upgovernment capacity and sustain momentum. Towards this end, several trust funds have beenestablished. Trust funds allow for rapid distribution of monies because they remove theadministrative requirements of multiple funds. Donor countries decide to contribute to these trustfunds and urge others to make contributions. UNDP created the Afghan Interim Authority Fund(AIAF) for donor contributions to the first six months of governmental operations and other relatedactivities, mobilizing $65.8 million for immediate operating costs. AIAF paid the salaries of over100,000 civil servants in the first two months of the government, repairs of ministry and statebuildings, the operation of the Emergency Loya Jirga Commission, the provision of basic equipmentand vehicles for ministries, and the preparation work of experts for the establishment of a CivilService Commission. (28) On July 22, 2002, the Afghanistan Reconstruction Trust Fund (ARTF) succeeded the AIAF. ARTF provides funds for the government's budget, investment activities and programs includingquick-impact recovery projects, funding to support the participation of Afghan experts residingabroad, and training programs for Afghans. Contributions from donors to date have totaled some $95million, and over $200 million more is expected. (29) In addition, the Law and Order Trust Fund forAfghanistan (LOTFA) is beginning to cover the basic needs of the police in the Kabul region. UNDPmanages this fund in cooperation with the Afghan government and the UNAMA. Activities to becovered through LOTFA include the rehabilitation of police facilities, payment of salaries, trainingand capacity-building, and procurement of non-lethal equipment. The idea is that sufficientresources will be provided to this fund to allow funding activities to be expanded to other provincessoon. (30) Coordination Challenges. From decades of experience in Afghanistan, the international community has developed coordinating mechanisms andinstitutions, which have helped to move the reconstruction process forward. Coordination is animportant goal and, as has been demonstrated in previous conflicts, coordinated activities generallylead to fewer unintended consequences, quicker learning processes, and more effective results. (31) Theinstitutional networks have altered over time with UNAMA taking on the main coordinating role inMarch 2002. Some observers argue that the Afghan government, international organizations, NGOs, donor countries, and others are following their own priorities and programs, and are not coordinatedenough. (32) Some have suggested that completecoordination may be both unnecessary and ineffective,especially when different organizations do not share common goals or strategies. (33) For example, theUnited Nations, the United States, and others have supported regime change in Afghanistan, whichhas led to a specific strategy to bolster the regime change with reconstruction. For those inAfghanistan and the region who do not support this goal of regime change or for those who havebeen marginalized by regime change (such as former supporters of the Taliban regime), supposedlyneutral, non-partisan humanitarian assistance could appear partisan. Coordination is a complicatedmatter, but some would argue that there should be coordination only among like-mindedorganizations, such as among humanitarian groups, separate from the coordination of politicalgroups, and separate from the coordination of military oriented groups. (34) Areas of concern include whether the funding levels to Afghanistan are adequate and whether funding is being used for reconstruction. The Afghan government's donor assistance database,which keeps track of aid flows, provides a picture of international funding levels. (For a list of thefunds committed and disbursed by country, see the appendix of this report.) It should be recognizedthat these numbers are self-reported by countries, may include double counting (such as countrypledges that flow through U.N. organizations), and may cover non-monetary items (such as food aidor donation of used goods). In addition, some new projects have not yet been included, such as aroad project proposed by Iran. Donor countries have committed $1.7 billion and, from that, disbursed $1.5 billion. The top donor countries (in descending order by funds committed) are as follows: the United States,European Commission, Japan, Germany, United Kingdom, Saudi Arabia, the Netherlands, Italy,France, and China. (35) Pledge Fulfillment Problems. With donor countries committing $1.7 billion and disbursing $1.5 billion, the numbers approach the $1.8 billionpledged at the donor conference in Tokyo in January 2002. Throughout the year, however, theAfghan government expressed disappointment and even exasperation for delays in the delivery offunds that slowed reconstruction and, therefore, undermined popular support of the government.According to the Afghan government, as of October 11, 2002, about 67% of the pledges had beendisbursed. (36) Some of these delays could beexplained by the donor countries' need to obtainCongressional or Parliamentary support and appropriations for funds, which takes time. Yet, effortshave been needed to make certain countries deliver their pledges. In addition, some countries havechanged their pledges. For example, for the Kabul-Kandahar-Herat road project, Saudi Arabia haschanged its $50 million pledge to a $30 million low-interest loan. (37) In response to Afghangovernment requests, the U.S. Defense Department and State Department have assigned seniorofficials to raise money from other countries for reconstruction, particularly for the training,equipping, and housing of the Afghan national army. Two of these senior officials went to thePersian Gulf to fund-raise and obtained several new pledges. (38) Questions about Funding Levels. Despite the seemingly large pledges, many observers have argued that even the pledged amounts are notadequate. According to the preliminary needs assessment presented in January 2002 by the UNDP,the World Bank, and the Asian Development Bank (ADB), Afghanistan would need $15 billion overthe next 10 years. (39) U.S. Secretary of State ColinPowell stated that Afghanistan would need $8billion over the next five years. (40) The Afghangovernment, however, seeks much more money andresources for reconstruction, arguing that 23 years of war necessitates increased funds. The Afghangovernment seeks $22 billion over the next decade and $45 billion over twenty years. (41) Donorcountries at the Tokyo conference pledged around $4.5 billion, about one third of theUNDP-WB-ADB $15 billion estimate, though the $1.8 billion pledge for the first year met theestimated levels. The U.N. Secretary-General has criticized these pledging levels: "the [Afghan]Government, regrettably, remains very much under-resourced. The total needs of a countryrecovering from over two decades of conflict, destruction and drought outstrip even the $1.8 billiongenerously pledged at the donor conference held in Tokyo on 21 and 22 January 2002." (42) In sum,the long-term funds pledged have not reached the amount deemed necessary by the UNDP, WorldBank, and ADB. Observers also have found that, in comparison with other countries, Afghanistan has received smaller pledges and less funding. The pledges calculated as per capita annual allocations are farsmaller in Afghanistan than in many other post-conflict situations - $42 for Afghanistan, versus$195 for East Timor, $288 for Kosovo and $326 for Bosnia. (43) As part of this funding, the numbersof peacekeepers have also been comparatively low. The number of people per peacekeeper has beenin Kosovo 48 people, in Bosnia 58 people, in Sierra Leone 304 people, and in Afghanistan 5,380people. (44) Making Reconstruction a Funding Priority. The Afghan government has particularly complained that donors have not provided adequate funding forreconstruction. The overwhelming majority of U.S. funding dedicated to Afghanistan has gone toDOD's spending for the war against the Taliban and al Qaeda and DOD's continued activities. ForFY2002, the amount is $12.595 billion. (45) Thattotal is about 24 times greater than the $531 millionthat the U.S. government spent in FY2002 on humanitarian and reconstruction assistance. (46) The Pentagon has indicated that some troops are now aiding in road construction and other reconstruction projects as well as performing their normal duties. The $6.1 billion that DODreceived for Afghanistan and the global war on terrorism in H.J. Res 2, P.L. 108-7 , the FY2003Consolidated Appropriations Resolution, covers DOD's continuing costs of deploying forces inAfghanistan and heightening security in the United States in the first quarter of FY2003. In non-military assistance, most funding - some say 70% of FY2002 funds - went towards humanitarian aid-usually considered urgent food, shelter, and medical care. (47) The majority of thisassistance was food aid, which is essential for humanitarian crises but, according to experts, isproblematic in the longer term for reconstruction. According to this view, food aid in anon-emergency situation undercuts market prices for food and decreases the incentive for agriculturalproduction. (48) In addition, the Afghan government argues for a different process of funding. Since humanitarian aid generally moves through the United Nations and non-governmental organizations,the Afghan government does not have access to these funds or control over how they are distributed. Moreover, it cannot use these funds to increase capacity building in the government and thereforecannot demonstrate government effectiveness to the Afghan population. FY2001 Appropriations. The United States has long been the major donor and contributor to the Afghan people. According to USAID, duringFY2001 the U.S. government provided $184.3 million in humanitarian assistance to Afghanistan. FY2002 Appropriations. On October 4, 2001, President Bush announced an initial U.S. commitment of $320 million in humanitarian assistanceto Afghans both inside and outside Afghanistan's borders. Multiple U.S. agencies are providingsome form of humanitarian and reconstruction assistance, which cover a wide variety of aid,services, and projects. Overall, the United States provided over $530 million in FY2002 Afghanhumanitarian assistance directly through government agencies or as a result of grants to internationalorganizations and NGOs, a total above the original commitment of $320 million. At the first major donor conference held in Tokyo in January 2002, donor countries and other organizations pledged a total of $1.8 billion for 2002. The cumulative total pledged at Tokyo was4.5 billion with some states making pledges over multiple years and commitment of different timeframes. The U.S. government pledged $297 million, funds which were drawn from existing sources- either from the $40 billion Emergency Terrorism Response supplemental ( P.L. 107-38 ) that waspassed shortly after the September 11, 2001 attacks (49) or from regular FY2002 appropriations, P.L.107-115 , passed on January 10, 2002. FY2002 Supplemental Appropriations. Both the House and the Senate proposed higher aid levels for Afghanistan reconstruction and security fundingthan the President's FY2002 $250 million Emergency Supplemental request. The FY2002Supplemental ( P.L. 107-206 , H.R. 4775 ) did not set a specific amount for Afghanistan,but it appears that amounts for economic, humanitarian, and security aid intended by Congresstotaled $304 million. Because of an executive-legislative dispute over "contingent emergency" fundsin the Supplemental Appropriation, including some money for Afghanistan, not all of the amountintended by Congress was available. In September 2002, the Administration allocated $258 millionfor Afghanistan, slightly above the requested level, but below the amount assumed by Congress. This assistance is in addition to the $297 million in FY2002 funding previously allocated. FY2003 Appropriations. No figures were provided in the Administration's request for Afghanistan for FY2003, although the Administrationtold Congress that its request included about $140 million, $98 million of which would come fromForeign Operations appropriations accounts. On September 12, 2002, the Administration pledgedan additional $80 million for road reconstruction through USAID. The Senate version of the FY2003 foreign aid appropriations ( S. 2779 , S.Rept. 107-219 ) recommended a slightly higher level, $157 million for Afghanistan, and the House version( H.R. 5410 ) recommended almost double the request, $295.5 million. Recentindications by the Pentagon of a likely shift in strategy in Afghanistan, where troops will assist withinitial reconstruction projects, raise the possibility of additional funds being made available throughthe Department of Defense. However, both House ( H.R. 5410 ) and Senate( S. 2779 ) Foreign Operations bills, as reported in 2002, expired with the end of the 107thCongress. On January 23, 2003, the Senate adopted a revised FY2003 Foreign Operations measure as part of H.J.Res. 2 , a continuing appropriation bill to which the Senate had added full textof the 11 funding measures that had not been enacted for that fiscal year. The new bill was similar,but modified in several ways what the Senate Appropriation Committee had reported last year in S. 2779 . H.J.Res. 2 recommended $220 million for Afghanistan, morethan double what the Administration had assumed in its request and $63 million higher than theSenate bill in the 107th Congress. The Senate measure further included several provisionsemphasizing the needs of Afghan women and children by earmarking as much as $75 million of thetotal for these groups. The House bill from the 107th Congress ( H.R. 5410 ) hadrecommended $295.5 million for Afghanistan, nearly triple the Administration's request. In H.J.Res.2, P.L. 108-7 , the FY2003 Consolidated Appropriations Resolution, $295.5 million wasappropriated for humanitarian and reconstruction assistance in Afghanistan. Other Legislation. There have been several authorizing bills. The Afghan Women and Children Relief Act of 2001 ( P.L. 107-081 ) is legislationsigned into law on December 12, 2001 to authorize the provision of educational and health careassistance to the women and children of Afghanistan. No specific amount was authorized. (50) The Afghanistan Freedom Support Act of 2002 ( P.L. 107-327 , S. 2712 ), passed by Congress on November 15, 2002 and signed by the President on December 4, 2002, authorizesan additional $3.3 billion for Afghanistan over four years. Included is $2 billion for humanitarian,reconstruction, and enterprise fund assistance through FY2006 and $300 million in drawdown fromU.S. military stocks of defense articles and equipment for Afghanistan and other countries andorganizations participating in restoring Afghan security. The legislation also includes a Sense ofCongress that calls for an expanded ISAF with an authorization of an additional $1 billion over twoyears. The Afghan government and the international community are seeking to move more quicklyto reconstruction. As already stated, reconstruction must cope with the destruction of 23 years of warand with the distortions in the Afghan economy, in which the war and drugs compete to thedetriment of agriculture and other economic activities. The Afghan government faces a dauntingtask. Reconstruction is seen as the single most important factor in sustaining peace. (51) According tomany observers, successful reconstruction will stop disillusionment with the new system inAfghanistan and will keep Afghanistan from again becoming a haven for terrorists. It is importantto remember that, while Afghans signed the Bonn Accord in December 2001, Afghanistan is still ina crucial peace-building stage. Some point out that the collapse of law and order in the 1990s wasa key factor behind the Taliban's military successes in subsequent years. (52) Quick-impact programs (with a time frame of four to six months) initiated the post-emergency transition toward reconstruction and constituted the initial part of more long-term programs ineducation, health, poppy eradication, and other areas. These projects also provide an important basisfor further reconstruction. (53) Numeroussmall-scale and some large longer-term, mostly road, projectsare underway. There are several issues of concern for the international community, the Afghan government, and observers beyond the funding challenges discussed above. First, the lack of security hasthreatened the progress of reconstruction. Second, not much obvious progress has been made onreconstruction because there have been many small programs and few large programs. Accordingto some observers, Afghans have become frustrated with what they perceive as little evidence ofreconstruction. There are many possible explanations for the perceived lack of progress: lack ofsecurity, lack of human and physical capacity to implement substantial reconstruction, inadequatefunding levels, and funding predominately going towards the continuing humanitarian crisis andtowards the administrative costs of the international donor community, rather than towardsreconstruction projects. Both security and progress on reconstruction are necessary in order tomaintain international donor interest in Afghan reconstruction, encourage private investment inAfghanistan, and maintain Afghans' hope in improvement in their country and their own lives. The goals of the reconstruction process are broad and abstract. These goals cover recovery, reconstruction, and development. The international community and the Afghan government havesought to establish priorities. The international community initially divided up the reconstructioneffort so that each donor country was the lead for specific project areas. Table 1 shows thedistribution of the reconstruction effort. Table 1. Lead Countries by Sector In 2002, the Afghan government has established its national priorities in the National Development Framework (NDF) and other documents. These priorities are as follows: 1. National Solidarity Program and Emergency Public Works Program 2. Education Infrastructure Program 3. Urban Infrastructure Program 4. Water Resource Investment Program 5. National Governance Infrastructure Program: government building construction,transparency, and capacity building. 6. Transport Project: roads, bridges, and airports. (54) At the same time, the TAPA put together by UNDP and the Afghan government incorporated these priorities and added other programs. The TAPA is broader than the NDF, including funds forrefugee and IDP returns, culture and media, mine action, and narcotics control. Below there is adiscussion of most cited priority areas. Government Capacity Building. A representative national government that is considered legitimate by the majority of the population and that caneffectively provide services is considered an essential element of reconstruction in Afghanistan. Formany decades, Afghanistan has been a failed state. Critical to the strength and sustainability of thegovernment, Afghanistan established and continues to develop many national institutions, such asthe Loya Jirga , effective ministries, a Central Bank, and a national army. The international community has placed great emphasis on paying the Afghan government's current expenditures, most importantly the salaries of government employees. Towards this end,UNDP created the Afghan Interim Authority Fund (AIAF) and the Afghanistan Reconstruction TrustFund (ARTR), as well as the Law and Order Trust Fund for Afghanistan (LOTFA). To develop andstrengthen government institutions, the international community has entered into partnerships withministries and organizations in the Afghan government in order to do capacity building and thustransfer needed skills and knowledge. The Bonn Agreement also mandates the establishment of anumber of commissions to create new institutions in the government and implement major reformsof existing institutions. These commissions include a Human Rights Commission, a JudicialCommission, a Constitutional Drafting Commission, a Defense Commission, and numerous othercommissions. (55) The United States is giving $5million to help facilitate the work of thesecommissions. (56) U.N. High Commissioner forHuman Rights (UNHCHR) and international donorshave sought to strengthen the Human Rights Commission so that it can implement an effectivehuman rights program, which would include investigating past and present abuses, educating thepublic about human rights, and training Afghans in the principles of international human rights law. (57) As the lead country in army training, the United States has worked with other countries to provide training and assistance in the formation of the ANA. The plans are for an army of 70,000soldiers, and as of January 9, 2003, the U.S. and other forces had trained and equipped fourbattalions with 1,600 soldiers. (58) The U.S.government is also providing additional money formilitary infrastructure, including $16 million for barracks, dining facilities, and training areas. (59) On October 7, 2002, the Central Bank of Afghanistan introduced its new currency, the Afghani, in the hopes of stabilizing prices and exchange rates. The new notes were printed in Germany. (60) TheUnited States has been the primary donor in the currency conversion process, providing technicalexpertise, equipment, transportation for delivery of currency, monitors to ensure the destruction ofold notes, and other activities. The Central Bank has had to extend the currency exchange periodand continues to exchange and destroy old notes. The United States is providing $3.3 million tocover the costs of this extended exchange period. (61) However, the value of the Afghani has beenunstable. At least as of late November, the value of the Afghani had plunged and caused consumerprices to rise sharply. (62) Women's Programs. U.S.-funded projects emphasize women's participation in general, and some also benefit women's programs specifically,such as refugee care and resettlement, health, and job training. (63) Overall, the situation for womenin Afghanistan has seen improvement since the fall of the Taliban, but a great deal needs to be doneto change the basic standard of living and means of livelihood for the average Afghan woman. Thisinvolves a wide range of issues, from education, family care, and health to participation in thepolitical process. (64) With regard to reconstruction in FY2002, USAID announced two grants totaling $64,000 to support the refurbishing of the Ministry of Women's affairs building and to provide the then AfghanWomen's Affairs Minister, Sima Samar, with basic office equipment, a vehicle, phone and otherstart-up capital. Coordinated through its implementing partner, the International Organization forMigration (IOM), the project has two goals: to rehabilitate the building complex and to providetechnical advisors to help establish operations and programs. In the FY2002 Emergency Supplemental ( P.L. 107-206 , H.R. 4775 ), $2.5 million was appropriated from ESF funds to support the construction of women's resource centers. (65) Theplan is to establish one center in each of Kabul's districts with a long-term goal of building one ineach of Afghanistan's 32 provinces. These centers are to provide a range of training and otherinitiatives focused on women, including health and education. (66) The FY2002 EmergencySupplemental also allocated $1.6 million to the State Department in support of the U.S.-AfghanWomen's Council, which focuses on programing and implementation of projects at the women'scenters mentioned above. Established in January 2002, the Council draws on leaders from business,government, and the media in both the United States and Afghanistan who work together to facilitatepublic-private partnerships between the two countries, to develop resources, and to provideopportunities for the participation of women in the rebuilding of Afghanistan. In The Afghanistan Freedom Support Act of 2002 ( P.L. 107-327 ), $15 million is authorized "to be appropriated to the President to be made available to the Afghan Minister of Women's Affairs." No specific figures for women's programs in Afghanistan were provided in the Administration'sbudget request for FY2003. The Senate measure (revised FY2003 Foreign Operations measure aspart of H.J.Res. 2 ) included several provisions emphasizing the needs of Afghan womenand children by earmarking as much as $75 million of the total for these groups. (67) In H.J.Res. 2 , P.L. 108-7 , the FY2003 Consolidated Appropriations Resolution, $5 millionwas earmarked from the Economic Support Fund for the Afghan Ministry of Women's Affairs,including support for the establishment of women's centers in Afghanistan. Employment Generation. As many as 4 million refugees have not returned to Afghanistan. While lack of security partly explains this, Afghanistanalso lacks employment opportunities. Many Afghans have migrated to Iran because of the economicopportunities there. Some refugees in Pakistan near the Afghan border refuse to return because theyhave employment and jobs are scarce in Afghanistan. (68) According to Andrew Natsios, head of USAID, the largest employers in Afghanistan are the Afghan government and the U.N. Mine Action Center. (69) Beyond these employers, the rehabilitationof the agricultural sector could provide many Afghans with some form of livelihood. A rehabilitatedagricultural sector could offer not only much needed food and cash, but also employment fordemobilized fighters, returning refugees, and many others. This in turn could diminish theattractiveness of returning to war or drug production and strengthen the basis for peace-building. International organizations and NGOs have been providing both food-for-work and cash-for-work programs to reconstruct Afghanistan and to provide resources to Afghans. Many arenow calling for a focus only on cash-for-work programs because these programs do not underminelocal agricultural prices. The Afghan government and others are calling for a mass cash-for-workprogram to combat both the high levels of unemployment and the "cash famine." (70) Road Construction. Road and bridge construction, as well road clearing, particularly during the winter snows, have been another majoremployment area for Afghans. Such infrastructural work is also important for the Afghan economyand the extension of the Afghan government across the nation. Afghanistan lies at the intersectionof historic trade routes connecting Central Asia, the Middle East, Pakistan, India, and China.Transportation has long been an important revenue creator for Afghanistan. After years of civil war,major roads are now a focus of reconstruction work. The United States, Saudi Arabia, and Japan have funded the reconstruction of the major Kabul-Kandahar-Herat road, which was originally built by the United States and the Soviet Unionin the 1960s. While Japan and Saudi Arabia are providing $50 million each, the United States hasprovided $80 million, making it the United States' largest single aid project in Afghanistan since theanti-Taliban war. Reconstruction of this road began on November 10, 2002 and is expected to becompleted in three years. (71) The Russians helpedrebuild the Salang Tunnel, connecting Kabul withNorthern Afghanistan and on to Central Asia, while the United States is providing $1.6 million tokeep it open during the winter. Recently, Iran announced it will fund and oversee the reconstructionof a 62-mile road from Herat to the Iranian border. (72) The European Commission, the Swedishgovernment, and Pakistan have begun emergency rehabilitation of the Kabul-Jalalabad-Torkhamroad in Eastern Afghanistan, and full construction will start next year. (73) Other road construction, aswell as bridge construction, is taking part in different areas of the country. Agricultural Rehabilitation. Rehabilitation of theagricultural sector is one key element in the reorientation of the Afghan economy away from the warand drug economies. In the past, Afghanistan has demonstrated the ability to be not onlyagriculturally self-sufficient, but also an agricultural exporter. As of 1978, Afghanistan was largelyself-sufficient in food and was a significant exporter of agricultural products, especially high-qualityfruit, silk, cotton, and other products. Wheat is grown in every region. Fruit trees (such as apricots,almonds, and walnuts) and grapevines were almost universally found as recently as 2001. Differentregions produce a variety of crops: corn, barley, rice, cotton, beans, onions, potatoes, sugarcane, andvegetables. In 1997-1998, Afghanistan was 70 percent self-sufficient in cereals. Beginning in 1998,however, a severe drought hit Afghanistan. The drought has now lessened in a few regions, andagricultural production has increased there, but the consequences of the successive years of droughtpersist and, in many regions, the drought itself continues. The drought and decades of war havemade self-sufficiency and export production a longer-term goal requiring substantial resources forcrop substitution and the rehabilitation of agricultural production. One significant and complicated issue is the drug economy. The British government is the lead in this area and focuses on eradication of poppy and on the training of eradication officers. The U.S.government has emphasized providing incentives for alternative forms of agricultural production,such as cotton and grape farming. However, aggressive poppy eradication programs couldexacerbate political tensions (by terminating essential cash income for large segments of thepopulation, including powerful vested interests) and precipitate new armed internal conflicts. (74) Therefore, drug eradication programs raises significant security concerns as well. To facilitate agricultural production, it is generally accepted that Afghan farming needs substantial infrastructural reconstruction. In addition to road construction and poppy eradicationprograms, the agricultural sector would benefit from: Water Access. Lack of water is the most serious obstacle to agricultural production. The irrigation systems need to be reconstructed by drilling wells, rebuilding localirrigation systems, canals, and reservoirs, and promoting water conservation. De-mining. Land mines remain a huge problem throughout Afghanistan. Afghanistan is believed to have one of the worst mine and unexploded ordnance problems in theworld, with 5-7 million still littered about the country. Some say it will take 12 more years andanother $500 million to remove most of the mines. (75) With over 80% of the Afghan populationrelying on agriculture for its livelihood, this is a substantial obstacle not only to refugee and IDPreturns, but to the basic recovery and reconstruction plans as well. Farming Resources. Afghan farmers need the means to farm: seeds, new trees to replace those killed by drought, fertilizer, and livestock. USAID has recently funded theimplementation of Famine Early Warning System (FEWS) in Afghanistan, which has long been usedin other regions, monitoring drought and famine conditions. Debt Relief. In order to survive the twin devastations of war and drought,farmers and others accumulated substantial debt. (76) With opium as a significant cash crop distortingthe rest of the agricultural economy, farmers need credit and loans to buy seeds, trees, and otheritems to survive and work outside the drug economy. Urban Reconstruction. The overwhelming majority of refugees and IDPs are returning to Kabul and other major cities because much of thehumanitarian and reconstruction resources are there. This urbanization trend has resulted in an acutehousing shortage and the need to invest in basic services, including water, sanitation, and power. Adding to this problem, the international aid community in Afghanistan has enabled an artificialeconomy to flourish by increasing housing rents, reducing availability, and thus making the currentsituation even more difficult. Energy. As of spring 2002, seventy percent of Afghanistan's power was hydroelectric, but the long-term drought has meant that hydroelectricplants have been running at less than full capacity. In addition, years of war significantly damagedthe power network. To provide energy to the country, the Afghan government has recently signedagreements with its neighbors to connect its power grids with those of Turkmenistan andUzbekistan. (77) USAID, ECHO, and IOM have alsoprovided money for a coal mining and distributionprogram. Furthermore, Turkmenistan, Pakistan, and Afghanistan have signed an agreement to builda $3.2 billion natural gas pipeline through Afghanistan. Education. An initial effort in the area of primary education has been the Back-to-School Campaign run by the United Nations Children's Fund(UNICEF). In March 2002, the Afghan schools officially opened. UNICEF's goal was to help 1.78million children return to school, but, according to UNICEF, up to three times that number may havereturned. (78) This Campaign has provided Afghanschools with essential materials, includingtextbooks, blackboards, pencils, notebooks, teaching aids, tents for use as makeshift classrooms, andother teaching and learning materials. USAID provided 10.6 million textbooks at a cost of $7.75million, as well as support for the airlift of these textbooks to Afghanistan at a cost of $742,000. TheState Department also contributed $2 million to the Back-to-School Campaign. While there have been many successes in primary education, other areas have received less attention and funds. For the further expansion of the primary school system, more teachers areneeded. In response to this, the World Bank has been funding tertiary education, especially theteaching of teachers. In addition, secondary education is in need of further funding. Health. Inoculations and basic medical care have helped improve living standards in Afghanistan. For example, nearly six million children have beenimmunized against polio through a program conducted by the Afghan Ministry of Public Health,WHO, and UNICEF. Over four million children have been immunized against measles. Moredirectly related to reconstruction is building the health care capacity in rural areas and therehabilitation of hospitals and clinics. Many hospitals and hundreds of clinics have beenrehabilitated, especially in Kabul. With these areas receiving funding from many sources, USAIDhas turned to rural health care, including the training of midwives and planned construction andrehabilitation of up to 600 primary health care facilities. Communications and Media. A key component of the coordination of reconstruction and the everyday function of the Afghan government iscommunication. Afghanistan relies on cell phone service - which works best in major cities and isprovided through a partnership of the Afghan government and a New Jersey-based company - andsatellite phones. Telecommunications is a sector attracting private foreign investment. (79) Considering radio an important way to connect the country, the United States has taken the lead theradio sector and provided technical and financial support to Radio Afghanistan. As the lead in thetelevision sector, Japan has helped rebuild a television station and supplied technical support andequipment for satellite broadcasting of the Emergency Loya Jirga throughout Afghanistan. What should be the goals of reconstruction in Afghanistan where humanitarian assistance, reconstruction, and development initiatives overlap? Not only did Afghanistan experience a decadeslong war, it also was a developing country before the war. Therefore, reconstruction anddevelopment blend in the case of Afghanistan. There are several issues that Congress couldconsider. For the United States, is the goal merely "aid-induced pacification" (giving funds toAfghanistan in order to pacify the population and reduce possible security threats fromAfghanistan)? (80) Or is the goal some form ofdevelopment, providing incentives for livelihoodsoutside the drug and war economies? How much development should the United States fund underthe aegis of reconstruction, leaving other areas to formal development agencies like UNDP? In addition to the Administration, some in Congress have talked about developing a Marshall Plan for Afghanistan. So far the calls for a Marshall Plan seems to mean only a sustained, long-termcommitment to reconstruction, which in the case of Afghanistan, includes nation building. TheMarshall Plan for Europe was substantially different from what is evident in Afghanistan. First, theEuropean Marshall Plan would have been $103 billion in today's money spread out over four years,which is much more than the amount currently provided by the United States, even including themilitary assistance. Second, the European Marshall Plan was also a regional strategy for WesternEurope, as opposed to a national strategy. Third, Afghanistan is much less developed than WesternEurope was at the time, which means that reconstruction will entail much more development. Senator Biden proposed a kind of Marshall Plan for Central and South Asia, providing a regional approach to Afghan reconstruction and drawing in its neighbors. (81) Afghanistan's neighbors andother countries have repeatedly supported the decades-long civil war. Pakistan, Iran, Russia, theCentral Asian countries, India, and the United States sought to influence the war's outcome. Fromexperiences in other similar situations in Rwanda, Somalia, and Kosovo, scholars have argued thatpeace processes are most threatened in countries with intervening neighbors. As a result, thesescholars have argued for reconstruction efforts in Afghanistan to be coordinated with relevantofficials in neighboring countries, so that conflicting programs do not provide opposing incentivesand negative consequences. The Congress took steps in this direction with the Afghanistan andCentral Asian Republics Sustainable Food Production Trust Fund Act of 2001 ( H.R. 3566 ), but the last action on this bill was in January 2002 when it was referred to the HouseSubcommittee on International Monetary Policy and Trade. Furthermore, on December 22, 2002,Afghanistan and its six neighbors signed the Kabul Declaration on Good Neighborly Relations, anon-aggression pact. (82) Security is a top priority in Afghanistan. Plans for the U.S. military to be a part of provincial reconstruction teams stands in contrast to the sense of Congress put forth in the AfghanistanFreedom Support Act, which calls for the expansion of ISAF. With the provincial reconstructionteams now being put together, how does Congress view ISAF? Demobilization of local militia could be further encouraged through employment generation programs. These programs could also provide incentives for economic activities beyond the drugand war economies. Employment generation is also a priority area for the Afghan government. (83) The Afghan government and others are calling for a mass cash-for-work program to combat both thehigh levels of unemployment and the "cash famine." (84) This mass program might resemble the U.S.Civilian Conservation Corps, established in the 1930s to cope with unemployment from the GreatDepression. It employed about three million young men to work full-time for cash on a variety ofprojects. (85) The contribution of food aid by the United States and other countries is also an issue for Congress. On the one hand, food aid can undermine market prices and provide disincentives foragricultural production and thus some parts of reconstruction. Other forms of assistance, such ascash-for-work programs, could help Afghanistan reduce its dependence on international assistance. On the other hand, food aid and humanitarian assistance are considered essential in some parts ofAfghanistan. The form of assistance is a significant issue for Congress. In March 2003, the next major donor conference for Afghanistan will take place. The pledges at the first donor conference in Tokyo in January 2002 nearly met the first year needs assessmentconducted by the World Bank, UNDP, and ADB. However, these pledges were primarily used forhumanitarian assistance. Furthermore, reconstruction is just now slowly beginning, and there isconcern about maintaining donor interest in Afghan reconstruction. Therefore, the pledges at theMarch conference are particularly important. In regard to U.S. funding, the Administration's request for FY2004 for Afghanistan totals $531 million, not including disaster assistance. (86) Somemembers of Congress believe the amounts shouldbe greater with fewer constraints. The Afghanistan Freedom Support Act of 2002 ( P.L. 107-327 )authorizes $3.3 billion over four years. In addition, if a Marshall Plan were to be planned forAfghanistan, then much more money is likely to be necessary. In any case, the amount of the U.S.contribution, and the framework under which it will be provided, remain key questions for Congress. In addition to concerns about the necessary U.S. aid levels, Congress and others have been concerned about burden sharing. The donor conferences have often not produced the necessaryamounts of funds in a timely manner. Late in 2002, the United States had to play a role infundraising. What level of funding should the United States and other countries provide? Shouldother countries be encouraged to contribute more? How can interest in Afghanistan from the donorcommunity be sustained? Many inside and outside the Afghan government have criticized donors for not following through on their pledges. However, donor conferences in general exhibit problems, such as slowdisbursement of funds, weak mechanisms for pledging and mobilizing assistance, inadequate devicesfor tracking aid flows, inappropriate forms of aid conditionality, poor articulation between relief anddevelopment efforts, and weak coordination within the donor community. (87) Donors over-pledge,pledge already allocated funds, and slowly or never fulfill their pledges. In the case of Afghanistan,the international community has sought to avoid some of these problems, such as through thecreation of the AACA aid database, which has made pledging, tracking, and monitoring moretransparent. Whether donor conferences and trust funds are the best way to fund reconstruction hasbeen questioned by some observers who also ask if the United States should give more money to thetrust funds. If not, then other potential methods must be examined. As of this fall, the Pentagon announced that it was transforming its strategy from military to security and reconstruction goals. DOD has been providing humanitarian assistance to Afghanistansince OEF began, and it seems that this role in a reconstruction framework will increase. In general,militaries worldwide are increasingly providing such assistance because humanitarian agenciesincreasingly work in war-torn areas. However, many NGOs have argued that the provision ofhumanitarian assistance by militaries comes at a high cost. Military provision of this assistanceassociates humanitarian agencies and actors, as well as refugees and other victims, with militaryobjectives and activities, even with particular sides in the war. It is argued that this association mayput these agencies and actors in danger. On the other hand, security remains a key factor in thedistribution of aid itself and often requires a military presence for it to be effective. It would beuseful to examine the costs and benefits of the increased humanitarian programs conducted by DODin Afghanistan and elsewhere to understand better the impact of the military on non-militaryassistance programs. There is a consensus that Afghanistan requires long-term international attention in order to receive adequate donor funds, have successful reconstruction, and avoid another civil war. Someargue that Afghanistan's situation is precarious. However, discussions and attention have turned toIraq with the possibility of war there. While a war in Iraq is projected to cost many billions ofdollars, President Bush has stated that the United States will continue to fund and organizereconstruction in Afghanistan. How will the Congress seek to reconcile these two costly programswith the rest of the foreign aid budget and the general budget? Some, including the internationalcommunity, have raised doubts about the U.S. commitment to Afghanistan as the United Statesfocuses on Iraq and visa versa. Can the United States manage maintain a central focus onAfghanistan at the same time that it takes on Iraq? Appendix - Afghanistan Assistance Donor Funds Committed andDisbursed by Country as of February 10, 2003 Source: AACA donor assistance database, Feb. 10, 2003, http://aacadad.undp.org . 

Summary: Afghanistan has taken the first step toward reconstruction. According to many observers, the most serious challenge facing Afghans and Afghanistan today remains the lack of security. Mostexperts agree on the need for substantial, long-term reconstruction with international support, butquestions are raised about the funds required, the priorities, and the coordination necessary for thisprocess. This report examines U.S. foreign aid to Afghanistan in the context of the internationaleffort and explores the major issues for Congress. As a result of decades of violent conflict, Afghanistan is in great need of substantial reconstruction, from roads and schools to a broad range of development projects encompassing thewhole country. Decades of civil war and proxy regional wars have created four intertwining andcompeting economies in Afghanistan revolving around war, drugs, agriculture, and humanitarian aidthat drive conflicting incentives for Afghans and their neighbors. Effective reconstruction assistancecould reconfigure these economies and provide incentives for viable economic growth. The international recovery and reconstruction effort in Afghanistan is immense and complicated, with the Afghan government, numerous U.N. agencies, bilateral donors, manyinternational organizations, and countless non-governmental organizations (NGOs) working to helpAfghanistan. The international community and the Afghan government have sought to establishcoordinating institutions and a common set of goals in order to utilize donor funds most effectively. Officially, international assistance is coordinated through the United Nations Assistance Mission inAfghanistan (UNAMA), though there are other coordinating institutions tied to the Afghangovernment. Donor countries have committed $1.7 billion and, from that, disbursed $1.5 billion. Key areas of concern include whether the funding levels to Afghanistan are adequate and how much is beingused for reconstruction. Some have argued that the majority of FY2002 funds-as much as 70%-went towards humanitarian aid. The next major donor conference for Afghanistan will take place in March 2003. Some of the major reconstruction programs are government capacity building, women's programs, employmentgeneration, road construction, agricultural rehabilitation, urban reconstruction, energy, education,health, communications, and media. There is concern about creating enough momentum behindreconstruction initiatives in the short term and sustaining international focus on Afghanistan in thelong term, particularly in light of a possible war in Iraq. This report will be updated as eventswarrant.