Learning From Experience

Afghanistan stabilized after 9/11. Let’s get back to what was working.

Both candidates for the U.S. presidency pledged to make Afghanistan a top priority. The war there now tops the news on a daily basis with tales of the devastating hardships of the Afghan people and the deaths of Afghans and NATO soldiers. The untold story is that Afghanistan was well on its way to stability in 2004. It is essential that President Obama understands why the nation slipped into chaos. The challenge now is to win the peace.

After 9/11, stability was created through a partnership between the Afghan people and the international community. In December 2001, the Bonn Agreement laid out a political framework to allow increasing numbers of Afghans to become participants and stakeholders in their country’s future, with a sequence of events set out in a clear timetable using mechanisms like the loya jirga—a national convention of Afghan representatives—that would be culturally familiar to Afghan citizens.

A group of Afghan leaders and managers was empowered to implement an economic reform agenda to complement the political process. It started with simple mechanisms such as putting in place a national currency. In 2001, there were at least three different currencies in circulation and millions of afghanis were required to buy a simple meal. The hawala dealers—the Afghan money changers—agreed with the government on a plan to change the currency, and before long a new currency was in use across the country. Afghanistan’s new Cabinet designed its first post-Taliban budget, working out how many policemen, doctors, teachers, and soldiers would be required to keep the peace and restore essential services, and it set out a vision for the future of the country in the “National Development Framework.” These leaders designed a transparent process to create a cell phone system where companies bid for licenses in return for a fair price to citizens and revenue to the government. The U.S. government made a risk guarantee available to investors. As a result, rather than the small numbers of satellite telephones that existed in 2001, there are now more than 5 million cell phones in the country, which have sent more than $1 billion in revenue to the government. They also designed a national health system that set standards for health care and contracted out basic services in partnership with nongovernmental organizations.

A system of good governance called the National Solidarity Program saw a block grant of roughly $20,000 allocated to thousands of villages across the country. Villagers could access the money if they followed three simple rules: elect a village council, have a quorum of the village meet to decide on projects, and then post accounts in a public place. The government hired NGOs to facilitate the process, but villagers decided how to use the money. This program is now operational in more than 22,000 villages across Afghanistan. Villagers participating in the program would often say that for the first time they felt like citizens, since someone was trusting them to make a decision. The leadership team also designed a ring road around the country to generate national unity and minimize geographical divisions. It set up a national public works program to create jobs. Finally, and perhaps most importantly, it set up a reliable funding mechanism to finance their budget—and hired international firms to provide treasury management, accounting, auditing, and procurement assistance.

This process was not perfect, and—since there were no guidebooks on how to do state-building—it required a fair degree of improvisation. Some national programs—most notably an energy program, an irrigation program, and an agriculture program—were designed but not implemented because of insufficient funding. But the main trajectory was forward, with centripetal forces bringing Afghans and their near and far neighbors around the same table to discuss the issues and forge consensus. By the end of 2004, the Bonn Agreement was completed, and Afghanistan seemed firmly on track, significantly improving its rating on Transparency International’s Corruption Perception Index. Suicide bombs were unheard of, and Afghans remained patient and hopeful.

I had the privilege to live and work in Afghanistan throughout this period. Two myths that many outsiders claim about Afghanistan have confounded me. One was that Afghans are naturally warlords, always have been, always will be. In fact, nearly all the Afghans I met craved law, order, justice, and fairness. From an old woman I met in Mazar-e-Sharif in January 2002 who demanded an accountable civil service, to the cheers in the loya jirga when it was announced that customs revenues would be properly administered, to my driver who would rather spend a night in jail than pay a 10-cent bribe to a policeman, the demand for accountability was overwhelming. I found a people of extraordinary intelligence and fair-mindedness, even after unimaginable sufferings, and, above all, a people yearning to be responsible participants in the global system. The second myth is that Afghanistan is naturally a poor country. Rather, and as the recent “Operation Rampant Lion” that mapped Afghanistan’s geology shows, Afghanistan is blessed with significant natural resources, including copper, iron, emeralds, and marble. The country once had a flourishing agricultural sector famous throughout the world for its fruit and nuts. It is situated at the crossroads of Asia and the Gulf. The potential for the country to be not only self-sufficient but prosperous is very real.

What went wrong? This is not the time for a detailed account, but some elementary mistakes are worth highlighting. First, not enough money was allocated to the government at its nascent and most critical stage. In 2001, Afghanistan had 240,000 civil servants who had served through decades of war. The donors, in their infinite wisdom, allotted more than $2 billion to their own agencies—the NGOs and U.N. agencies that then used the money to set up parallel organizations to the Afghan government—but provided a mere $20 million to fund the government’s entire budget for the first year. This sum barely covered fuel costs for a month, and as a result, the country’s leaders spent much of this period scrambling to pay doctors, teachers, and policemen their meager $50 per month salaries. Wages went unpaid, and, eventually, competent civil servants left their jobs in droves to take higher-paying positions in donor organizations, working as drivers, assistants, and translators. The government could not collect tax or customs duties since it did not have the means to control the borders and roads, which were held by militias that served as the proxy ground forces for military operations. The state coffers remained empty, and state functionality began to erode.

Second was a failure of the donors to realize that there are some functions of the state that Afghanistan, like any nation, needs to perform for itself. Initially, donors refused to fund programs to address good governance at the local level, such as to rebuild court houses, police stations, and administrative offices in the provinces and districts and to provide training and support to the Afghan officials staffing them. Donors rejected this plan, claiming that a government-buildings program to restore basic infrastructure that had been destroyed in the years of war was not “poverty-reducing”; that a district good-governance program might be “dangerous,” since the donors might not be able to reach all areas of the country to monitor; and that support for policing was outside their organizational mandates. The United States, Canada, and Great Britain did eventually step in to finance a district- and provincial-governance program, but only after two years had passed. The donors did eventually back the government’s plan in 2004, and they made significant pledges for the future, but by that point the open window was closing and the reform team had been dismantled. The donors then overcompensated by supporting the government unconditionally, failing to ask for accountability in the fair budgeting and allocation of resources.

Third, there was a near total failure to invest in building the Afghan skills base. Donors insisted that the Afghan government should put no money in secondary or tertiary education for their own citizens, citing the Millennium Development Goals and the importance of primary education. While the MDG are worthy targets, it is not very wise to neglect investment in the next generation of leaders, managers, and professionals—or even bricklayers, plumbers, and electricians—in a country like Afghanistan. As a result, Afghanistan’s youth remained forgotten and marginalized, yearning to contribute to their country’s future but without the skills to do so.

Fourth was the extreme dysfunctionality of the aid complex in Afghanistan. Thousands of small, disparate projects were planned and implemented. This haphazardness confused villagers who might see three wells in one village but none in the next. Donor dollars were “salami-sliced” by the aid system, often through as many as four or five contractual layers. Consider the costs of security, travel, housing, and translation, and it is no surprise that a small proportion of any grant ever reaches the ground. The aid agencies wrote proposals for their projects with great enthusiasm but paid scant attention to supply-chain management, the functioning of the civil service, or the realities of implementation. There has yet to be a public audit of the first $2.7 billion of donor projects in Afghanistan that the U.N. agencies raised money for after 9/11. These agencies failed to appreciate the most fundamental lesson of post-conflict reconstruction: As one of Europe’s top diplomats put it, generally it is not about what we do; it is about what they do.

Reaching an impasse, my colleagues and I went to look at other parts of the world in search of patterns of success and failure in state-building. Fixing Failed States—a book I co-authored with Ashraf Ghani, the architect of much of the 2001-05 transition—sets out that learning.

What does this mean for Afghanistan now? Since 2005, Afghanistan has plunged from 117 to 176 on Transparency International’s corruption ranking, one of the fastest declines in the index’s history. At the same time, the trust of Afghan citizens in their government has plummeted. If we take a step back and look to how countries transform themselves from poverty and conflict to stability, a basic principle rings loud and clear. A country is not stable until it has a functioning state that performs key functions for its citizens. And behind every successful transition are four factors: a leadership and management team with a long-term vision and commitment to building good governance based on the rule of law; a relentless focus by those leaders on what we call “national accountability systems”—putting in place the building blocks of transparent revenue raising, budgeting, procurement, accounting, and auditing; nurturing civil society, in particular by investing in skills and training of citizens within the country in question, who must be empowered to take the lead; and nurturing small- and medium-sized firms that will give people a stake in the system. With these basic ingredients, Afghanistan could be put on the path to stability.

Putting Afghanistan back on such a path will certainly require funding and expertise from outside, but in a different type of partnership based on joint commitment to rule of law and building an accountable state. The countries that transformed successfully all partnered with the aid system but with a clear vision for how best to use the money, with rights and responsibilities on both sides and clear recognition that domestic leadership was the critical factor. In the short term, resources and military commitments will be required for Afghanistan, but if good governance were restored, Afghanistan could be steadily raising its own revenue and meeting its own bills. A series of reinvigorated national programs managed and staffed by Afghans in partnership with development banks and experts would be far cheaper than the thousands of foreign-run projects. By supporting national programs in partnership with civil society, donors could shift their emphasis to creating a good governance system from the bottom up.

There is a whole range of organizations in the United States and across the world—from volunteer associations to land-grant colleges—that could partner with the effort at reasonable cost. New technologies, such as soil analysis of satellite imagery and using long-distance engineering and architecture support, could drastically reduce the costs of travel and security that are necessary when outsiders are on the ground; they could instead partner with Afghan engineers, architects, and agronomists at Afghanistan’s universities. Rather than sending in thousands of civilians, the shift in emphasis could be to training Afghans to do the jobs themselves. Afghanistan has just sold its large copper mine to China and can license more of its assets to raise money. And if investors—especially Afghans—had confidence in the future of the country, they would start financing the range of enterprises necessary to create jobs and supply domestic and regional markets with food, building materials, textiles, and minerals, and thereby grow the domestic tax base.

Sadly, it is not just Afghanistan that we need to worry about. There are as many as 60 countries that are facing a “sovereignty gap”—that is, a gap between the legitimate expectations of their citizens and their ability to deliver on those expectations. If we can demonstrate that a new type of partnership works in Afghanistan, we can provide hope around the world.