Tag Archives: SIGAR

Well, duh!

There are times when you read something so obvious that all you can say in response is ‘Well, duh!’ The sad thing, however, is that the blindingly obvious often isn’t so blindingly obvious to those who dispense our hard earned tax dollars. We need somebody to gather the evidence and prove the point so that people can’t ignore what they really ought to know anyway. So, thank goodness for John Sopko, the US Special Inspector General for Afghanistan Reconstruction (SIGAR), whose reports I have often featured on this blog. SIGAR’s latest report, entitled ‘Private Sector Development and Economic Growth: Lessons from the U.S. experience in Afghanistan’,  is now out, and below are some of the highlights:

— U.S. financial aid practices, at times, encouraged corruption, complicated the challenges of coordination within and between U.S. agencies, and kept non-viable Afghan enterprises afloat.

— The U.S. government and stakeholders failed to understand the relationships between corrupt strongmen and powerholders, and the speed at which Afghanistan could transition to a Western-style market economy.

— Senior technical experts often lack expertise in Afghanistan or even in post-conflict or developing economies, and were unable to provide effective guidance and support.

— The simple existence of laws and regulations is insufficient; it is how they are implemented by courts, government officials, and police that matters. Many laws introduced to promote economic activity were not accompanied by plans to build or modify the institutions needed to apply them, and Afghanistan’s weak judicial system left even the best-crafted laws vulnerable to manipulation.

— The U.S. government’s provision of direct financial support to enterprises sometimes created dependent, commercially nonviable entities, as well as disincentives for businesses to use local financial and technical services.

— Assistance provided to Afghan institutions and firms relied mainly on Western technocratic models that often failed to consider how powerful Afghan social groups and institutions influenced public policy and the functioning of markets.

— Due to a lack of understanding and uneven enforcement of market principles, the market economy was conflated with unfair competition, monopolization of markets by politically well-connected firms, unfair trade practices by regional neighbors, and administrative corruption.

— Rapid opening up to trade allowed Afghan consumers access to cheaper imported goods, but the opening of the country’s borders before Afghan goods were competitive with imports hurt domestic producers.

— Fear of government regulatory and tax-collecting institutions reinforced Afghan firms’ historical inclination to stay informal and small rather than risk expanding, hampering both government revenues and private investment.

Well, duh!  What amazes me is that anybody thought it might turn out any differently. Stripped down to its essence, the lessons here are:

  • Massive foreign aid produces corruption in the recipient country.
  • Aid encourages inefficient economic practices.
  • Formal institutions, such as laws, depend upon informal institutions, such as local customs and social structures.
  • Informal institutions in foreign countries like Afghanistan aren’t the same as in the West
  • Foreign advisors don’t understand these specificities.
  • Consequently, trying to turn those countries into copies of the West by slapping down Western institutions there and flooding them with Western advisors and money doesn’t work.

Well, duh!

None of this is particularly novel. SIGAR is to be thanked for drawing it once again to our attention. Sadly, I don’t get the impression that anybody in power is listening.

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Reinforcing failure

So, now we know what Donald Trump intends to do about Afghanistan. He intends to reinforce failure, sending additional troops to that country (believed to amount to 1,000 soldiers and 3,000 military contractors, although Trump didn’t specify)  in an effort to defeat the Taleban. Quite how this miniscule increase in military power is meant to achieve that objective isn’t at all clear, especially given that the United States was unable to achieve it when it had 10 times as many troops in Afghanistan. With Steve Bannon out of the White House, we are led to believe that national security policy is now in the hands of the ‘grown-ups’, serious military men like H.R. McMaster and James Mattis, who understand strategy. But reading Trump’s speech on the subject it’s hard to see any sign of strategy. It is, quite frankly, a confusing mess.

On the one hand, Trump declared that he intends to ‘win’ the war in Afghanistan. ‘We will always win’, he said. But how will the US win? By avoiding all that touchy-feely nation building stuff, allowing more permissive rules of engagement, and permitting the US military to kill more bad guys, Trump seemed to say. ‘We are not nation-building again. We are killing terrorists,’ he declared, adding that, ‘we will no longer use American might to construct democracies in faraway lands … Those days are now over.’ But how many more ‘terrorists’ is another 4,000 people going to manage to kill, and what’s to say that more of them won’t just pop up in their place? Trump doesn’t have an answer. Indeed, he contradicted himself by saying that, ‘Military power alone will not bring peace to Afghanistan or stop the terrorist threat arising in that country. But strategically applied force aims to create the conditions for a political process to achieve a lasting peace’.

Ah! So the aim isn’t after all to ‘win’, but to ‘create the conditions for a political process.’ But what is this process? Trump didn’t tell us, no doubt because he hasn’t got a clue what it might be. All he could say was:

Someday, after an effective military effort, perhaps it will be possible to have a political settlement that includes elements of the Taliban in Afghanistan, but nobody knows if or when that will ever happen.

So, the strategy is to use military power to create the conditions for a political settlement with the Taleban, even though it has so far utterly failed to achieve that, and even though ‘nobody knows if or when that will ever happen.’ And this is what constitutes ‘grown-up’ thinking? At the end of the day, Trump’s announcement amounts merely to a statement that withdrawing will bring untold disaster, and therefore we have to persist, because, well, you know, it will be bad if we don’t. There is nothing in this announcement which suggests how Trump or his advisors imagine that this war will end. They are as clueless as Obama and  Bush before them, and so are just carrying on doing the same thing over and over.

Why do they do this? The answer is that the financial costs of the war are dispersed over a vast number of people, so that nobody actually notices them, while the human costs are concentrated in a small segment of the population – the military – which the rest of the people can safely ignore (and at the current tempo of operations, the number of Americans dying in Afghanistan is quite low). Politically speaking, continuing the war is relatively cost-free. But should America withdraw, and something then goes wrong, Trump and those around him will be held to blame. It is better therefore to cover their backsides and keep things bubbling along as they are until the problem can be passed onto somebody else. This is a solution in terms of domestic politics, but it’s not a solution in terms of the actual problem.

By coincidence, today I got more news about Afghanistan, in the form of the latest missive from the Special Inspector General for Afghanistan Reconstruction (SIGAR). This relates to a review of ‘USAID-funded initiatives to implement an electronic payment system for the collection of customs duties in Afghanistan.’ Like most Western-backed initiatives in Afghanistan, this one (managed by the company Chemonics) hasn’t gone according to plan. According to SIGAR, ‘Chemonics and USAID significantly revised the revenue generation targets downward for the first three quarters of program year four because the program failed to achieve any of the revenue generation targets established for year three.’ Beyond that, says SIGAR:

As of December 2016, there was little evidence to show that the project would come anywhere close to achieving the 75 percent target, however, USAID and Chemonics have not altered project targets to account for the reality of the situation, and instead continue to invest in an endeavor that appears to have no chance of achieving its intended outcome. [my underlining]

That pretty much sums it up.

Why we’re losing

As I noted in a previous post, the failure of the United States and its allies in Afghanistan and elsewhere is in large part a product of a lack of strategic thinking. But there is more to it than that. While Western armies are excellent from a purely tactical point of view – i.e. they can drop bombs and fight engagements very efficiently – both they and their civilian counterparts are staggeringly incompetent in other respects. Even with the best possible strategy, they would still probably fail.

To understand why, I urge you all (as I have done before) to read the reports of the Special Inspector General for Afghanistan Reconstruction (SIGAR). Here is a summary of the latest.  And bear in mind that this is just one small example. The waste identified here has been repeated in scores and scores of other projects. When the history of this campaign is written, the scale of waste, incompetence, and corruption will boggle the mind.

If it weren’t so tragic, you’d have to laugh (OK, I confess that I did).

Can somebody explain to me how they think we can win this war?

— DOD’s [US Department of Defense’s] decision to procure ANA [Afghan National Army] uniforms using a proprietary camouflage pattern was not based on an evaluation of its appropriateness for the Afghan environment.

— Procurement costs to the U.S. government were 40–43 percent [higher] than similar non-proprietary patterned uniforms used by the Afghan National Police (ANP), which potentially added between $26.65 million and $28.23 million to the costs of the ANA uniform procurements since 2008.

— In 2007, responsible DOD officials stated that they “ran across [HyperStealth’s] web site and the Minister [then Minister of Defense Wardak] liked what he saw. He liked the woodland, urban, and temperate patterns.” {This is where I laughed – PR}

— CSTC-A, in consultation with the Afghan MOD, decided to adopt the camouflage pattern containing a “forest” color scheme for ANA uniforms, despite the fact that forests cover only 2.1 percent of Afghanistan’s total land area. {And laughed again – PR}

— Determining the effectiveness of a uniform pattern for a specific environment requires formal testing and evaluation.

— Acording to a technical paper prepared for the U.S. Marine Corps and U.S. Army, the spatial characteristics and color palette of a camouflage pattern should be tailored to the specific environment. Matching a camouflage pattern “with background texture, color, and contrast is essential to all levels of visual processing.”

— CSTC-A, however, made the decision to procure 1,364,602 ANA uniforms and 88,010 extra pairs of pants —totaling approximately $94 million—using HyperStealth’s Spec4ce Forest camouflage pattern without conducting any formal testing or evaluation.

— As a result, neither DOD nor the Afghan government knows whether the ANA uniform is appropriate to the Afghan environment, or whether it actually hinders their operations by providing a more clearly visible target to the enemy.

— CSTC-A recommended a sole-source award to HypersStealth but the DOD contracting office believed that, because there were so many available camouflage patterns in the world, a sole-source award would be hard to justify.

— Instead of issuing a sole-source award, DOD issued a local acquisition solicitation that included the requirement that the uniforms use HyperStealth’s proprietary Spec4ce Forest camouflage pattern.

— CSTC-A initially estimated that the new ANA uniform would cost $25–$30 per set. The actual cost ranged from $45.42–$80.39 per set.

— Our analysis found that changing the ANA uniform to a non-proprietary camouflage pattern could save U.S. taxpayers between $68.61 million and $72.21 million over the next 10 years.

— SIGAR suggests that DOD conduct a cost-benefit analysis of the current ANA uniform specification to determine whether there is a more effective alternative, considering both operational environment and cost, available.

 

Can-do attitude

For obvious reasons, military institutions like to have soldiers with a ‘can-do attitude’. When you tell your troops to do something, you don’t want them replying that it all looks a bit too difficult, and they’d rather not, thank you very much. You’d prefer to have people who regard difficulty as a challenge and strive to get the job done however impossible it may seem.

That’s all well and good, but sometimes the job is just plain wrong, and shouldn’t be done at all; or it just can’t be done, no matter how hard you try; or it can only be done at disproportionate cost. In such cases, what you need is not a can-do attitude, but somebody who will say ‘Sorry, boss, but this immoral/stupid/impossible, don’t do it.’

Continue reading Can-do attitude

Goats and boats

Several times in the past, I have drawn attention to the US Special Inspector General for Afghanistan Reconstruction (SIGAR), John Sopko, who audits the $117 billion the United States has spent on economic and humanitarian aid in Afghanistan. His reports are a catalogue of waste and incompetence on a quite staggering scale. Among other things, he uncovered the stories of how the US spent $6 million airlifting 9 Italian goats to Afganistan; spent $486 million buying aircraft for the Afghan airforce which were so dangerous to fly that they were never used and ended up being turned into $32,000 of scrap metal; built an entirely unused 64,000 square foot command centre at a cost of $34 million ; spent $150 million building luxury villas to lodge staff of its economic development office; and expended $3 million on building a navy for landlocked Afghanistan, but never actually delivered the boats. Unfortunately, these stories are just the tip of the iceberg, a small part of a chronicle of folly which boggles the mind.

I cannot recommend SIGAR’s reports enough to anybody wanting to understand why America’s campaign to stabilize Afghanistan (and by extension, many other places) is failing. Sopko is in some ways the storyteller of our time, reaching to the heart of the rot in the West’s international policy. Yesterday, he gave a public lecture at the University of Ottawa and provided a number of valuable insights. Below is a brief summary of what he said.

  • The situation in Afghanistan is not getting any better. Afghan security forces are ‘playing a deadly game of whack-a-mole’. They have little mobility or capacity for offensive operations. All they can do ‘is retake major areas after they fall’. They are ‘unable or unwilling to take the fight to the Taleban.’
  • The root of the problem is an ‘insidious combination of poor leadership and corruption.’
  • ‘The donor community contributed mightily to the corruption problem’ by putting in ‘too much money too fast in too small a country’ without considering local conditions. ‘The United States and other donor nations contributed enormously to the corruption explosion in Afghanistan.’
  • The Taleban have stopped providing supplies to many of their troops and instead told their commanders to buy the supplies from the Afghan army because it is cheaper! ‘Fully 50% of the fuel purchased for the Afghans never reaches the intended recipient.’ ‘At the end of the US supply chain in Afghanistan is the Taleban.’
  • ‘The US has spent $8.5 billion in Afghanistan to fight narcotics. Unfortunately, we have little to show for it.’ ‘Afghanistan is continuing to grow poppies at near record levels’, providing the Taleban with the majority of its revenues.
  • The Afghan state is not financially sustainable. Its revenue from domestic sources is a mere $2 billion a year, whereas it spends $4 billion a year on non-security expenditures and $4-6 billion on security. The difference comes from foreign donors. Meanwhile, the state lacks the capacity to manage large sums of money, and once that money is given to Afghans, it ‘becomes incredibly hard to follow’. ‘It may take decades for the Afghan government to achieve success and military and financial sustainability’. ‘Future prospects look bleak.’

Sopko concluded his lecture by saying that ‘It’s been amazing to me how little common sense has been used in our reconstruction effort’. ‘If we don’t change how we do things’, he said, ‘we will almost certainly fail in Afghanistan. … If we keep doing what we did the last 15 years, we’re going to get run over.’

Putting this all together, it seems to me that the basic problem is this:

To fight the Taleban, Western countries have created a huge Afghan military and security system, which is far beyond what Afghanistan can afford. Also, in an effort to bring ‘good governance’, economic development, human rights, and all the rest of it, in the hope that all this will contribute to defeating the insurgency, we have constructed an Afghan state with a large volume of social commitments which again it cannot afford. To make up the massive budget deficit, we have pumped billions of dollars into the country, thereby creating the conditions for corruption on a gigantic scale. This has then fatally undermined the legitimacy and competence of the state we are trying to support.

It’s a sort of vicious circle, or a Catch 22 situation. If we stop supporting the Afghan state, it will collapse. But supporting it on the scale it needs to survive pretty much guarantees that it will fail.

Sopko refused to make any policy recommendations, saying that as an auditor that’s not his job. Personally, I can’t listen to what he says or read his numerous reports, and feel any optimism that we are capable of finding a good way out of this mess. Frankly, we are way too incompetent. On the whole, rather than continuing to invest to recover sunken costs, it probably makes more sense to cut our losses and admit defeat.

Crackpot theory no. 7: hearts and minds

The great Prussian strategist Karl von Clausewitz remarked that, ‘Kind-hearted people might of course think there was some ingenious way to disarm or defeat an enemy without too much bloodshed, and might imagine this is the true goal of the art of war. Pleasant as it sounds, it is a fallacy that must be exposed: war is such a dangerous business that the mistakes which come from kindness are the very worst.’

For Clausewitz, the primary aim of war was the destruction of the enemy’s armed forces, and there was only one sure method of achieving this objective: combat. In recent years, however, Western military forces have attempted to do what Clausewitz warned against – defeat the enemy ‘without too much bloodshed’. Following the failure of initial counterinsurgency efforts in Iraq, counterinsurgency theorists convinced NATO leaders that the key to victory in Afghanistan  was a ‘whole of government’ approach. Military force would be combined with humanitarian aid and economic development projects, which would win the ‘hearts and minds’ of Aghans and persuade them to support the Afghan government and NATO rather than the Taliban. NATO would win not by killing people but by being nice to them.

How has this theory worked out in practice?

Not very well, is the answer.

John Sopko, Special Inspector General for Afghanistan Reconstruction (SIGAR), is responsible for auditing the $113 billion which the United States has spent on reconstruction in Afghanistan. Citing SIGAR’s new quarterly report to the US Congress, the latest update sent out by his office contains a particularly eye-popping statement:

Since 2003, USAID has spent at least $2.3 billion on stability programs in Afghanistan. The findings of a USAID-contracted, third-party evaluation program on the impacts of its stabilization projects raise worrying questions. The MISTI [Measuring Impacts of Stabilization Initiatives] program reported, for example, that villages receiving USAID stability projects scored lower on stability—an aggregate measure of whether the projects strengthened perceptions of good governance and effective service delivery—than similar villages that received no such assistance. And some villages reportedly under Taliban control that received USAID stability projects subsequently showed greater pro-Taliban support.

Why was this? According to SIGAR’s quarterly report, USAID says that raised expectations are to blame. Aid projects tend to raise villagers’ hopes of an improved quality of life. When their expectations ae not fully met, they become embittered.

There may be something to this explanation, but I’m not sure that it is the whole story. After all, it begs the question of why the projects fail to meet expectations. I would not be surprised if that is because the projects are often ill-conceived, disrupt existing practices and power structures, and are driven by perceived short-term security needs rather than the real requirements of local inhabitants.

SIGAR’s quarterly report [pages 118-120] also points to another factor. Apparently, USAID’s ‘Stability in Key Areas’ (SIKA) programs have improved ‘community cohesion, resiliency, and perceptions of local leaders’, but ‘at the expense of government officials’. Years ago, I heard complaints that in its haste to win ‘hearts and minds’, NATO was bypassing Afghan government institutions and officials (often deemed corrupt and/or incompetent), with the result that the aid was doing nothing to solve the fundamental problem of central government legitimacy which lay at the heart of the insurgency. These complaints may have been right.

SIGAR’s report suggests that ‘hearts and minds’ stability projects don’t win hearts and minds, but actually make matters worse. If confirmed, this finding is a terrible blow to counterinsurgency theory. The belief that one can win wars by building schools and digging wells has apparently turned out not to be true.

Making the soviets look good

I have mentioned before the reports issued by the Special Inspector General for Afghanistan Reconstruction (SIGAR), John Sopko, who is the official responsible for auditing the $110 billion which the United States has spent on aid to Afghanistan. They tell of enormous waste and few, if any, tangible benefits. The latest report is typically woeful.

According to SIGAR, the US Department of Defense (DoD) spent $43 million building a compressed natural gas (CNG) filling station in the city of Sheberghan. This was despite the fact that there is no demand for such stations in Afghanistan. Converting a car from petroleum to natural gas costs $700-800. The average annual income in Afghanistan is $690. SIGAR comments that, ‘the U.S. government paid for the conversion of over 120 Afghan vehicles to CNG so that they could use the filling station: ordinary Afghans simply couldn’t afford to do it. Not surprisingly, SIGAR found no evidence that any other vehicles were converted to CNG.’ The project, SIGAR concludes, ‘produced no discernable macroeconomic gains.’

That, however, is not even the worst of it. According to SIGAR, ‘a 2005 CNG station feasibility study conducted by Pakistan’s Small and Medium Enterprise Development Authority concluded that the total cost of building a CNG station in Pakistan would be approximately $306,000 at current exchange rates. In short, at $43 million, the TFBSO [Task Force for Business and Stability Operations] filling station cost 140 times as much as a CNG station in Pakistan. To date, DOD has been unable to provide documentation showing why the Sheberghan CNG station cost nearly $43 million.’

This story caught my attention because the Sheberghan gas field, which this project was meant to promote, was the product of aid provided by another great power, the Soviet Union, in the mid-1960s. As I described in my book Aiding Afghanistan, in 1963 the Soviets and Afghans signed an agreement for the development of the gas industry in Afghanistan, after which the Soviets provided funding, specialists, and equipment to start gas production at Sheberghan. By 1967, the gas field was up and running, and the Soviets built a 101-kilometre pipeline to transmit four billion cubic metres of gas a year from Sheberghan to the Soviet Union. In 1968, they also built a 88-kilometre pipeline to Mazar-i-Sharif to provide gas for the power station and fertilizer plant there. I haven’t been able to determine the exact cost of these projects, but between 1963 and 1968, the Soviets provided around 70 million rubles of credit to Afghanistan ($63 million at the then official exchange rate of 0.9 rubles to the dollar), so the cost must have been something less than that, given that the credits also covered other things. In other words, (ignoring inflation) for around the amount that the Americans spent on a worthless gas station, the Soviets constructed an entire gas production plant, two pipelines, a power plant, and a fertilizer factory.

All of these were profitable. By the mid-1970s, the Sheberghan gas field was bringing in annual profits of around 1.7 billion afghanis a year, while the Mazar-i-Sharif fertilizer plant was making profits of 70-100 million afghanis. In the 1980s, natural gas production provided the Afghan government with about 40% of all its revenues. The contrast between the Soviet success and the dismal American failure is striking.

And this is not the only example. In a report earlier this year, SIGAR noted that USAID had spent $335 million on the Tarakhil power plant, which theoretically services Kabul. According to SIGAR, ‘from February 2014 through April 2015, the plant exported just 8,846 megawatt hours of power to the Kabul grid, which is less than one percent of Tarakhil’s production capacity during that period.’ Furthermore, the ‘underutilization of the plant has apparently already resulted in the premature failure of equipment … and “could result in catastrophic failure.”’ Compare this with the Naghlu hydroelectric plant, completed by the Soviets in 1966, which continued to pump out electricity for Kabul during the Taleban period, and was successfully restored to full operation a few years ago by the Russian company Technopromexport for a mere $32.5 million.

As I point out in my book, Soviet economic aid to Afghanistan failed to promote sustained economic growth in that country. Still, by comparison, the aid provided by the United States (and I am sure also its Western allies) is stunningly, awfully, extraordinarily, incompetently managed.