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Senate report: Afghanistan’s economy at risk

08 June 2011 20:06 (UTC +04:00)

Baku â€“ APA. Despite $18.8 billion spent by the U.S. to help stabilize and build up Afghanistan, that nation is at risk of falling into financial crisis when foreign troops leave in 2014, a new report from Senate Democrats says, APA reports quoting â€œAssociated Pressâ€.
President Barack Obama’s choice to serve as U.S. ambassador to Afghanistan, Ryan Crocker, faced senators’ questions Wednesday about the U.S aid and the size of the upcoming troop drawdown. He was to testify before the Senate Foreign Relations Committee.
The panel’s Democrats issued the report that says stabilization programs in Afghanistan have had limited success. The $18.8 billion spent over 10 years is more than the United States has spent in any other country, including Iraq.
Misspent foreign aid can result in corruption, alter markets and undercut the ability of the Kabul government to control its resources, said the report, which was posted Tuesday night on the Senate committee’s website. The World Bank found that a whopping 97 percent of the gross domestic product in Afghanistan is linked to spending by the international military and donor community.
"Afghanistan could suffer a severe economic depression when foreign troops leave in 2014 unless the proper planning begins now," the report said.

Obama, after conferring with military leaders and senior advisers, will decide this month on how many of the 100,000 troops to withdraw from Afghanistan. The drawdown is expected to begin in July.
The State Department and the U.S. Agency for International Development are spending about $320 million a month on foreign aid there, relying on the money to "win hearts and minds." Among the successes has been a sevenfold increase in the number of children attending school and gains in health care.
But the report said the United States must take a closer look at how it spends the money, relying heavily on contractors. The U.S. must do a better job of oversight, especially as it funds more aid through the Afghan government. One recommendation was to standardize Afghan salaries and work with the government on staff limitations.
The panel’s Democrats also suggested that Congress implement multiyear aid programs and closer scrutiny of stabilization programs
"Transition planning should find the right balance between avoiding a sudden drop-off in aid, which could trigger a major economic recession, and a long-term phase-out from current levels of donor spending," the report said.
At his confirmation hearing, Crocker is certain to face skeptical and war-weary lawmakers wondering about the U.S. investment in Afghanistan in the 10th year of the war and after the killing of al-Qaida leader Osama bin Laden.
Republicans and Democrats are pressing for a robust drawdown of the U.S. forces from Afghanistan, especially in a time of serious U.S. financial woes. The administration is seeking about $3.2 billion in foreign aid for Afghanistan in next year’s budget, an amount likely to be closely reviewed.