The Trees of Kabul

This is a guest post by a long-time friend, Philip Clark who is based in Kabul -  I will be in Uganda for a week - so no posting.

Kabul, 27 March – On 7 March I watched Gen. Petraeus – whom I had just met and to whom I’d immediately made a joke – and Ambassador Eikenberry plant trees in a Kabul park during a snow storm. The show was heavy and very welcomed but it apparently was the last of the Kabul season, and, almost at once, the weather changed.


Day by day, we could see the snow diminish from nearby Television Hill, a former Taliban holdout where the local stations now have their towers. The grass – that which hadn’t been crushed to straw underfoot – turned immediately green. The scattered rose bushes sprouted leaves. Within two weeks, I spotted two dandelions and a daffodil in full bloom. From our car, we could see a cluster of cherry trees, safely sheltered behind a wall, in riotous pink flower. During the tree planting, municipal workers had shivered in their tunics – green for park workers, orange for sanitation crews -- but now we were in shirtsleeves as we dashed between the AID and State compounds.

The farther, higher peaks still are resplendent in their white coatings, glowing in the sun, and that’s good. Late-melting snow will provide water for irrigation over a longer stretch of the growing season than rain, not all at once, when much would be wasted or, even worse, cause flooding. Now the concern is the sudden switch from winter to spring will foment early thunderstorms. Thunderstorms can bring hail, which could destroy just-sprouted crops, when they are most vulnerable. Like farmers everywhere, Afghans have plenty to worry about, even without deliberate Taliban bombings and accidental NATO strikes.
The tree planting was a joint effort of USAID and the International Security Assistance Force the military coalition here. USAID is doing the bigger part but both the general and the ambassador made speeches, as did the mayor of Kabul and several Afghan government ministers.

My joke came when Gen. Petraeus arrived at his seat in the front row. We were in the second. He introduced himself first to the deputy director of the Office of Democracy and Governance – my bailiwick – Maria Barron, then to the chief and deputy of our implementing partner behind the tree project. (Implementing partners are the firms that actually do our work. We publish “request for proposals” for projects, then let contracts to implement them.) All three had identified themselves with the project, and Maria specifically said she was from AID but when Petraeus came to me, and I did the same, besides greeting me, as he had the others, he thanked me for buying the trees. Maybe he realized the implementers were hired guns, but why not thank Maria? Unconscious sexism, perhaps? I didn’t know, of course, but when he spoke to me, I replied, “General, I did it only because Maria told me to.” Petraeus was unfazed.

From the hill-top park, we had a nearly magnificent view of Kabul and the surrounding mountains. The panorama was diminished by cloud cover and mist but was still impressive. Unlike so much of our work, the tree-planting project provided instant gratification. We could see thousands of saplings ready to plant. The result of our investment was obvious. What will become of Afghan democracy, of women’s education and civil rights, of the Taliban and war lords remains to be seen but right now we could see a park full of trees because of us.

The dignitaries had been expected to plant a tree or two each but they threw themselves into the task with gusto. Perhaps they, too, enjoyed seeing an unambiguous, concrete result. As traditional musicians wandered from sapling to sapling, serenading each one, the ambassador, the general, the mayor and Afghan ministers planted tree after tree, while photographers – amateur and professional paparazzi -- swarmed around them, stampeding from each tree to get shots of the big shots wielding shovels. We had an official embassy photographer and television crews. The assistant mayor for technology recorded the event on his iPad, and dozens of embassy and city employees snapped pictures with their cell phones. It was fun, and that’s probably something neither the ambassador nor the general gets to say here very often.

USAID Closes Down a Contractor

A little scandal in the development world is always fun – except for the people who are the cause of the scandal.

AED, it was reported in yesterday’s Washington Post, has been suspended from future USAID contracts while the Office of the Inspector General completes an investigation of the non-profit.  The Post reports that according to a statement from USAID, the initial findings by the inspector general's office "reveal evidence of serious corporate misconduct, mismanagement, and a lack of internal controls, and raise serious concerns of corporate integrity.  AED holds 65 contracts with USAID worth over $640 million. The article also points out that USAID said it decided to suspend AED after the inspector general's investigation started in spring 2009 and found "substantiated evidence of misconduct by AED.”  AED had to return money following an investigation into its Pakistan project.  AED also has significant contracts in Afghanistan. 

How much of the misconduct is related to shorting consultants and pocketing the difference?  the article does not say, but if you are in development, you know what I mean.  Example. Hotels can be expensive but if the organization tells the consultant that he or she can only bill for $100 per night and USAID allows up to $250 per night – what happens to the difference if the firm charges USAID the full permitted rate?

Now, this sort of thing has happened before.  I was once brought in to resurrect an organization where one or two staff (out of 15) had colluded with outsiders to fraudulently obtain about $185,000 during the previous two years and the OIG had shut down operations.  In that case, however, my organization had discovered the fraud, reported it to USAID, paid the money back, took responsibility for the sloppy internal financial management but USAID panicked, called in the OIG resulting in a further investigation that held up operations for another 9 months after the situation had been resolved. Nevertheless, this sort of thing happens.

The venerable Harvard University sponsored Russia development program back in the 990s was also involved in some shady practices through some subtle maneuvering by its senior person in the field.  They were found out and black-balled with ramifications all the way to the top at Harvard.

However, my question is, if this investigation started in 2009, why was AED just awarded a USAID contract in Ukraine – the kick-off of which is supposed to be on Monday, 13 December?  How on earth does USAID justify that?  By saying it’s a signed contract?  So what?  On what planet do they live?

Oh. And the CEO of AED reportedly earns close to or over $800 thousand a year. This is rumor, of course, but if true,  nice work in the Not-For-Profit universe for someone who doesn’t have to spend time in the field in the garden spots of Afghanistan and Pakistan.

Question of the Day - USAID

Why hasn't the President Obama nominated someone to run USAID yet? Yes, there is a lot on the plate just now, including trying to ignore treasonous, poisonous and insane remarks from lunatic Republican Congresscritters, developing strategies for Iran and Afghanistan and passing a health care bill that does not reward the insurance companies by allowing them to continue to rape consumers in a non-market economy structure.

But, there is something to be said for getting the easy stuff out of the way in a hurry. And selecting someone to run with USAID - actually quite important - is the easy stuff.

Third Time a Charm in Moldova?

Yesterday, the Moldovan parliament failed to appoint a president for the second time. By one vote. The immediate result of these failures to approve acting Prime Minister Zinaida Greceanii of the Communist Party as president will be a new election 45 days after the compulsory dissolution of parliament.

The last election was immediately followed by opposition protests that quickly turned violent despite OSCE monitors' reports that the election was free and fair. Although the outgoing president Voronin has accused Romania of supporting and funding the opposition and the protests, no proof has been profered.

Russia is keenly interested in the outcome of the power struggle in Moldova as it has a firm hold on what is essentially a criminal regime in the breakaway region of Transdniestria. Transdniester is on the left bank of the Dniester. It proclaimed its status as a republic in September 1990 and declared its independence in August 1991, at the same time as Moldova. It is supported by the present Russian government much as Russia supports South Ossetia and Abkhazia - although unlike the latter two regions, Russia has never recognized the independence of Transdniestria. That may be next.

Russian foreign policy in Europe is to prevent any further rollback of its influence and to extend that influence where possible. If Romania succeeds in pulling Moldova out of Russia's sphere of influence, then Transdniestria becomes untenable; but it is unlikely that it will ever rejoin Moldova and will continue as transit center for illegal arms, human trafficking and drugs.

Despite vast sums of money spent by the EU, World Bank, the Swiss and USAID, Moldova remains outside Europe. As the Czech Ambassador Pyotr Kupr said recently, he is doing his best to bring Moldova closer to Europe. He has been only modestly successful. "People are interested in foreigners when it comes to making a profit. They do not think like Europeans. There is no civil society, no independent mass media... There is only so much one can do on the micro level."

The fact that there is has been little to no success in developing civil society or an independent media in Moldova after so many years and so much money expended by international organizations is evidence that the development community is either doing something terribly wrong or the Moldovan people don't care. Or both. So why are the aid agencies continuing with the very same programs they have funded over the past 15 years?

A new election may end the control of the only democratically elected Communist government in Europe and begin to turn wheels of change. How much capital will Romania and Russia be willing to expend to either fulfill this result or oppose it?

Time to re-think development aid

One of the purposes of this blog is to try and propose alternatives to the accepted wisdom of development aid implementation. A key problem with development aid is that little of the aid is spent on the target country contractors and suppliers and even if they are not available – always a suspect report from an “implementing partner” – there is little effort to actual developing local entrepreneurial firms. This has been particularly true in Afghanistan, of course, and has been well documented. In that regard, I hope that the Obama administration will alter the way USAID and associated US aid donors (including the Defense Department) design their terms of reference.

Since I believe in finding root causes – not just proximate causes, it may be that the principal mistake may be the manner in which development aid programs are designed and implemented. The assumptions made at the very initial stage of design then embed themselves in the terms of reference and contract. Any modifications are made at the edges.

A root problem is that both the EU and the US award development aid contracts to national firms in the vast majority of cases. Since that is unlikely to change, some effort must be made to encourage the use of local contractors, suppliers and experts. Encouragement does not mean to simply “try your best, fellas”. Contracts should affirmatively provide for levels of funding specifically for local firms. It should not be left to the US or EU contractor to inform the prime donor that such local talent is not there simply because that fact should have been discovered during the planning stage of the project. In that case, provision should be made to develop local human and business resources so that at least some sustainable development would be built into the project.

In my experience, where funding has been structured to actually promote development, it has thankfully only peripherally involved the active involvement of the recipient government whose otherwise primary goal is to make sure its fingerprints are all over the project. Allowing fund disbursement to be controlled by the recipient governments involved is, I believe, a mistake unless there is a clear commitment to actually accomplishing the goals of whatever program is involved tied to iron clad conditionalities.

Another issue that deserves another look is the way of determining indicators for success or progress. In the US, Congress is impressed with statistics – how much was spent, what units (of whatever) were built, created, reduced, changed etc. In one example I experienced, the indicator for a successful land tenure program was an increase in transactions – a largely meaningless number unless taken in context of the economic environment. It is hardly a success in such a case if the only result is a massive sell-off at fire sale prices leading to a sinking economy. Much better to have fewer transactions that result in positive economic activity – including increased values and investments. Overall, it is necessary to take a much broader, long term view and develop indicators of sustainability that do not result in dependence on donors.

Three year or five year contracts to accomplish a wish list of deliverables may not deliver much in reality. Depending on the type of initiative longer contract terms should be considered to allow for change. Some consideration needs to be given to changing economic, social and political environments even before contracts are awarded, making the terms of reference obsolete. To help avoid this prospect, the process for determining feasibility, developing a plan of intervention and deciding on targeted outcomes needs to be significantly accelerated from, in the case of USAID, the usual 145 days.

Contracts should also avoid a “buy” American or EU requirement. Too frequently, this results in more money being spent than would otherwise be the case and, not surprisingly, does nothing to assist the local economy.

In construction and supply contracts every effort should be made to contract locally. If long term construction is required, then components should be added to develop, for example, TVET schools of a permanent nature with a guarantee that whatever construction is being planned, the graduates would have a job.

One final note about NGO support. In many political environments certain NGOs are not welcome and not sustainable. That does not mean they should not receive donor support. Just don't expect any sustainability once the donor goes away. In many situations, civil society NGOs are simply not effective. If the economy is or has been cratering, those trying to raise awareness for civil society initiatives are preaching to the families desperate to put food on the table. They don't care which particular oligarch of the moment runs the local paper.

Finally, the structuring of aid programs should include an investigation of the possibility of calving off a portion of program funding to act as a form of venture capital, providing either outright grants to support existing or develop new businesses within the framework of the program – something that worked in Armenia – or recoverable grants.

Many suggestions have been made in numerous published articles regarding improving the impact of foreign development aid. Hopefully, changes are coming as a result of political pressure and less ideological proclivities of those in charge of targeting that aid.

Exclusivity Letters

Letters of exclusivity are an annoyance that I only think about when I receive one. Does anyone find the requirement to sign exclusivity agreements on bids anti-competitive and hardly something that should be required by donors who insist on promotion of market principles in their economic development interventions?

In the private sector, these agreements are called options. If a firm wants someone and wishes to exclude other firms then they should pay for the privilege. The fact that the donor - USAID for example - instructs bidders to obtain exclusivity letters (of dubious enforceability, but that is another matter)is at odds with its mission.

Consultants required to sign these agreements should be paid for their exclusivity. If the firm wins the bid, the agreement can state that the exclusivity fee will be applied to the compensation and the firm has lost nothing. If the firm does not win, well welcome to the market. Otherwise, consultants should be free to attach their names to multiple bids.