Editor in Chief: Moh. Reza Huwaida Thursday, July 9th, 2020

Afghanistan Government Spending Corruption Epidemic

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Afghanistan Government Spending  Corruption Epidemic

The Afghan government spends billions of dollars of foreign aid on services and development projects which has become a lucrative source of income for government officials, members of parliament and warlords, this results in ineffective and poor-quality projects and no value to the Afghan progress.
Government procurement is globally vulnerable to the risks of corruption but the story is different in Afghanistan, government officials, members of parliament, and even local warlords heavily influence government biddings and countrywide development projects. The Afghan government bidding processes considerably involve Bid rigging, Bribery, Kickbacks, Falsify qualification, Collusive bidding, and the most common scheme is Pay-to-Play, which means pay to get contracts, which relatively benefits the central and provincial government employees, members of parliament and influential warlords. After the contract award, instead of limited authorized point of contacts “PoC”, the central government or law by all “means” deliberately involve a dozen of provincial government officials, local societies “Shura-e-Mahal” elders, internal and external stakeholders to oversee the project progress, and approve payments which stretches intolerable hurdle to private contractors. Most of the stakeholders designated by the central government technically don’t understand the project scope, its value, and purpose but still interact on progress to receive a bribe or something of value. Payment and project handover process can take up to several years as the contract run the invoice or papers through local societies, district officials, governor, ministries, and banks, it must be approved by a dozen stakeholders including senior authorities. These indecorous lingering processes has made contractors susceptible to pay bribes in different stages of the projects, which latterly resulted in widespread culture, without existence of project, or a service, or partially completed works, companies can get full or larger payments and split the profit with government employees, this trend is ongoing for years.
The entire Afghan procurement and contracting processes and laws are irrational, ancient and heavily vulnerable to enormous corruption. It’s also inevitable, that there are bad contractors, MAFIA and cartels too, who contribute to inflate this epidemic. Due to a complex old notion procurement system for billions of dollars, and lack of coherent government procurement system and adequate laws, almost half of Afghan government public spending on services and development end in corruption, waste and fraud, while billions of this amount is paid annually by the international community as aid to remedy itself. Since the Afghan government constantly failed to cull corruption and prove success with effective usage of foreign aid, the international community, particularly the United States cut down the financial assistance in several areas, at significant level. With receipt of billions of dollars of international aid for reconstruction, the country still remains with poor infrastructure, disorganized cities and deprived standard of living.
Contractors are seen as lambs to slaughter by procurement institutions, powerful politicians and government employees make more money faster and easy than contractors who provide services, government officials, particularly project stakeholders, who represent the Afghan government raid companies to get shares and percentages almost on all projects. Due to insurmountable corruption level and no legitimacy, private companies are kept powerless, sturdily vulnerable to deal, and pay bribes for awards, invoice processing, and project handovers. It’s impossible for a company to get an award from the government without the “Pay to Play” scheme, and maintain the progress at ease without milestone payments. In some instances, at unsecured locations, contractors are compelled to pay the Taliban as well to allow them to complete the project works. In simple words, there is always little fund left for actual services, a major portion of the contract fund goes to the pockets of stakeholders. This results in poor quality projects.  In recent years, the Afghan government to dominate public opinion and show efforts to tackle unemployment, the Ministry of Rural Rehabilitation and relative authorities award construction and development contracts directly to local unskilled, no professional social groups, “Shura-e-Mahal”, who’re made of respected but “illiterate-Unskilled-Unexperienced” elder people, and have no technical skills, experience or capability to manage development projects. Similarity, the Directorate of Construction and Ministry of Urban and Housing Development “Raysate Banayee, Wazarte Khana Saazi” sign contracts directly with small third-hand street contractors locally known as “Tikadaar” who usually arrange labors for companies, and execute small tasks, or assist civilians when they construct or renovate personal homes. Those poor policies clearly show a lack of capacity to use foreign aid more effectively, most of the projects completed by social groups and third-hand street contractors start to deteriorate in few months and completely collapse in few years. There are studies conducted by SIGAR “Special Inspector General for Afghanistan Construction” and other agencies who found hundreds of failed projects in Afghanistan due to corruption, fraud, and waste.
With the intention of reform, President Ashraf Ghani has always pledged to target corruption and detained several high-ranking defense authorities who were involved in procurement corruption and bribery cases but those numbers are too low in relation to the size of contracting fraud and abuse. President Ghani has also established National Procurement Authority “NPA” in 2014, which is a centralized agency for government spending but is yet unsuccessful because of following old notion procurement laws, strict bid requirements, exclusive to big contracts and is under a senior political influence which has made it significantly difficult for small companies to get contracts. In 18 years, the government has made very few companies succeed in terms of capacity, value, and finance to serve the government at a higher level, local firms shut down too often due to limited opportunities, monopoly, complex and corrupt procurement system. With this said, several industries encounter constant failures. Centralizing government spending is not a solution alone, a single agency can’t control countrywide government spending, oversee progress compliance without a widely feasible and reliable system.
Its system that prevents fraud and corruption, not an agency. The government must create and follow contemporary laws and use digital technology to archive contract data and must be accessible online countrywide for institutions to track, monitor and evaluate contracts, progress, and contractors. Instead of paper-based bidding, the government must conduct electronic procurement, meant, replication of modern era procurement, to accept offers through internet, award and process documents and payments online. With integrity and transparency in the digital procurement system, specific or limited stakeholders on behalf of the government, there will be fewer butchers to slaughter. The government must also promptly bring to justice those individuals who abuse their authorities for personal gain, impose strict law enforcement, long-term jail sentence, and penalties to deter future misconducts and restore public trust in government institutions. This will result in satisfactory quality projects, bring more value to the government, the public and the international community’s donation.

Aashiqullah Zazai is COO for Sohail Global Group, he managed large number of US government development projects in Afghanistan. he is a Swiss UMEF Alumni, International Studies student at American University in Washington .

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