Pentagon IG Investigating Why US Spent $700 Million on Economic Development in Afghanistan and Accomplished Nothing

SIGAR: Pentagon’s Economic Development in Afghanistan ‘Accomplished Nothing’

Joe Gould

Defense News, November 18, 2014

WASHINGTON — The US Special Inspector General for Afghanistan Reconstruction (SIGAR) says he is investigating the Pentagon’s efforts to spark that country’s economic development, which cost between $700 million and $800 million and “accomplished nothing.”

SIGAR’s chief, John Sopko, told reporters Tuesday, that the agency has opened an “in-depth review” into the Task Force for Business and Stability Operations (TFBSO), a Defense Department unit aimed at developing war zone mining, industrial development and fostering private investments.

“We have gotten serious allegations about the management and mismanagement of that agency, as well as a policy question about what they were doing and whether they should have existed,” Sopko said.

More broadly, Sopko faulted the US government’s economic development efforts in Afghanistan as “an abysmal failure,” saying it lacked a single leader, a clear strategy or accountability. An avenue of inquiry for SIGAR’s investigation into TFBSO could be Afghanistan’s underdeveloped mining industry.

“We have seen hit-and-miss efforts to develop the [Afghan] economy,” Sopko said of the US. “You, the development experts, should have had a plan to develop the economy and you haven’t, so now we’re stuck.”

Untapped mineral wealth in Afghanistan is estimated at $1 trillion, but Sopko noted that Afghanistan has only recently passed mineral laws and legal gaps make investment unattractive. Critics say the law lacks transparency regarding contracts and ownership, and strong rules for open and fair bidding.

The task force did not immediately respond to a request for comment.

Sopko has said the US’ unprecedented $120 billion reconstruction investment there is at risk because Afghanistan is rife with corruption and lacks the security, technical prowess and economic health to sustain much of the work the US has done. He cited the case of $486 million the Defense Department spent for 20 G222 transport planes intended for the Afghan Air Force that sat idle in Kabul before they were sold for $32,000 and scrapped.

While the perception on Capitol Hill is that the US commitment is over, Sopko said, it has promised a decade of funding in its bilateral security agreement with Afghanistan.

“We need to make a commitment there because they can’t afford the government we’ve given them, and if our intended goal was a government that would keep or kick the terrorists out, we’re going to have to fund it,” Sopko said.

Afghanistan’s domestic revenues do not cover its total public expenditures, 90 percent of which are funded by the US and international partners, according to a report last year from another government watchdog, the Government Accountability Office.

Corruption continues to feed the insurgency and drain the economy, Sopko said, but Afghan President Ashraf Ghani’s focus on anti-corruption and regaining money from the 2010 Kabul Bank failure are positive signs. Sopko was optimistic for freedom of movement and better security within 10 years.

“It is better, but the question I’m asking is, ‘Could it have been better,’” he said. “This is the most money we have spent on reconstruction of a single country in the history of our republic. Shouldn’t it have been better?”