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Kabul homeless camp
A camp for homeless people near Kabul. Up to 20% of aid is being spent on consultants. Photograph: Ahmad Masood/Reuters
A camp for homeless people near Kabul. Up to 20% of aid is being spent on consultants. Photograph: Ahmad Masood/Reuters

Karzai wins $20bn aid for Afghanistan

This article is more than 15 years old
· Sum pledged at donor conference in Paris
· Help linked to fight against corruption

The US, Britain and other donor countries yesterday pledged more than $20bn (£10.3bn) in aid for Afghanistan over the next five years in an attempt to shore up Hamid Karzai's embattled government.

The total, pledged at a donor conference in Paris, fell short of the $50bn Karzai was formally seeking for his national development strategy but it was more than Afghan officials had privately expected. Bernard Kouchner, France's foreign minister, said the amount was "beyond his dreams".

Donors made clear that the Afghan government had to do more to fight corruption and aid had to be better coordinated.

Karzai faces scepticism over his determination to tackle corruption and the drug trade. A World Bank report last week also questioned his government's capacity to absorb a significant increase in aid. The Bush administration offered more than $10bn and Britain was the second biggest bilateral donor, pledging $1.2bn.

In his address Karzai acknowledged the criticism of his government. "Afghanistan needs large amounts of aid, but precisely how aid is spent is just as important," he said, and he accepted that the opium industry was a "major contributor to corruption".

But he warned donors not to forget that for Afghan farmers "opium is about survival". He also pointed out that the demand side of the opium industry was a western problem. "While opium is produced by Afghan farmers, its trafficking is an international phenomenon," he said.

Unease over Karzai's tenure has been growing among western donors. Instead of introducing reforms, critics say the president is building alliances with unsavoury characters in the run-up to presidential elections scheduled for late next year.

Outside of politics, there is also the question of capacity. Of the $25bn pledged by foreign donors since 2002, only $15bn has been spent. A dearth of qualified Afghans means some government ministries have difficulty spending their budgets. And the insurgency in the south and east means that government officials cannot travel to some areas for fear of being shot by the Taliban.

Afghanistan still ranks 174th out of 178 countries on the UN's human development index and public disillusionment is setting in. Many Afghans will greet the Paris conference with a cynical shrug, as the latest money-wasting step in a process that benefits them little.

According to a recent study by Integrity Watch Afghanistan (IWA), a Norwegian-funded, Kabul-based watchdog, two-thirds of Afghans feel there is corruption in aid, and a big majority feel that less than 40% of foreign funds actually reach the people they are intended for.

Suspicions are fuelled by anger at the high salaries and relatively lavish lifestyles of western aid workers. Up to 20% of international aid is spent on "technical assistance" - jargon for highly-paid foreign consultants - according to IWA. Some staff at the US government's development agency USAid, for example, earn $22,000 a month - 367 times more than an Afghan teacher.

The solution, experts say, is to concentrate on quality rather than quantity. But that will require urgent reforms on all sides - including among donor countries. "Quality of spending is really crucial. That's where more attention should be paid," said Mariam Sherman, Afghanistan country director of the World Bank, based in Kabul.

The Paris pledge will bring Britain's aid to Afghanistan to $3bn since 2001. The 100th British soldier to die in Afghanistan since 2001 was killed over the weekend.

David Miliband, the foreign secretary, insisted progress was being made. "The rapid economic growth is noteworthy; the social progress in for example health care, where 82% of Afghan citizens have basic health care compared to 9% five years ago, allows us to build on success," he told the conference.

Afghanistan was entering a period of consolidation, he said.

"But if we are going to be honest a period of consolidation has to address what's wrong as well as building on what's right.".

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