So Much for Exporting Democracy: Afghanistan Is as Corrupt as North Korea

So Much for Exporting Democracy: Afghanistan Is as Corrupt as North Korea

http://blog.foreignpolicy.com

BY CATHERINE A. TRAYWICK

DECEMBER 3, 2013 – 12:12 PM

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After 12 years, nearly $700 billion, and more than 2,000 dead U.S. soldiers, here’s what the United States has to show for its efforts in Afghanistan: a government that’s perceived to be as corrupt as North Korea, according to a new report from the anti-corruption group Transparency International. File it away under things U.S. officials would probably rather ignore.

The Corruptions Perception Index culls expert opinions from groups like the World Bank, Freedom House, and the Economist Intelligence Unit on public sector corruption in 177 countries. Afghanistan has lingered near the bottom of the list for years, but since 2012 has shared last place with perennial losers North Korea and Somalia, countries where “corruption perceptions … indicate a near-total absence of an honest and functioning public sector,” according to Transparency International.

The report comes on the heels of a series of warnings by the Special Inspector General of Afghanistan Reconstruction that U.S. programs in Afghanistan are vulnerable to corruption. According to an October report, the Pentagon can’t account for as much as $230 million in spare parts for the Afghan National Army. In September, the inspector general released a report highlighting the potential for waste and misuse of funds intended for public health programs. “The U.S. Agency for International Development continues to provide millions of U.S. taxpayer dollars in direct assistance,” the report read, “with little assurance that the [Afghan Ministry of Public Health] is using these funds as intended.” In April, the inspector general warned that reconstruction contracts in Afghanistan may be funneling money to U.S. enemies in Afghanistan.

USAID programs are notoriously vulnerable to fraud and corruption, as USAID often gives development funds directly to governments rather than through U.S.-managed contracts, making it difficult to ensure adequate levels accountability and transparency. In settings like Afghanistan, where political corruption is endemic already, the flaws of this approach become particularly apparent. The United States has plowed a total of $96 billion in non-military aid into Afghanistan, according to the inspector general report, but at least $236 million of that aid is at risk of “waste, fraud and abuse.”

Iraq, for what it’s worth, ranks 171 of 177 countries — four spots ahead of Afghanistan. To get a sense of how they stacks up against other countries, check out the interactive map below.


But the report isn’t all bad news. Myanmar jumped from #172 in 2012 to #157 in the index, the largest single change in this year’s report. This leap in the rankings largely stems from positive perceptions of the country’s democratic reforms as it shifts away from its recent history of authoritarianism. But, as the report notes, those perceptions are not reflective of an actual decrease in corrupt practices, which is all but impossible to measure given the deliberately obscure nature of corruption. “The long journey has just begun,” the report explains. “The government still has much to do to bring its legal framework and regulations in line with acceptable standards, strengthen its anti-corruption institutions, and open up space for civil society and the media to monitor and tackle corruption culture at all levels.”

Lowered rankings for the Philippines, China, and India also suggest that perceptions of administrative and political corruption increase when economies grow, according to the report. Similarly, Libya and Syria’s slide on the index illustrates the effects of political conflict on public perception of corruption risk. With a six point decrease, Spain fell the furthest in this year’s ranking after what the report describes as “a summer blighted by political scandals indicating a lack of accountability and fading public trust.”

While, the index is by no means a comprehensive survey of corrupt activities around the world, it draws on assessments by 13 independent institutions specializing in business and governance. There are some problems with this approach (which Foreign Policyhas noted before), but the initiative nevertheless remains useful in raising awareness of factors that can deter corruption (such as public accountability mechanisms) and those that can facilitate it (such as an influx of foreign aid). The Philippines, for example, dropped two points in large part because of ongoing corruption scandals, including those surrounding Super Typhoon Haiyan relief efforts.

Here’s a look at how the rest of the world fared:

 

 

Transparency International

 

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Report on Kabul Bank Corruption Is Classified, Taken Offline

An eye-opening report on corruption in the Afghan Central Bank that was issued last March by the Inspector General of the U.S. Agency for International Development was recently removed from the USAID web site after the Agency decided to classify some of its published contents.

The now-classified IG report focused on the failure to discover a widespread pattern of fraudulent loans at the Kabul Bank which led to the diversion of $850 million, the near collapse in 2009 of the bank, and an ensuing national crisis. Employees of the Deloitte accounting firm, who were serving as advisers to the bank under contract to USAID, could and should have alerted the U.S. government to early signs of fraud, the Inspector General found, but they did not. (Instead, the U.S. government learned of the bank corruption thanks to a February 22, 2010 story in the Washington Post.)

But in the past week or so, the March 16, 2011 USAID Inspector General report (pdf) was abruptly withdrawn from the Agency’s website.

Why? Because USAID retroactively classified certain information in the report.

“At the time our report was issued, it was written utilizing information from non-classified sources,” said James C. Charlifue, the chief of staff of the USAID Office of Inspector General. “After our report had been issued, USAID subsequently classified two documents that were cited in our report. This action resulted in the report becoming classified and we removed it from the web site,” he told Secrecy News.

Depending on the precise circumstances, the classification of information that has already been officially released into the public domain is either discouraged or prohibited, not to mention futile. According to executive order 13526 (section 1.7c), declassified information that has already been released can only be reclassified with the written approval of the agency head. Unclassified information that has been formally released and is no longer under U.S. government control is supposed to be beyond the reach of the classification system altogether.

A spokesman for USAID did not respond to requests for comment on the decision to classify the information.

In the present case, the suppressed IG report remains independently available in its original form. A copy was obtained by Secrecy News. See “Review of USAID/Afghanistan’s Bank Supervision Assistance Activities and the Kabul Bank Crisis,” USAID Office of Inspector General report, March 16, 2011.

Much of the substance of the report was previously reported in “U.S. Advisers Saw Early Signs of Trouble at Afghan Bank” by Ernesto Londono and Rajiv Chandrasekaran, Washington Post, March 15, 2011; and “U.S. Agency Ends Accounting Firm’s Afghan Contract” by Alissa J. Rubin and James Risen, New York Times, March 17, 2011.

Now that the original report has been formally classified and withdrawn, “We plan on publishing a non-classified version of the report,” said Mr. Charlifue of the USAID Office of Inspector General, “which we will place on our web site.”

by the Federation of American Scientists