SIGAR’s Lessons Learned from Public Sector Development Support in Afghanistan.

SIGAR* has released its 3rd lessons learned report on Afghanistan’s public sector development.  It makes interesting reading if you follow Afghanistan, care about international development, and pay attention to how international aid funds are managed.

The lessons learned, which are summarized below, are U.S. Government- and Afghan-specific, but they can apply to any “development” policy and program implementation considerations.  There is nothing new under the sun:  (i) we always fail to take into consideration the magnitude of the projects involved, (ii) we are arrogant in our determination that we know better -even if we have never lived abroad and have zero sense of what other cultures are like (and, mind you, you can never quite know about this unless you live among them and learn from them)-,  (iii) donor countries’ government official “experts” come and go way too quickly to make much of a difference, (iv) we always underestimate the extent that corruption -as we define it- might be someone else’s way of life, and, (v) “change”, if there is going to be any, is a painful process that threatens many, making them feel extremely vulnerable and reticent to engage in it.

From my limited experience, any “development” process needs to ensure that the rule of law is the foundation.  You cannot develop a justice sector dealing with just the “criminal” side of justice.  Commercial, economic, private sector, education, infrastructure, land rights, health, etc., development programs have to have the proper legal foundation first.  You cannot create the program first and then develop the regulatory framework later.  Further, you cannot ignore the children and their schooling.  Whatever “development” programs are accepted by the host country (whether they involve building a dam, helping women obtain micro loans, or drafting a new penal code), the underlying premises that will make the programs sustainable need to be introduced at an early age.

LESSONS

This report identifies 12 lessons drawn from the U.S. experience with private sector development and economic growth in Afghanistan.
1.  It is not realistic to expect robust and sustainable economic growth in an insecure and uncertain environment.
2.  Establishing the foundational elements of an economic system at the beginning of a reconstruction effort sets the stage for future success.
3.  Any new economic system which represents a break with a host nation’s past knowledge and practice must be introduced carefully and with sufficient time to ensure adequate buy-in and the development of the robust institutions required to maintain it.
4.  Spending too much money too quickly can lead to corruption and undermine both the host nation and the goals of the United States, while too abruptly reducing funding can hurt the economy.
5.  Inadequate understanding and vetting of the webs of personal, sometimes criminally related, networks can allow elites to control economic activity at the expense of open and competitive markets.
6.  Successful private sector development efforts must be nested within the development of the rule of law and overall good governance.
7.  The choice of a model for economic growth must realistically acknowledge a country’s institutional and political environment and its physical endowments.
8.  The provision of grants and below market rate loans can undermine commercial banks and other market-oriented institutions and create unsustainable businesses.
9.  Support to businesses and government institutions needs to be tailored to the environment.
10.  Clear agreements on institutional roles, responsibilities, and lines of authority, reinforced by human resource policies that fit a post-conflict environment, are necessary for an effective private sector development strategy and for overall development.
11.  Rigorous monitoring, evaluation, and analysis, which transcend individual projects and programs, are necessary to understand the effectiveness of private sector development interventions.
12.  Investments in human capital have significant returns, although it may be years before they are realized.

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*Special Inspector General for Afghanistan Reconstruction

SIGAR’s Advice on Program Implementation.

The Special Inspector General for Afghanistan Reconstruction (SIGAR) produced an audit of a Department of Defense (DOD) $635 million program in Afghanistan -the Task Force for Business and Stability Operations (TFBSO), which yields some self-evident and interesting points:

Taking the following actions might improve such an entity’s ability to implement programming and achieve results:

• Define the entity’s mission, scope, and objectives in clear and measureable terms.
• Authorize the entity for longer than 1-year intervals to reduce uncertainty about its future and allow it time to plan ahead for its projects.
• Direct the entity to:

o Develop contract planning policies that emphasize the importance of understanding host-country or local dynamics and obtaining buy-in from all stakeholders before executing a project;
o Develop and implement action plans to minimize the award of  oncompetitive and sole-source contracts;
o Develop and implement action plans to ensure that its staff has adequate training and experience in developing contract requirements and providing contract oversight;
o Work with a single primary contract administration office when developing performance work statements to ensure consistency in drafting requirements;
o Develop management systems to track project metrics, civilian travel, and government-furnished equipment;
o Develop and implement a document retention policy; and
o Develop monitoring, evaluation, and sustainment plans for all projects so that their economic impacts can be accurately measured and sustained, and if necessary, assets can be transferred to an enduring partner.

SIGAR mentions that DOD was given the opportunity to comment on the audit.  Something that struck me was SIGAR’s comment to DOD’s comment, which -in my experience- is the crux of development aid or foreign assistance (emphasis in bold below is mine):

It is important to understand the difference between projects that met or partially met their contractual deliverables and projects that actually met or partially met their program objectives.  DOD is correct in observing that this report finds the contracts directly supporting 16 TFBSO projects generally met their contract deliverables and that contracts directly supporting 12 projects partially met their contract deliverables (or in one case, met them after significant delay). However, just because some TFBSO contractors met their contract deliverables in whole or in part does not necessarily mean that the projects they supported had successful or sustainable outcomes. For example, there are several documented cases where TFBSO contractors completed construction and equipment of a facility, but TFBSO was unable to locate a private company able to operate and maintain it, leading that facility to fall into a state of disuse or disrepair.  Furthermore, as we note in the report, because TFBSO did not consistently track outcomes data, such as the jobs created and government revenues generated by their projects, TFBSO was generally unable to demonstrate whether its projects met its overall objectives to “reduce violence, enhance stability, and support economic normalcy in Afghanistan.”

At the end of the day, what worries me is that many in government and the private sector voice these concerns; however,  not often are the solutions offered taken into account, or, worse still, they are quickly forgotten.  In my own experience, these concerns and suggestions have been made for decades.  I have a theory -which I will try to articulate later- as to why we seem to reinvent the wheel…