Saturday, November 14, 2009

Corruption is in the Eye of the Beholder

Corruption is in the Eye of the Beholder
Newspapers recently reported that $20 billion of American aid to Afghanistan was spent on consultants, advisers, technical experts sent by the US government to Afghanistan to advise different ministers and others in the government of Pres. Karzai. Now, as Pres. Obama is looking at options for US involvement in Afghanistan, one of the possibilities under consideration is increasing the numbers of American advisers to the Afghani government.
The Afghan government has not been happy with these advisors. One gets the sense that, in many cases, they did not ask for them and often ignore them. For another thing, all of the advisers are Americans. They are also terribly expensive – the cost for one adviser per year may run up to half a million dollars. That high cost is due to the fact that the advice is provided by a for-profit businesses. They may pay the adviser $500 a day and charge the government $2000 per day for that adviser's services. The consulting business in Afghanistan is very profitable.
The Afghan government points out that that, for a lot less money, they could get advisers from India who are much better acquainted with the problems of Afghanistan and who speak the local language. The American aid dollars would go a lot further if the Afghan government were not forced to deal with American for-profit companies whose main interest is their short run profits.
According to this report from a British group, studying the behavior of corporations, CorpWatch:
“BILLIONS of pounds earmarked for rebuilding Afghanistan have been wasted on overpaid consultants and corporate profits, a damning report claims.
It says [that] . . . £3 billion of the £7.5 billion actually spent has found its way back to wealthy donor countries rather than helping the Afghan economy.
This has happened through a mix of "high levels of corruption", bumper company profits of up to 50 per cent and the vast earnings potential of foreign consultants, who can take home up to £250,000 a year as a result of hardship payments and 'danger money'.
Five American companies are named as having scooped the lion's share of their country's cash - with huge sums eaten up by an opaque web of sub-contractors.”
The Americans keep criticizing the Afghan government for being very corrupt. But as the Afghanis see it, the high price of American advisers is an American form of corruption. American observers have described the practice of hiring advisers and consultants from private, for-profit firms as “wasteful.” Is that just a euphemism for “corrupt”? If the central goal is to help the Afghan government to improve, would it not be better to allow them to get the best advice at the lowest price? If we insist that they hire high-priced consultants from price gouging private firms in the United States whose advisers are often neither acquainted with Afghanistan nor speak the language, is it not appropriate to call that “corrupt”?
Corruption is in the eye of the beholder.