Why there is so much corruption in Afghanistan?

By Haris Jahangeer

Afghanistan has been repeatedly ranked as one of most corrupt countries in the world; the 2012 Corruption Perception Index (CPI) ranked Afghanistan the third most corrupt country in the world with a score 8 out of 100. Afghanistan, together with North Korea and Somalia, are the only countries that scored below 10 among 174 States in this index, which means that the public sector is perceived as very corrupt in those countries.The National Corruption Survey (NCS) 2012, conducted by Integrity Watch Afghanistan in 2012, attests that corruption is considered the third biggestproblem byAfghans citizens after insecurity and unemployment. Approximately $ 1.25 billion waspaid in bribes in 2012, which is equal to 6% of Afghanistan’s GDP.Theimperative questionwe need to askis: why there is so much corruption in Afghanistan?[i]

There are a large number of factors contributing to this chaotic situation, ranging from the patronage nature of society to the flooding international aid in the aftermath of Taleban regime.This blog will explore one of the multiple reasons of the endemic corruption in Afghanistan: the link between corruption and the low wage of ordinary civil servants and disruption caused by the much higher wages of staff and advisors in governmental positionsfunded by international donors. This is especially important tounderstanding administrative and petty corruption since the civil servants who are in charge of service delivery receive inadequatewages to cover simple living costs.

There is a direct link between low salary of government officials and corruption.Therefore,the anti-corruption campaign must take in account this element.The low salary of Afghan government employeesis a source of demotivation. This encourages them to extract bribesfrom clients without feeling any guilt, especially when they see a considerable number of government employees who are paid throughinternational funding gettingmuch higher earnings plus better working environment and fancy equipment. These issues contribute topoor quality of services and widespread corruption. This may sound like a sweeping claim, but if you take a few minutes and talk to any governmental employee, the first challenge that they most likely point out is their own lowsalary.The second issue would probably be the grievances from the incentives and privileges of so-called ‘professional elites’.

According to Ministry of Finance data cited in one of the World Bank reports,an ordinary civil servant wage is ranged from $50 to $500 per month. However, a number of civil servants who went through the Pay and Grade process get from US $100 to over US $700 per month. There is a huge gap between this amount and salaries ofexternally funded staff,which rangefromUS $200to US $4000 per month.There are approximately 7000 ofexternally funded staff members working in the government of Afghanistan.[ii] In addition, when it comes to salaries or high ranked advisors and international consultants, the gap is even wider. The cost of a full-time international consultant is estimated between$250,000– $500,000 for the Afghan government annually.[iii] Buying technical assistance for reconstruction of Afghanistan has cost billions of dollars since the collapse of Taleban regime. For example, in 2009, underthe Obama administration, almost 1000 technical experts were deployed in Afghanistan to help the government ona wide range of issues from economic development to rule of law. It was extremely expensive, costing the United State almost two billion USD.[iv] The question remain that needs to be answered is, what has been the contribution of deployment of development missionaries?Surprisingly, the Afghan stateremains fragile, as it was ranked the 6th most fragile state in the world, according to 2012 Failed State Index.

When you discussthis situationwith civil servants,and especially about the contributions of advisors, you immediately feel the existence of strong sense of jealousy among the civil servants. Onone occasion, one of government employees franklyexpressed his frustrations withthe existence ofthis double standard wagesystem. He said that “people who are in the projects as an advisor are not somuch different regardingthe in qualifications than us, except that they just know a few words in English or they have a foreign passport.”[v]Furthermore, the sense of jealousy toward international consultants is also easily and often visible. For instance, some of national advisors mentioned that there is no significant dissimilarity between them and international advisors, except the advisors get high salaries, security, holiday and the work they produce is a good thing to attract more funding from donors—nothing else.[vi]

The irony is that these advisors are assigned to build the capacity of the same civil servant who feels inferiortothem and also always gossiping about their salaries, luxury offices and other privileges that they have.In capacity-buildingprogrammes mutual cooperation andtrust are extremely important. At the end of the day,the objective of any capacity-building intervention is to transfer the knowledge and skills of technical assisters totrainees, and this is virtually impossible without mutual cooperation and within a broken relationship marked by mistrust. One of the advisorsat the Ministry of Agriculture and Livestock cited a civil servant who told him during training that “it would have been better to increase our salaries instead of all the repetitive trainings”.[vii] What happens in this circumstance is very obvious: the capacity-building programme will not meet its intended objectives and it actually increases the risk of corruption in the system.

This double standard waging system undermines publicadministration reforms intended to mitigate the risk of corruption, and it may even have the reverse effects.Competent governmentstaff from the public sector getdemotivated and leave the administration system. Upon receiving new skills theywill leave thepublic sector and be hired in proxy systems which are designed to build the capacity of government institutions.  There are many instances when civil servants who gain basic knowledge of project management and English orwhohave been sent abroad have been hired as a consultant. This is kind of a brain-drain from public service.Consequently, less competent people remain in the Afghan government. On one hand, they are unable to provide high quality of service. On the other hand, due to unequal treatment, they feel more justification for misusing the power entrusted to them for private gain.It is worth mentioning that the dysfunctional and complicated bureaucracy in state administration makes the extraction of money out their clients’ pocket easier.

This is one of the reasonswhy wehave so much corruption inAfghanistan. Establishment of a meaningful payment mechanism thattreats public officials fairly is a critical step toward mitigating corruption. Harmonization of the scale of salaries in the government must be the most important component of such mechanism.Civil society should advocate for promoting a fair payment system and greater transparency in capacity-building programs. The International community can also play major role in persuading the government to develop a fair payment system and address the challenge of externally funded staff.

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[i] Note: this blog is written based on the data a number of interviews and observation that were conducted  early 2013

[ii] World Bank  (2012), Afghanistan in Transition: Looking Beyond 2014http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:23052411~pagePK:34370~piPK:34424~theSitePK:4607,00.html

[iii]MethwWoldman , (2008) Falling Short: Aid Effectiveness in Afghanistan  http://www.oxfam.org/sites/www.oxfam.org/files/ACBAR_aid_effectiveness_paper_0803.pdf

[iv]Cornwell , Susaun (2011), Reuters , http://www.reuters.com/article/2011/09/08/us-usa-afghanistan-aid-idUSTRE7876NF20110908

[v]   Interview, Government Official , Feb 2013 , Kabul

[vi] Interview , Mustafa Sorush  , Government Advisor March 2013 Kabul  ,

[vii]  Interview,  Government Advisor , March 2013 , Kabul  

Afghanistan’s Economic Transition in the Making?:Community Perspectives from Aynak and Hajigak Mining Sites 

By Javed Noorani

Afghanistan is believed to be sitting on trillions of dollars worth of minerals[i]. The discovery of natural resources and the prospect of investment in the mining sector reduce the fears of state collapse after the reduction of international donors’ money which presently comprises 90% of Afghanistan’s budget[ii].

Women using animals as source of transportation in Bamyan
,high way to Band-e-Amir,2012,Photo by Javed Noorani

The current state of Afghanistan is 12 years old and still faces multiple development challenges, despite the approximately 60 billion US dollars in support to reconstruction efforts by international donors[iii]. Advancements have been made in support of governance structures, the extension of rule of law and for stabilization of the country. The major challenge however, still remains: to earn the loyalty of Afghanistan’s citizens.

The mining sector offers a good opportunity to invite investment and generate revenues for the development of a diversified economy and to work on improving relations between the Afghan state and its citizens.

The focus of policymakers towards the mining sector is often on making the business environment welcoming for investment—rightly so because of the distinct nature of the sector. Investment in mining is risky because it requires huge capital investment in the beginning and it usually takes a substantial period of time for investors to recover their costs. The risks of investing in the sector stem from technical, political, social, economic, environment and cultural sources, risks that often cannot be estimated by stakeholders in urban settings. Communities living around mines therefore play an important role in both mitigating and accentuating the risk a mining company could face.

Despite being different from other mineral rich countries culturally, politically and socially, communities living around or affected by mines in Afghanistan react in a similar manner to protect their rights when threatened. Integrity Watch Afghanistan research for instance shows that many of the communities around the mines are not aware of the long-term impacts of mining and usually think in a short-term framework. They seek quick benefits because their memories of war and their history of displacement and relocation in the past three decades have weakened their safety net and reduced their sense of insecurity. It therefore is essential to consider people’s unremitting exposure to violence and conflict when looking into the impact of mining on the lives of local people.

Focusing on the Aynak Copper mine and Hajigak Iron mining site, this article looks at perspectives of communities living around mineral rich areas to understand their perception and their feelings at the dawn of mineral discovery and investment in their regions. Both sites have attracted lucre seekers alike and have already gained an almost folkloric status in the local communities’ imagination.

A long route to take: voices from the Aynak Copper Mine

Communities living around Aynak copper mine have already been impacted socially, culturally, economically, politically, and environmentally. The mine is located in the south of the country, in Logar province, about 1 hour drive southeast of the capital Kabul. Aynak is the first mine that has been awarded to a Chinese private joint venture called China Metallurgical Group Corporation and Jiangxi Copper by the Afghan government in 2008. Reports show poor environmental and labour standards in the extractive industry by Chinese investors. They are accused of violating environmental standards and often bring in a Chinese labour force to work in mines. Xinhua News Agency reports that China's top copper smelter has been accussed of discharging industrial wastewater into a local river in east China's Jiangxi province, causing serious water contamination that affects hundreds of thousands of people living down stream. Dozens of children in the village of Dexing were found to have excessively high levels of lead in their blood. Local residents pinpointed a lead production facility under Jiangxi Copper as the source of the problem.[iv]

Research findings in 2012 show that illegal acquisition of community land for copper mining at Aynak has fragmented the communities socially and physically. Accessibility to each village has become expensive and more difficult due to lack of transport. This is largely because the communities that have been displaced have neither been consulted not compensated and the company moved and started work without attending to outstanding issues. One of the residents of Davo, a small cluster of villages close to Aynak, voiced concerns, stating “we could attend weddings and funerals in other villages where our relatives stayed with ease before the project was given out. Now we have to take a long route to reach the other side of Aynak and we find that difficult. Women can’t attend social gatherings and events. They can no longer walk in the village thus their little world in the conservative communities have been made even smaller.”[v]

The demarcation of the area for mining has led to displacement of five villages in the beginning, and plans call for more villages to be vacated. There are thousands of families which are scattered around Mohammad Agha district where the mine is located. Many of these families have lost their source of livelihood, such as agricultural land and livestock because they have lost their pasture land. A resident of Seeso Tangia village said that some people from the local government departments came and smashed his crops in order to force him to vacate his land for the company to start working.[vi] Another resident said he had almond trees which were a source of income and he has lost them due to the investors. He further added that he is not compensated for his losses and his son has left for Pakistan to seek work.[vii]

Fear and expectations: voices from the Hajigak Iron Ore Site

Hajigak iron ore site, located in Bamiyan and Maidan Wardak provinces of Afghanistan’s central highlands is another important area which has charmed many investors and people. At the time of writing the contract for this mine is still in the process of negotiation with two big international investors, the Canada based Kilo Gold [viii] company and a consortium of 7 Indian companies[ix]. The communities living on the Hajigak Mountain and on two other sides of the mine are at the same time full of fear and expectations. The local residents are scared of losing their land to the project the way people in Aynak did. They also are averse to in-migration of people from other provinces. Nonetheless, they see investment in the iron ore site as a source of future employment, better amenities, and riches.

A local female health worker stated that she expects investment will bring employment for people, more schools and clinics, and better roads in the region.[x] A member of a newly created Shura, or community council, in the Kalo sub-district where Hajigak is located stated that he wants compensation for the losses people suffer to be assured and guaranteed that employment opportunities will be provided for the local citizens [xi]. Members of the Shura [xii] from the Maidan Wardak side of Hajigak narrate that they do not want Hajigak to be politicized and that the contract must be signed to bring investment, as they need jobs and other opportunities for their remotely located communities.[xiii] Despite their worries and concerns a senior member of the community said that communities look forward to companies operating mines there.[xiv] The majority of the people in Hajigak are fascinated by the prospects of Indian investment in Hajigak. They expect the presence of the Indian mining consortium to lead them to better life.

Sustainable and inclusive development of the extractives sector as first priority

The tone set after the discovery of minerals across Afghanistan has led to new perceptions, expectations, and attitudes among Afghan citizens. Citizens subjected to media reporting expect cash coming their way from the mining revenues. And, there is nationalistic rhetoric heard in political circles about political elites and warlords increasingly making investments in the mining sector, either directly or through their cronies. The sanguine aspect of the natural resources’ discovery is that it could be used to create employment opportunities, investments in human development, and development of other sectors such as agriculture and services. Likewise it can help transitioning the economy. However, there is a need for inclusive development of the extractives sector including transparency in tendering and short listing companies to invest in the sector, impartial evaluation of proposals of each company and accountability of political decision makers. Social and environmental assessments as required by Afghan regulations must be done by neutral experts and match international standards. A prudent use of the natural resources and of revenues generated from the mining sector could create spaces for sustainable development and for balancing work towards the stability of the ‘Social Contract.’ These important objectives can be achieved when civil society positions itself and plays its sacrosanct role holistically to shape the discourse around the extractives sector. The international donor community needs to help improve the capacity of civil society and the Afghan government needs to engage Afghan citizens through a dialogue to accommodate their concerns and utilise their recommendations.

Corruption has become systemic and fighting it requires serious cross-institutional cooperation and a civil society that understands the mining sector, and the risks associated with it, in order to monitor and hold the government and mining companies accountable. Stakeholders need serious capacity building and further dialogue with the government to work for transparency and accountability. 

The Natural Resource Charter[xv], the Equator Principles[xvi], the Extractives Industries Transparency Initiative EITI[xvii], the International Institute for Sustainable Development[xviii], the World Bank, and the IMF are involved at different levels to provide guidance, assistance, grants, and loans to resource-rich countries to avoid the ‘resource curse’ through legal, policy, and institutional mechanisms for effective revenue collection and management. Afghanistan’s natural resource sector has the potential to generate revenues for the government and for its citizens. However, governance is in deficit and mechanisms for efficient allocation of resource revenues are missing. The capture of resource rents requires an efficient fiscal regime, collection mechanisms and allocation of revenues based on strategic need assessments to generate sustainable revenue streams for the current and for next generations. The allocation of natural resources revenues must be based on inclusive discussion and decision making among stakeholders from government, civil society and parliament.

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[i] Najafizada, Eltaf, 2011, U.S., ‘Afghan Study Finds Mineral Deposits Worth $3 Trillion’ Bloomberg,(accessed November, 20th, 2012)

[ii] United State’s Government Accountability Office, 2011, Afghanistan’s Donor Dependence, September 20th, 2011

[iii] http://english.cntv.cn/program/asiatoday/20130313/100058.shtml

[iv] Jiang, 2011, ‘Toxic Copper Mining Grips "Mother River’, CRIENGLISH.com (accessed February 28th, 2013)

[v] Author’s interview with Akbar Khan, resident of Davo village, dated December, 2nd, 2012.

[vi] Author’s interview with Bang Gul, a resident of SeesoTangia, dated September, 10th, 2012.

[vii] Author’s interview with resident of Davo who sought not to be name, dated January 12th, 2013

[viii] KiloGold is a Junior mining company based in Canada.

[ix] SAIL-led consortium of seven Indian companies is called Afisco (Afghan Iron and Steel Consortium)

[x] Author’s interview with a local health worker in Kalo, dated July, 20th, 2012.

[xi]Author’s interview with Shikhzada,  member of the Shura in Kalo, July, 20th, 2012.

[xii] A Shura is a traditional organization, formed in this case to protect and promote the rights of local communities

[xiii] Author’s interview with Nooragha, a member of the Shura in Hajigak, dated, September, 10th, 2012.

[xiv] Author’s interview with Haii Daud, a senior representative of the people in Hajigak, dated Septermber 10th, 2012

[xv] http://naturalresourcecharter.org/content/natural-resource-charter-english

[xvi]http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CDEQFjAA&url=http%3A%2F%2Fwww.equator-principles.com%2F&ei=fP7fUKDLO8el0QW5s4EY&usg=AFQjCNHGiDCjQYKiMnnqBsi2UdXQxFyZVw&bvm=bv.1355534169,d.d2k

[xvii] http://eiti.org/

[xviii] http://www.iisd.org/

Aynak: Renegotiation or pawn of the next generations

By Javed Noorani

Tolo News reported on 22 August 2013:“Wahidullah Shahrani, the Afghan Minister of Mines, said that China Metallurgical Group Corporation (CMGCC) requested a review of its contract with the Afghan government for the Aynak Copper Mine project in Logar province”[i]. In the light of the statements made by Minister Shahrani during the multi-stakeholders meeting for EITI on April 17^th this year, the ministry’s stand seems to be misleading.

The Aynak Copper Contract signed with the CMGCC obligates the company to pay US$ 808 million dollars in three installments as bonus n advance to the Afghan government as cost recoverable in the run up to the commercial production of copper at Ayank According to the contract, the company also commits to building a railway line linking the northern border of Afghanistan to the eastern border. Moreover, the company is obligated to 400 MW electricity generation, production of pure copper and paying 19.5% royalty when the price of copper is very high internationally.

In the presence of more than 13 members of multi-stakeholders group MSG which works for the implementation of Extractive Industry Transparency Initiative, the Minister of Mines on 17^th April 2013 shared the terms of the contract for review. The CMGCC had requested for re-negotiation in five areas: reduction of royalty to 10%, no more bonus payment (US$ 808 million) to the government as previously promised, no production of copper in Afghanistan, therefore negating the need for producing 400 MW. Moreover, the company seems to think that the construction of a railway is not feasible and requested five more years before it starts producing. There venue from the project during its production stage was estimated to be US$ 300 million. The company was to start producing in 2013 and within the parlance of rational thinking the government may have already allocated the money; this could already constrain the national budget.

Despite being stopped to access Aynak Copper site by design of some officials in the Ministry of Mines, Integrity Watch Afghanistan managed to follow the activities of the company on the ground. Integrity Watch researcher observed that the Aynak Copper Project was neither progressing well nor effectively, and it was a deliberate decision to do so. The progress in the implementation of Aynak Copper Project was not shared with civil society in a timely manner and what was shared was often embellished. The commitment to transparency followed an ebb and flow trajectory, perhaps indicating that some individuals were calling the shots rather than a mechanism for transparency being institutionalized. 

Yes, we want money post-2014 when donor money dries up. But what is the cost we have to incur to finance our budget? Afghan citizens would want the CMGCC to implement the contract as it was signed.

Minister Shahrani’s planned visit in China to renegotiate the contract puzzles us and defies rationality. We may need money and they need copper, but we have other potential buyers interested in copper and they would be ready to pay a lot of money. Minister Shahrani thinks he can convince Afghans with the conditionality clause for railway and royalty already included in the contract to pave the ground for renegotiation in favor of the company and not of Afghanistan. We underline that the request for re-negotiation is unfair. No one should forget that the contract signed for copper extraction with the MCC has been read word by word and the government bears responsibility to implement it. Otherwise the Afghan government owes it to its people to tell them why it is going for renegotiation rather than retendering it. It was a strategic contract and the decision to send the Minister of Mines to China is already a gesture of appeasement which may seal our fate for the next generations. We would really look forward to a sensible decision on Aynak to protect Afghanistan’s interests.

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[i]Tolo News, 2013 , Chinese Company Seeks Amendment to Ainak Copper Mining Contract, August 22^nd 2013 (accessed on August 22^nd, 2013 http://tolonews.com/en/business/11650-chinese-company-seeks-amendments-to-ainak-copper-mine-contract)