AFGHANISTAN: Missing: The £5bn aid needed to rebuild lives

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".

Some £5 billion of promised aid is still with foreign governments,
apparently because of delays in reconstruction on the ground,
corruption and the inability of the Afghan government to keep tabs on
the vast sums of cash.

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 consultants' six-figure salaries are in shocking contrast to the
millions of Afghans who live in extreme poverty. About half of the 27
million population are thought to live on 50p a day, and one in five
children dies before his or her fifth birthday.

Last night, opposition politicians in Britain said the discrepancy
between the aid pledged and delivered was "staggering", and
there was a "real danger" of failing Afghanistan's
desperately poor population.

Total foreign aid to Afghanistan amounts to £3.5 million a day - a
fraction of the £50 million the United States government spends each
day maintaining its military presence.

Meanwhile, the security situation continues to deteriorate, as Afghans
grow increasingly disillusioned with the international presence. There
are about 57,000 troops in the war-torn country, including 7,800 from
the UK.

The new report, by Oxfam's Afghanistan policy adviser, Matt Waldman,
on behalf of 94 aid agencies operating in the country, makes clear
that the failure to tackle poverty directly increases the risk of
further insurgencies.

He says: "The reconstruction of Afghanistan requires a sustained
and substantial commitment of aid - but donors have failed to meet
their aid pledges to Afghanistan. Too much aid from rich countries is
wasted, ineffective or unco-ordinated.

"Given the slow pace of progress in Afghanistan, and the links
between poverty and conflict, the international community must
urgently get its act together."

David Miliband, the Foreign Secretary, who visited Afghanistan last
month, described the country as an "incubator for al-Qaeda"
and said it would become a failed state if international forces
withdrew.

Some 90 per cent of spending in Afghanistan is funded by foreign
governments, and the aid money is meant to help rebuild the
infrastructure and support the fledgling government of the president,
Hamid Karzai, who was elected three years after the fall of the
Taleban in 2001. He has been struggling to forge national unity,
disarm regional militias and tackle drug production - the country
supplies more than 90 per cent of the world's opium, the raw
ingredient of heroin.

But the report for the Agency Co-ordinating Body Afghan Relief (Acbar)
says: "Thus far, aid has been insufficient and, in many cases,
wasteful or ineffective.

"Vast sums of aid are lost in corporate profits of contractors
and sub-contractors, which can be as high as 50 per cent on a single
contract. A vast amount of aid is absorbed by high salaries, with
generous allowances, and other costs of expatriates working for
consulting firms and contractors."

It says the Afghan government has no idea where more than £1 billion
of the aid money has been spent.

Examples of where cash has been wasted include a maternity hospital in
Kabul, where more than half the £1.1 billion budget was apparently
spent on four sub-contractors, and a stretch of road between Kabul
city centre and the airport that cost £1.2 million a kilometre -
at least four times the average local cost.

The UK, through the Department for International Development, has
pledged more than £700 million and delivered some £650
million.

A spokesman for USAID in Afghanistan said its country's shortfall was
down to insecurity on the ground - meaning it was impossible to
progress schemes quickly enough to spend the cash. He said: "We
have money that we just can't disburse."

The Acbar report warns that focusing aid in the most insecure
provinces risks encouraging the insurgency to spread to areas that are
comparatively peaceful. It could also create the perverse belief that
uprisings are rewarded with international aid - while more peaceful
rural areas are left with little support.

Mr Waldman says: "The priority now is to increase the volume of
aid and ensure it makes a sustainable difference for the poorest
Afghans, especially in rural areas."

The five US companies said in the report to swallow almost half of
USAID's Afghanistan budget are KBR, the Louis Berger Group, Bearing
Point, Chemonics International and Dyncorp International.

The report says: "The total cost of each full-time expatriate
consultant, working in private consulting companies, is in the region
of £125,000 per year, with a significant number costing up to
£250,000 a year. This is some 200 times the average annual salary of
an Afghan civil servant, who is paid less than £500."

Michael Moore, the Liberal Democrats' international development
spokesman, said: "The discrepancy between the amount of aid
pledged and that delivered is staggering.

"It is clear the West is not only failing to support the military
effort in Afghanistan, but is falling short on its development
obligations too. That up to 40 per cent of aid money spent is returned
to the donor country through its companies and consultants undermines
the whole development strategy for Afghanistan.

"We are in real danger of failing the people of Afghanistan. It
is high time the international community delivered on its
pledges."

COUNTRY SCARRED BY DECADES OF WAR

This has denied them health care and schooling - it was illegal
under the Taleban for girls to go to school - and left up to 40 per
cent of rural dwellers malnourished.

More than 90 per cent of the money spent by the Afghan government
comes from donations from foreign states, who accept they have to help
in order to restore peace.

Some £12.5 billion has been pledged since 2001, but aid agencies say
too little goes on easing poverty and too much on addressing military
or political concerns. They say Afghanistan has received far less
support (£28 per head) than either Bosnia (£340) or East Timor
(£117) as they recovered from war.

The UK government is two years into a £500 million, ten-year funding
deal with Afghanistan. It supports the Afghan government in building
better state institutions, developing the economy and targeting rural
communities. It points to successes since the overthrow of the Taleban
in 2001 - six million children are now in school, 4.8 million
refugees have returned home and 233 new health centres were built in
2006-7. Also, 35,000 children who would have been expected to die from
disease are alive today as a result of immunisation.

The British cash has also been targeted at building small businesses.
Loans of as little as £100 are given to people unable to get money
from banks to allow them to set up as shopkeepers, tailors, farmers
and builders.

In total, the UK has funded £102 million of such loans to 311,583
people - three-quarters of them women.

MATERNITY UNIT REBORN

Built by the Soviet Union in 1981, the Khair Khana maternity hospital
in Kabul had so few doctors they could be counted on two hands.

It was hardly the place frightened mothers would want to come - but
in a country with one of the world's highest maternal mortality rates
and where the vast majority had no access to any medical care
whatsoever, they had no option. Conditions were dire - but it was better than
nothing.

There were only two maternity hospitals equipped for life-saving
surgery, some ten miles away, and there was no ambulance.

Imagine, then, the joy when the Italian government announced it was
funding a £1.1 billion rebuilding of two of the hospital wings.

But this became one of the worst examples of post-war waste, when half
the cash disappeared in contract payments and then further delays were
experienced when the new construction had to be rebuilt, to bring it
up to scratch.

Finally, there is a clean delivery room and an up-to-date operating
theatre where Caesarean sections can be performed. The capacity has
doubled, and the hospital now handles some 30-40 deliveries per
day.