Officials - Money for Afghanistan needs guidance

Tuesday, January 22, 2002

TOKYO -- A two-day conference on aid to Afghanistan closed Tuesday with pledges of more than $4.5 billion, but officials warned the challenge now is seeing the money gets to where it needs to go.

Organizers said that more than $1.8 billion was earmarked for the current year. The remaining $2.7 billion would be distributed by the donors over the next several years.

The United States, Japan and the European Union opened the meeting Monday by offering about $1.3 billion in pledges. But other contributions were smaller, such as $5 million promised by Turkey. Some countries gave no figures at all. At least 25 countries indicated they would contribute.

Few details were given about the rules for spending the aid money. Often, donor countries require their aid be used to buy goods from companies in those countries. Private aid groups have expressed concerns about such conditions.

"We all know that it's going to be tough to make sure that the money gets to the place that it should go," said World Bank President James Wolfensohn on Tuesday. "But I think with a proper transparent system, with a lot of auditing, with accounting, there's a fair chance that we'll get most of the money where it's supposed to go."

Briefing reporters Tuesday, a senior U.S. delegation official agreed that pledges in Tokyo for the first year "exceeded expectations."

He added, however, that managers of the global aid drive would have to lean on some countries to give more.

Annan's goal

Donations fell short of the $10 billion, five-year goal that was floated by U.N. Secretary-General Kofi Annan during his opening address Monday.

But that was mainly because none of the big donors -- the United States, Japan, the European Union and Saudi Arabia -- made a pledge spanning more than three years. Congressional budgetary procedures prevent the United States from extending its $296 million pledge past this fiscal year, which ends in September.

Delegates consider this a make-or-break chance for Afhgan Prime Minister Hamid Karzai, who is trying to collect funds while the world's attention is still focused on Afghanistan.

He assured the delegates that his post-Taliban government was committed to free-market policies, advancing human rights and wiping out terrorism.

Secretary of State Colin Powell promised $296 million in the current fiscal year, telling Karzai that "the American people are with you for the long term."

Afghanistan is beginning reconstruction nearly from scratch. Decades of war have all but leveled the country's infrastructure; the central bank was looted in the last days of the ousted Taliban regime; and government employees have not been paid for months.

Karzai's plea came as he embarked on his first world tour to stump for support and solidify his power base in Kabul. Bringing home a bundle in aid will help him do that.

"I stand before you today as a citizen of a country that has had nothing but disaster, war, brutality and deprivation for many years," Karzai said. About two-thirds of Afghan adults are illiterate, and nearly 3,000 people are maimed by land mines every year.

Karzai's chief economic adviser, Torek R. Farhadi, played down concerns that U.N. expectations had not been met, saying the world body's estimates were built largely on educated guesses without the benefit of census and statistical studies.

Farhadi said any pledge is a plus for Karzai, who will likely seek election when the term on his interim government runs out later this year.

"He's the guy bringing back the billions," Farhadi said.

Underlining his new international profile, Karzai stopped in Saudi Arabia on his way to Tokyo and is planning a stop in Beijing before a planned meeting with President Bush in Washington.

Tracking pledges

Treasury Secretary Paul O'Neill told delegates in Tokyo that all pledges should be carefully tracked to make sure they are effectively used and not squandered through corruption. He said it was important for Karzai to keep his new government small and avoid lavish spending.

After the conference, Powell warned that rebuilding Afghanistan will be more challenging than the U.S.-led military effort.

"There are bad people still out there in waiting, trying to frustrate this," Powell said of the reconstruction. "What's ahead in some ways is going to be far more difficult than what we've seen over the last four months."

Establishing effective monitoring systems would help Karzai's administration establish a track record and encourage other countries to come forth with continuing donations, O'Neill said.

The top U.N. priorities are establishing an Afghan police force, filling the coffers of the interim government and getting farmers back in the fields to plant crops.

Japanese Prime Minister Junichiro Koizumi said his country, the world's second-richest, will contribute up to $500 million over the next three years, with $250 million of that disbursed in the first year.

The European Union will contribute about $487 million this year, of which $310 million will come from member states and $177 million from the European Commission. Britain promised an additional $295 million over five years.

Conference co-host Saudi Arabia added another $220 million over the next three years. The World Bank and Asian Development Bank pledged $500 million each over the next 2 1/2 years in low-interest and no-interest loans.

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