Briefing Book

Money Can't Buy America Love

Millions of dollars are being pumped into hearts and minds projects from Kabul to Kandahar. Trouble is, it's not working. And it might even be making things worse.

While the debate over a troop surge in Afghanistan rages on, there has been virtual silence on the effectiveness of another central component of the U.S.-led strategy in Afghanistan: the surge of money intended to win Afghan hearts and minds. The figures are astounding: Next year, Commander's Emergency Response Program (CERP) funds, the monies available to the military to support projects intended to "win hearts and minds," are projected to nearly double to $1.2 billion. This far exceeds the U.S. Agency for International Development's (USAID's) global education budget of approximately $800 million. Even more startling, our research finds that such aid might be hurting -- or at best, not helping -- U.S. counterinsurgency efforts in Afghanistan.

Signs of just how important a weapon aid money is for the military are cropping up left and right, most prominently in the last tenet of the counterinsurgency mantra -- "shape, clear, hold, and build." An April 2009 U.S. Army handbook, Commander's Guide to Money as a Weapons System, provides operational guidance to military officers in war zones like Afghanistan to use money "to win the hearts and minds of the indigenous population to facilitate defeating the insurgents." The idea is to undermine insurgent support by providing a better life for local populations than militants ever could.

National security interests have always had a major influence over development assistance priorities, most notably during the Cold War. But never has aid so explicitly been viewed as a weapons system -- a fact that is having a major impact on the development assistance policies and priorities of the United States and indeed of many other Western donors. Most notable, perhaps, has been the dramatic increase in U.S. official development assistance since the Sept. 11, 2001, attacks. According to former Brookings Institution scholar Lael Brainard's book, Security by Other Means, the post-9/11 period has seen U.S. foreign assistance funding increase at a faster rate "than at any point since the onset of the Cold War." Marketing aid as a strategic "weapons system" is clearly a more effective way to convince Congress to appropriate funds than calling to alleviate human suffering and poverty in far-flung corners of the developing world.

The primary objective of U.S. aid to countries such as Afghanistan is also shifting -- from development for its own sake to the promotion of security. The result is that funding for insecure areas takes priority over secure areas. The main NGO coordinating body in Afghanistan reported that in 2007 more than half of USAID's large assistance program was spent in only four insurgency-affected provinces in the south, with the remainder split among 30 others. The leaked assessment of Gen. Stanley McChrystal calls for an even greater prioritization of resources "to those areas where the population is threatened." USAID's "new approach" in Afghanistan explicitly acknowledges that its development program is part of a broader counterinsurgency strategy and that its "essential initiatives" where it "will target areas" in conjunction with military forces and the Afghan government will therefore be in the perilous east and south. This prioritization of insecure over secure areas is not surprisingly being bitterly criticized by Afghans living in more stable areas, who feel they are being penalized for being peaceful.

All this amounts to what many fear is the "securitization" of aid, as more and more aid funding is being channeled through military forces or civil-military teams, such as the provincial reconstruction teams, rather than more traditional civilian humanitarian and development agencies.

Yet despite counterinsurgency doctrine's heavy reliance on the assumption that aid "wins hearts and minds," not to mention the billions of dollars being spent on it, there is remarkably limited evidence from Afghanistan supporting a link between aid and stability. The unquestioned faith in this assumption is particularly surprising given the considerable comparative research and historical evidence from Afghanistan highlighting exactly the opposite conclusion. The social forces that development and modernization often unleash, the literature notes, are often destabilizing. Many historians, for example, attribute the overthrow of King Amanullah from 10 years of rule in 1929 to the strong resistance to his Ataturk-style modernization efforts in the conservative rural hinterland. More recently, large-scale U.S. and Soviet foreign aid programs intended to win hearts and minds in Afghanistan during the Cold War did help promote development -- but they did little to promote stability. Indeed, a 1988 study conducted for USAID titled "Retrospective Review of US Assistance to Afghanistan: 1950-1979" damningly concluded: "The use of aid for short-term political objectives ... tended to ... weaken the longer-term political interests of the United States. Aid as a tool of diplomacy has its limitations when politically motivated commitments are at much higher levels -- and promise more -- than can reasonably be delivered in economic returns."

Our own research, conducted in 2008 and 2009 through the Feinstein International Center at Tufts University, found the same -- that there was very little evidence of aid projects winning hearts and minds or promoting stability. This should not come as a surprise; after all, the major factors perceived to be fueling insecurity have little to do with a lack of social services or infrastructure. Instead, one of the main reasons given by the Afghans we interviewed for the growing insurgency was their corrupt and unjust government.

As one tribal elder in the southeastern province of Paktia put it, the very real "lack of clinics, schools, and roads are not the problem. The main problem is we don't have a good government." He continued, "There's a growing distance between the people and the government, and this is the main cause of the deteriorating security situation." Interviewees also cited the geopolitical ambitions of Pakistan, ethnic and tribal grievances, and the behavior of the international military forces as destabilizing factors. Unemployment came up as well, but the short-term "cash for work" jobs offered on road-building or other reconstruction projects were not having any significant or sustainable stabilizing effect. Although more and more resources are being directed toward building roads because of their perceived stabilizing benefits, our research highlights the overwhelming importance of context. In areas where insecurity remained chronic and governance structures broken, the road-building cash has tended to fuel corruption (both perceived and real), intercommunal strife, and competition between local warlords.

The findings go further. Not only are foreign aid projects unlikely to make either the Afghan government or its international backers more popular, but reconstruction assistance seems in fact to be losing -- rather than winning -- hearts and minds. As the conflict has proceeded, Afghans' perceptions of U.S. and international aid, as well as those who deliver it (be they military forces, the government, aid contractors, or NGOs) have grown overwhelmingly negative. Common complaints included: too little or nothing accomplished (despite in some cases considerable evidence all around of many recently implemented projects), a perception that other communities received more aid, very poor quality workmanship, the wrong kinds of projects for the setting, and the list goes on. However, the single overriding criticism of aid was the strong belief that it was fueling massive corruption, which undermined some of the positive impacts it may have otherwise had. (A notable exception to this was the Ministry of Rural Reconstruction and Development's National Solidarity Program, which was viewed more positively for the greater role that local communities played in the planning, design, implementation, monitoring, and evaluation of the projects.)

Our research found that not only is aid not contributing to improved security, but in some cases it may actually be fueling the conflict. In the zero-sum nature of Afghan society and politics, where the gain of one individual, village, tribe, or ethnic group is often perceived as a loss for others, aid projects can often be destabilizing by creating perceived winners and losers. In the southern province of Uruzgan, for example, one government official complained, "The problem of foreign aid exacerbated the situation because Durranis [a major Pashtun tribe to which President Hamid Karzai belongs] not only got all the power in government, but some also controlled and benefited from all the aid programs."

Indeed, donors often (if unwittingly) bankroll unsavory elements both within and outside the government. Many important actors are profiting a great deal from the growing insecurity in Afghanistan -- and the money that comes with it. Just one example comes from the numerous reports of the Taliban, local warlords, and private security companies (usually with links to senior government officials) being paid to provide security -- or at least not to create insecurity -- for road convoys and donor-funded construction projects. A recent article in The Nation states that U.S. military officials in Kabul estimate that "a minimum of 10 percent of the Pentagon's logistics contracts -- hundreds of millions of dollars -- consists of payments to insurgents."

It is important to note that the overwhelmingly negative assessment of aid comes at a time when more aid is pouring into Afghanistan than at any other point in its history. There have indeed been some important successes from that investment -- from improvements in the health and education sectors to infrastructure to telecommunications. But the flood of free money since 2001 has also raised expectations about what foreign aid could and should achieve. This raises the question that, in one of the world's poorest countries, how much reconstruction and development aid will be necessary to win hearts and minds and bring about stabilization?

The most destabilizing aspect of aid, however, is its role in fueling corruption. And here, Western donor governments have been slow to acknowledge their contribution to this problem. Our research suggests that the failure to win Afghan hearts and minds is not because too little money has been spent. In fact, money has been part of the problem. Spending too much too quickly with too little oversight in insecure environments is a recipe for fueling corruption, delegitimizing the Afghan government, and undermining the credibility of international actors. But policymakers also ignore the most obvious, effective, and quickest way to reduce corruption: reduce funding, especially in the most insecure areas, to levels more in line with what Afghanistan can absorb. Future benchmarks for success, as well as incentive structures for both military and civilian institutions, should be changed from the number of projects implemented and amounts of money spent to ensuring accountability and the quality and impact of programs.

Improved security is clearly the top priority for the vast majority of Afghans, not to mention the international community. If there were compelling evidence that aid money could get the job done, treating it as a "weapons system" against the Taliban-led insurgency would be understandable. But in the absence of such evidence, development assistance should be used to promote what it has demonstrated that it is well-suited to achieve -- development. It makes little sense to waste billions of dollars on the dubious assumption that money can buy Afghan hearts and minds. Afghans can tell the difference between being assisted and being bribed. "Foreigners think money is the only issue," one tribal elder said. "Money can't win hearts and minds. If you give an Afghan a great meal but insult him he will never come again. But if you treat him with respect but only give him a piece of bread he will be your friend forever."


Briefing Book

Five Things Obama Should Do in China

Here's what the U.S. president needs to do to shore up what is fast becoming the most important relationship in the world.

As Barack Obama arrives in Beijing, he faces a different reality in China than either Bill Clinton or George W. Bush did at the start of their presidencies. Many commentators have remarked that, with Chinese purchases of U.S. Treasuries now crucial for funding the U.S. budget deficit, China has become America's banker. But this is only half the story: Today, these two giants are now more dependent on each other than ever before.

In the short term, a reinvigorated American economy is critical for China to re-energize its listless export sector and protect its trillions of dollar-denominated investments. And in the longer term, a fundamental restructuring of the bilateral relationship is crucial. Economic and environmental issues have pushed to the top of the agenda, moving ahead of traditionally flammable subjects like Taiwan, Tibet, and human rights.

The U.S. president will not lack for challenges to tackle in China. The five most difficult issues he faces include open markets, energy and climate change, military ties, currency, and yes, those touchy issues of Taiwan, Tibet, and China's treatment of its own people.

1. Open Markets

Obama won himself few friends in Beijing when he imposed 35 percent tariffs on the import of low-end Chinese tires in September, and his administration's  preliminary decision to implement tariffs on Chinese steel pipe this month didn't help much either.

Yet the headlines screaming "trade war" may have been premature. China thus far has been disciplined in confining retaliation to the World Trade Organization's dispute resolution mechanisms. Its initial moves against the US poultry and auto industries have followed WTO procedures, although the business community is maintaining a wait-and-see attitude.

These U.S. decisions make convincing China that Obama is fully committed to free and open markets tougher. He knows Chinese markets - China's economy is set to grow by 8.5 percent this year and 9 percent in 2010 -- are some of the few in the world seeing rapid growth. But he will face a skeptical audience as he works to open Chinese markets for U.S. businesses, which would mean jobs and profits for America.

Conversely, China needs to show it is truly committed to fair competition. Lax intellectual property rights enforcement on everything from pharmaceuticals to software threatens U.S. companies in China, while stifling innovation by both Chinese and American firms. And Chinese technical specification restrictions on products, such as for information and communications technology, often appear to be designed to keep out U.S. competition.

2. Energy and Climate Change         

It's now clear that Obama's original visions of hard carbon emission caps for China -- and the United States -- will not happen before this year's Copenhagen climate-change conference in December. Nevertheless, Obama may need at least symbolic commitments from his Chinese counterparts to bring blue dog Democrats on board for the pending cap-and-trade legislation -- much less the GOP. His scaled-back goal should be a framework for negotiation with the Chinese.

Despite well-documented problems, China has made serious strides on the environment in recent years. Its top-down legislature has quickly moved forward on a host of positive environmental priorities. These include rapidly growing its wind and solar energy sectors and expanding its clean gases buses in Beijing, the largest fleet in the world. But the biggest problem remains that reducing the expansion of carbon emissions is far different from reducing actual emissions.

3. Closer Military-to-Military Ties

U.S. military ties with Beijing have become a necessity for both sides. Military-to-military contact builds familiarity, reduces the chance for misinterpretation of actions, and promotes shared strategic objectives.

President Obama continues to seek China's cooperation in fighting terrorism, much as the Bush administration did. Perhaps even more importantly, the Obama administration is also looking for help dealing with North Korea and pushing forward a robust nonproliferation plan to tackle potentially difficult situations in countries like Pakistan.

Nonetheless, the Obama administration has serious concerns about the transparency of China's rapidly growing military budget, while Beijing has expressed irritation at some American surveillance activity and missile sales to Taiwan. When problems arise in the latter two areas, Beijing has tended to break off contact, resulting in what U.S. Secretary of Defense Robert Gates refers to as "on-again, off-again" relations. Obama's task here will be to develop a more durable framework for military engagement.

4. Currency and Deficits

The U.S.-China trade imbalance has caused significant tension over the years. To finance its trade surplus, China underwrites Washington's deficit spending through vast holdings of U.S. dollars, making the skyrocketing U.S. deficit a point of contention. In turn, the United States continues to pressure China to move towards a more freely floating currency. In the year and a half before the Olympics, the Chinese renminbi appreciated about 20 percent against the U.S. dollar -- but has since frozen in its tracks.

Yet three factors will push both sides toward pragmatism. First, the huge increase in the U.S.-China trade deficit has primarily replaced those that have closed with other East Asian countries; the U.S. trade deficit with the region isn't greater than it was before, it's just allocated differently. Second, although U.S. spending deficits cause China anxiety, Beijing holds far too many dollars to start a selloff without destroying its own economy. Third, the recent U.S. dollar slump has pulled the Chinese renminbi down with it. Thus, China's currency policy affects the European Union, Japan, and other countries far more than it does the United States.

The two countries understand one another on these issues, even if they don't fully see eye to eye. Obama does have constituencies -- such as U.S. manufacturers who complain that China's is manipulating its currency to compete unfairly -- clambering for tough talk, as do the Chinese. Even more important than domestic political considerations, though, China and the United States will need to figure out a way to reduce global trade imbalances, thus easing long-term downward pressure on the dollar. Americans are already consuming less and saving more, but this will need to be sustainable with China also figuring out how its citizens can pick up the purchasing slack -- a goal the government has already acknowledged.

5. Traditional Sticking Points

U.S. Secretary of State Hillary Clinton sent a clear signal about the Obama administration's stance on Tibet, Taiwan, and human rights during her Asia swing in February when she told reporters, "Successive administrations and Chinese governments have been poised back and forth on these issues, and we have to continue to press them. But our pressing on those issues can't interfere with the global economic crisis, the global climate change crisis and the security crisis."

While many American groups may not be pleased with the approach, don't expect to hear the fiery public rhetoric of previous administrations. Obama may still press Beijing on these topics, but he favors quiet diplomacy, which often works better when dealing with China.

Big Picture

For President Obama, his first China visit is full of challenges, but is critically important. China is arguably America's most important economic partner at a time when the economy looms larger than any other issue. The ability of U.S. firms to tap into China's market potential will impact the U.S. economy in the short and long terms. And this may be his last opportunity to make progress on carbon emissions negotiations ahead of the critical Copenhagen climate change talks. Throw in his military and nonproliferation agenda and President Obama's four days in China promise to be busy indeed.

SAUL LOEB/AFP/Getty Images