The U.S. Special Inspector For Afghanistan Reconstruction (SIGAR) released a report warning that pervasive administrative corruption drained Afghan government revenues this past year, and if gone unchecked, the problem could become even worse in the future.
SIGAR's report listed bribery, embezzlement and other forms of corruption as persistent threats to effective administrative functioning at all levels of the Afghan government. It said current Afghan budget expenditures would be impossible to sustain if graft is not addressed and revenues are not increased.
According to SIGAR, the Afghan government set a target of $2.4 billion from the overall 2012-2013 budget to come from domestic sources, but that was undershot by 12 percent. This year, the Afghan government has set a target of $2.5 billion from the total $7.5 billion it has been allocated, but SIGAR predicts it will fall 20 percent short.
The U.S. watchdog has said that if corruption trends are not addressed soon, then the Afghan government would likely only be able to fund one third of its national budget, with the rest being propped-up by international donors. As the NATO coalition prepares to withdraw at the end of the year, and much of the international aid that has flooded over the years begins to dry up, this inability to meet budgetary needs has become a matter of grave concern.
While the SIGAR report focused largely on what the malfeasance and revenue shortfalls meant in relation to U.S. taxpayers and governemnt aid, it also gave extensive focus to how Afghan revenues could be increased through better customs regulation.
According to SIGAR, $60 million per annum is used by organized crime syndicates in Afghanistan for smuggling commodities that would otherwise be taxed by the Afghan government. The report says customs officials that seek help from foreign advisors are sometimes threatened and even kidnapped.
"I talked about customs several times in the media, and there was even a tussle between me and Minister of Finance; we sent a joint delegation consisting of four important representatives, including the Ministry of Finance, to customs houses," said Azizullah Ludin, the former chief of Chief Office of Oversight and Anti-Corruption. "During one year, 839 million AFG were lost at Nangarhar customs and another 3.5 billion AFG was lost at Hairatan customs - the minister of finance must assess these issues, but he says 'Ludin is against me'."
Some experts have said that insufficient oversight has caused corruption to increase, and blame Parliament for failing to act more effectively to stem the tide of graft that has been rising for a number of years.
"The lack of proper monitoring of revenue collections has increased corruption, while our expectations of the National Assembly was that it would closely oversee the process," the Chairman of the Joint Anti-Corruption Monitoring and Evaluation Committee, Mohammad Yassin Osmani, said. "For instance, the Minister of Finance has gotten the authority to certify tariffs, but on the basis of a law that is now against the Constitution."
Corruption has become a major issue that has received greater scrutiny as the U.S. takes stock of the investments it has made in Afghanistan before withdrawing in December. According to SIGAR, corruption is one of, if not the, greatest challenge facing the country, having weakened the Afghan government, undermined its credibility and disrupted real economic growth.
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