OPERATOR: Good afternoon, and thank you for standing by. At this time, all lines have been placed on a listen-only mode until we open for questions and answers. Also today’s conference is being recorded. If anyone has any objectives, please disconnect at this time.
I would now like to turn the call over to Mr. Mark Toner. Sir, you may begin.
MR. TONER: Thank you very much. And thanks, everyone, for joining us this afternoon. We’re very happy to have with us Special Representative for Afghanistan and Pakistan Ambassador Marc Grossman as well as the U.S. Agency for International Development Administrator Raj Shah. And they’re here to talk to us today about – both about the civilian surge as well as U.S. assistance to Afghanistan.
Just a reminder that today’s call is on the record. And at that – at this point, I’ll just hand it over to Ambassador Grossman. Marc, go ahead.
AMBASSADOR GROSSMAN: Good. Thank you, Mark, and welcome everybody. I appreciate the opportunity – both Raj and I do – to be with you for a few minutes this afternoon. Our plan is that I would just make a few opening remarks and then turn it over to the Administrator to talk a little bit about where we stand with civilian assistance, and then we’re very glad to take your questions at the end of those comments.
I’d just like to make a quick overview, and that is to set the context in which we are working here, which is, first and foremost, obviously, to try to meet the President’s goal to disrupt, dismantle, and defeat al-Qaida and prevent it from threatening America, the United States. And this is our policy in Afghanistan: to make sure that they can’t attack us, our friends, or our allies.
Since I have come to this job, now about three or four months ago, my guidance has been really from Secretary Clinton’s speech February the 18th to the Asia Society, in which you’ll recall she talked about the importance of the three efforts that we’re making concurrently in Afghanistan: a military effort, which we believe has been effective and needs to continue; second, a civilian surge, which both of us will talk about today and which we are also very proud of and think has made a very big impact on Afghanistan, and I’d say also on the region; and then third, as you’ll recall from the Secretary’s speech, the creation of a diplomatic effort, a diplomatic surge, to see if we can’t find a way to support an Afghan-led reconciliation process to bring peace to this country that’s had so much war over the past 10, and indeed 30 years.
As the Secretary said in her speech, we’re trying to pursue that diplomatic effort both in terms of an Afghan-led reconciliation process and also with regional diplomacy to bring all of the countries in and around Afghanistan to work with the Afghans. As I say, they try to bring reconciliation to their own country.
If I might just say, and Raj will give you the proper details and analysis, I might just say that from my perspective we are very proud of the civilian surge. And I must say, as the Special Representative for Afghanistan and Pakistan, we’re especially proud of the people who work in this surge. I mean, if you consider that in 2009 there were 320 American civilians in Afghanistan, Secretary Clinton promised that number was going to go up, and we’re now at 1,131 people today. Four hundred and eight of those people are in the field working directly with our military forces in the most difficult circumstances. And I say we’re proud of them, we’re proud of the work they do, and we think it’s extremely important.
The other thing I think that’s important here is that this isn’t – I recognize that the end of some of the newspaper stories yesterday a question came about the whole-of-government. But we have 10 agencies and entities in the United States of America represented among those civilians, and we’re proud of that, too. That together, all across government, we’re working on behalf of the objectives that the President has set out and Secretary Clinton in her speech.
I thought that yesterday, both the work that Mark Toner did here at the State Department and the spokesperson at the White House, to just reflect that we certainly find a lot in the report of the Senate Foreign Relations Committee to welcome, even though we don’t endorse all of it, and to note that, as they did, that Afghanistan has made a huge amount of progress and that I think you don’t have to go much further than the statement that President Obama made on Monday: We’ve broken the Taliban’s momentum, training Afghan forces, turnover security lead to Afghan forces between the drawdown that begins in July and 2000 – I’m sorry, and the Lisbon agreements at 2014. And both spokespeople talked about the importance of the civilian assistance as part of that effort. And so the White House and the State Department, and I know that you’ve had the opportunity to see the letter from Deputy Secretary Nides and also the letter from Administrator Shah with some of the more specific items that we have to make sure that people understand the importance of this civilian effort to our overall policy in Afghanistan.
And with that, I’d be glad to turn it over to the Administrator for his comments and some more specific examples.
ADMINISTRATOR SHAH: Well, thank you, Ambassador. And I just want to add a few thoughts from the perspective of – from a development perspective. But first, I want to thank everyone for their interest in this discussion and look forward to a few questions as well.
I think it’s important to step back and recognize that over the course of the last decade Afghanistan has made important improvements and achievements in its own development. Its economy has grown at approximately 10 percent per year, resulting in significant growth and resulting in improved government revenue collection. This year, it will be around $1.65 billion which represents a 400 percent increase in customs revenue since 2006 alone. That’s just one example of a result of a partnership we’ve had with the Ministry of Finance and with their revenue team to make sure that they can generate resources to make the kinds of investments that have been made in Afghanistan using domestic sources. We’ve also noted that in 2002, Afghan government institutions were often not functional. Many ministries lacked electricity, telecommunications, basic capacity to oversee programs.
Today, we’ve worked aggressively with health, education, agriculture, the rural development ministry, mining, and so many others to really help them build real capacity, help train more than 16,000 Afghan civil servants that are employed in those ministries, and have helped build out the capacity of teachers and health workers and service providers across the country in a way that’s generating real results. And we see those results every day. We see that 7 million kids are now in school, nearly 35 percent of whom are girls. That’s up from 900,000 kids in school, most of whom were boys, under the Taliban. We see health services that have reached 64 percent of the population, resulting in probably some of the most dramatic gains in life expectancy and reductions in infant mortality and child mortality that you’ll see anywhere in the world.
So it’s important to just understand the context of significant achievement linked very closely to the expenditure of U.S. resources and through the partnership that we’ve been able to sustain over the past decade.
The second point I’d like to make is that when I took this role on about 18 months ago, the President and the Secretary asked us to focus aggressively on making sure these gains were sustainable and durable. And defining our objective from a development perspective is making sure the Afghan government and people had the basic capacity to protect themselves and ensure their security, but not to expect that we could do things that would not – not to make investments that they couldn’t sustain over time.
And as result, we’ve implemented a very aggressive series of reforms over that time. We’ve now shifted our funding so that nearly 38 percent of that – our resources go to and through Afghan institutions. We focus very much on building out capacity of government organizations, and we work on significant anticorruption efforts to make sure that those governments have basic credibility as they’re conducting their work – programs like the enormously successful National Solidarity Program has reached more than 22,000 Afghan villages, and I’ve had the chance to personally visit some and see the schools and the local governance and the local roads, more than 1,800 kilometers of which have been built – that have been built with our support but also with our efforts to get other funders around the world, including the Afghan people themselves, to support these programs.
We’ve also stepped up our efforts to improve accountability. Ambassador Grossman mentioned the numbers of staff that have increased, but today we have more USAID staff in the field outside of Kabul than we had in all of Afghanistan two years ago. And this has allowed us to implement the A3 initiative, which is our Accountable Assistance for Afghanistan program, that’s resulted in a significant number of suspension and debarment actions. It’s allowed us to improve the auditing of locally incurred costs, and it’s allowed us to more aggressively vet our partners and their subcontractors to make sure that resources don’t go into the wrong hands. All of these efforts are time consuming and require the diligence and often require our people to take real personal risks and make real personal sacrifices.
But we do these things – and I think this is the third and final point for me – we do these things because it is part of an integrated civilian and military plan that is designed to help Afghanistan sustain the security gains, the development gains, and the slow but important governance improvements that we’ve all seen over the course of this decade. And ultimately, that’s the pathway that will allow us to have an effective reduction of our presence there and allow the Afghan people to sustain some of the gains that have been made.
Just one last comment on the SFRC report that was – generated some news yesterday. While we do endorse some of the basic findings – in fact, the call for more sustainability and durability in the assistance that’s provided is something President Obama and Secretary Clinton have been calling for for the past two years and something that we’ve put in place in a very aggressive manner. We also didn’t agree with all of the report. There’s clearly some components, especially the critique of an integrated civ-mil strategy, that I would not agree with. I’ve had the chance to visit the Arghandab Valley and see some of our agricultural assistance programs literally improve the security environment so that our troops don’t have to conduct kinetic operations, and we know that that saves American lives and improves American national security.
So we will continue to work on spending our resources in an efficient and effective way, work in an integrated civilian-military effort to improve our national security, and focus on achieving results that can be sustained. And we have no illusion that the work in Afghanistan is obviously more difficult than elsewhere. It is an environment where there’s a war going on, where we lose staff who take great risks to be out there doing this work to protect the American people, and we have no illusions about how challenging it is. And so I look forward to your comments and questions.
MR. TONER: Thank you very much, and we’ll open it up to questions now. And just a reminder to give your name and your media affiliation.
OPERATOR: Thank you. At this time, if anyone has a question, please press *1 on your touchtone phone. Again, *1 to ask a question. Our first question comes from Anne Gearan from the Associated Press. Your line is open.
QUESTION: Hi. Ambassador Grossman, do you disagree with the main conclusion of the SFRC report that Afghanistan is at risk of falling into a financial crisis when foreign forces leave in 2014? And more basically to both of you, has – have the American taxpayers gotten their money’s worth for that nearly 19 billion that the report accounts being spent over the last 10 years.
AMBASSADOR GROSSMAN: Good, Anne. First of all, thank you very much for your question. In terms of the sustainability (inaudible) drawdown, this is obviously something that we’re paying a huge amount of attention to. (Inaudible) highlights this is certainly no surprise to us. As you know Deputy Secretary (inaudible) on his agenda, and we are all looking for ways to make sure that there is some way to keep focused on future investments in the Afghan economy.
One of the things that I would say is that – one of the things that’s important to me is that we now also – in addition to the excellent, excellent effort that AID is making, the long-term sustainability is also about the private sector. It’s also about foreign direct investment, and Raj and I yesterday participated in some work to try to think through how that might look in the future. So I think that sustainability is hugely important, that it’s right to look at this issue. We appreciate that they’ve raised it. It was something that we had been working on as well, and I would add to the – kind of part of the answer to this question going forward I hope will be private sector, foreign direct investment, taking advantage of some of the mineral wealth that Afghanistan has so that it isn’t just sustainability, but that it’s sustainability with some success as well. I’ll leave the other part to Raj.
ADMINISTRATOR SHAH: Sure. I would just add on the 19 billion that first I think it’s important to see that in the context of the larger cost and expenditure of an integrated military campaign. And in that context, I think this investment has had some very specific and very real results that lay the groundwork for a stable and secure country that affords an exit strategy for – over time, for U.S. military forces.
And General Petraeus and Secretary Gates and Admiral Mullen have all highlighted the critical priority of our investments to improve development and our efforts to improve governance. While recognizing that that’s a generational task, we know that those are some of the smartest investments we can make to both help end quickly and over a reasonable period of time this current military engagement and to prevent similar situations in the future. And in that context, these investments that we make in development in Afghanistan and around the world are an efficient and important part of our national security strategy.
MR. TONER: Next question.
OPERATOR: Thank you. Our next question comes from Elise Labott from CNN. Your line is open.
QUESTION: Thank you both for doing this. I’d like to talk to – specifically about one of the projects and then just a little bit more broadly. For instance, Senator McCaskill was talking about this – the idea that some of these projects – they called them like going down a rat hole, particularly (inaudible) electricity plant – the power plant in Kabul, in terms of, like, not only are these programs not sustainable but years down like whether they’re really needed and those types of things. And I was just wondering, when you consider sustained – if you could talk specifically about this power plant that they address. But just in more generally, when you think about sustainability, are you – when you’re planning projects – I mean, I know the idea is to do it in – of line with what the Afghans’ assessment needs, but if you could talk a little bit more about how you work through the sustainability issues in terms of helping them develop programs, not just – not developing programs and then make sure they have the capacity, but developing programs with capacity in mind.
ADMINISTRATOR SHAH: Well, this is Raj, and I want to thank you for the question, because our team has really aggressively conducted what we’ve called a sufficiency audit of USAID programming in Afghanistan to ensure that our programs and projects incorporate a strong sustainability strategy and from the beginning of the design of those programs. So to give an example from the energy sector, as we’ve developed a comprehensive energy strategy with the Afghan Government and under their leadership, it’s a strategy that includes the Tarakhil project that is the one I think you are referring to.
ADMINISTRATOR SHAH: But it also includes capacity to bring power in from the north and to generate more power and improve distribution in Kandahar and other parts of the south. And it’s a strategy that’s designed to enable foreign direct investment and economic growth because those are the things that will sustain Afghanistan after U.S. and international resources are drawn down.
The sufficiency audit was very important because it led to issues where we would do things, like with our energy sector program we’re working aggressively with DABS, the energy utility in Afghanistan to help them implement these projects and to help them put in place a pricing structure and a revenue collection structure so they can collect revenue and reinvest in ongoing maintenance and in new infrastructure projects. And that’s how energy sectors work everywhere in the world.
So you’re absolutely right. We should not be providing endless energy. We should be in the business of building institutions and helping them sustain the gains they’ve already seen and the growth that they expect, and that’s exactly what we’re doing in the energy sector. It’s what we’re also doing in health and education and agriculture. In each of those areas, we’ve worked – just over the last 18 months to transition programs to the Afghan government to transition financing to other donors and to local Afghan partners and to build their own capacities to collect revenues to pay for these things in an ongoing way.
QUESTION: Thanks, Raj.
MR. TONER: Next question.
OPERATOR: Thank you. Our next question comes from Ken Dilanian from LA Times. Your line is open.
QUESTION: I have a broad question and a more granular question. The broad question is: Two years ago Secretary Clinton said that aid to Afghanistan had been – she used the term heartbreaking failure, and she promised to turn it around. And despite the changes that you guys have made and documented, doesn’t this Senate report sort of show that you’ve essentially doubled down on a flawed strategy? I mean, isn’t it true that the same criticism Secretary Clinton two years ago leveled against the Bush Administration’s Afghan aid programs – too much done through contractors, too many contracting layers, not enough oversight, white elephant projects – are documented in this report and also by SIGAR and by the Wartime Contracting Commission?
And then my more specific question is: You guys often talk about girls in school today, and did again today, as one of the major achievements of aid – civilian aid in Afghanistan. But there was this IG audit last October of the PACE-A program which targets girls in rural areas, and it suggested that the effort may not be all it’s cracked up to be. The audit found that only three percent of teachers in the sample had received proper training, and therefore student test scores for reading were at unacceptably low levels. So doesn’t that suggest that we can’t really be sure that the successes are real?
ADMINISTRATOR SHAH: Well, let me address both of those. On the first point, I think it’s important to go back to Secretary Clinton’s points, because two years I think her description of where this effort was was accurate. And she was disappointed in the amount of reliance on contractors and the lack of an ability to articulate the clear results. Now, we’re not going to change that overnight, but we’ve made an aggressive hard pivot, which is why we’ve gone from 8 or 9 percent funding to the Afghan Government to 38 percent. And we’ve done that in a way that is first carefully vetting the specific ministries we can work with and putting, as we’ve done in the Ministry of Public Health, enough capacity in to be able to track how resources are spent, and do so in an accountable way.
The Senate report, I think, had some misperceptions about the overall effort. I think they said 97 percent of the GDP – it comes from U.S. assistance and contracting. That’s just not accurate. And the claim that 80 percent of our resources were spent on stabilization programs also, we felt, was not an accurate description of the current balance.
But I would just say we’ve made an aggressive move here to get the resources to build more local capacity, and we are seeing direct results for it. We are seeing that in health, we’re seeing that in education, we’re seeing that in civil service and civil servants and the capacity to do that. But building governance is not something that’s going to happen in 18 months. And President Obama has said it’s a generational effort. Secretary Clinton understands and values the efforts we’re making to kind of have a smart medium- and long-term strategy here.
On girls in school and kids in school and learning, I do think this is a dramatic success story the American taxpayers can be incredibly proud of to have millions of girls in school with access to education. We always want schools to perform better here and around the world, and certainly the PACE-A program has made some real strides in teacher training. And in fact, a recent review showed really strong outcomes in their teacher training efforts, although at a higher cost than what we’d like to see.
And so the sample that you’re referring to is actually a very small sample of the overall teacher training effort, and we’ve made a series of reforms to teacher training to make sure that more of that is done through the Ministry of Education using their standards across the country. And we’ve helped to elevate those standards, and we’re now putting in place the testing of children and their reading skills and literacy skills so we can assess performance.
And that’s exactly the kind of thing we should be doing, learning about what works and doesn't work and making those changes.
MR. TONER: Thank you. Next question. And we have time for just a couple more questions.
OPERATOR: Thank you. Our next question comes from Susan Cornwell from Reuters. Your line is open.
QUESTION: Yeah. Hi. Just first of all, I’d like to confirm that that was Mr. Shah just speaking the last answer. I think it was.
ADMINISTRATOR SHAH: Yes.
QUESTION: Good. Secondly – well, I actually have two questions. One is: Are you concerned that this Senate report coming out when it has set you up for budget cuts because there’s a lot of, as you know, interest in cutting budgets on Capitol Hill right now? And are you worried about that now, the timing of that, that they may come back now and say it’s time to cut money from the civilian surge?
And that really leads to the second question, which is: What is the trajectory now for the civilian surge? I didn’t hear you use those words, actually, but is it being wound down now? Will it be wound down as U.S. troops leave Afghanistan, or will it actually – is it still actually growing or will it go on for a while?
ADMINISTRATOR SHAH: Well, let me offer just two comments and then perhaps Ambassador Grossman may add to that. The SFRC report was actually laying the groundwork for a multiyear civilian assistance approach, and it says that near the beginning of the report. And I agree with many of its findings that we want to have a sustainable, results-oriented, accountable development partnership with the people of Afghanistan over a multiyear timeframe.
Ultimately, when you look at the costs and when I addressed your point about the budget, it is – this is a challenging budget environment and we’re all trying to work together to do the right thing for American taxpayers and improve our national security. But to look at the civilian assistance portion, which is an absolutely small portion of the overall investment in Afghanistan and the total global investment in our efforts to improve our national security, this is – it is not a reasonable proposition that you’re going to get big savings there. In fact, as General Petraeus, Secretary Gates, and Admiral Mullen have all said, I think very eloquently, those important civilian assistance investments enable us to have an exit strategy for U.S. troops over time and to save significant resources and to improve our national security.
On the civilian surge, I would just say that it’s important for us. We’ve learned in the past what’s happened in Afghanistan when we have cut off our productive development partnerships, and we don’t want to repeat that effort. We want to maintain an approach that allows us to have a real sustainable development strategy in the context of a secure and stable country.
And I’ll see if Ambassador Grossman would like to add to that.
AMBASSADOR GROSSMAN: Yeah. Thanks, Raj. Just let me take a moment on your second question on the trajectory. I’d say that at the moment we are kind of reaching the height of the civilian surge now. We’ve – as I said in my introduction, we’ve tripled the number of U.S. civilian employees on the ground in Afghanistan, and there are a certain number yet to come, I think in the couple of hundreds. But I think once we’re there, we will have reached about the peak of the civilian effort.
How quickly it goes down, I’m not prepared to say at this point. Obviously, there’s – as Ambassador Crocker said yesterday in his confirmation hearing, there’s a huge amount of work to do. But in terms of it growing like it’s grown in the past, as I said, I think we’re kind of at about as high as we’re going to go here, within a couple of hundred.
QUESTION: Thank you.
MR. TONER: Thank you. And just one last question.
OPERATOR: Thank you. Gareth Porter from Inter Press Service, your line is open.
QUESTION: Thank you. I’d like to ask just what your theory is concerning the relationship between development or other types of assistance, civilian assistance, and the state of the insurgency or security. The report criticizes past assumptions underlying the aid efforts, saying that it was based on the assumption that poverty and lack of government presence were the problems, only to find out that the problem was a lack of governance. So can you be specific about what your assumptions are about the linkage between the assistance programs or assistance efforts and the state of the insurgency or security?
ADMINISTRATOR SHAH: Well, this is Raj, and, again, I’ll start and see if Marc would like to close out for us. But I would just say that I think it’s become very, very clear that we have to have an integrated civilian and military strategy in Afghanistan. There’s just no question that an insurgency, and, in this case, one that has real threats to the United States, can be defeated with military efforts alone. And similarly, it would be ineffective to have a development partnership that would help achieve real results without basic security.
I think, over the past two years, I’ve seen a huge improvement in the way the civilian and military partners work together and having a common strategic objective and having a common goal of building effective local governance – not eradicating poverty; that’s not a reasonable objective – but having the basic sense of development progress that gives people an alternative and some opportunity as opposed to relying on or going back to the Taliban.
And we’ve seen real results from that. I’ve personally walked through communities where our programs, whether they are in agriculture or road infrastructure or irrigation, have helped improve stability to the point where communities can come together, they can form plans, and invest in their future and in their children and do so in a peaceful and productive way with the United States and with a range of other development partners from around the world.
So I’ll see if Marc would like to add to that, but I think our theory has been validated that you got to have an integrated civilian and military approach.
AMBASSADOR GROSSMAN: Thank you very much, Raj. Just to say that your question and the point that Raj made just allows me to kind of end where I started, which was to go back to kind of the three parts of the strategy that the Secretary laid out on the 18th of February – a military effort; a civilian effort, which we have tried to talk a little bit about today; and this diplomatic effort to support Afghan-led reconciliation. And just as Raj said that the intimate connections between kind of what we’re doing across these areas – one supports another. Whenever I’ve spoken about the three efforts here – military, civilian, and diplomatic – it isn’t that one kind of jumps ahead or supersedes the other, can succeed without the other; they need to kind of move together, and that’s what we have been trying to do.
And so the fact that we are both here today trying to answer your questions and we’ve tried to operate this in a way that takes into account all of the pieces that will be required to have a stable and successful and prosperous Afghanistan – I’ll say I think the three things move together – that’s been our objective and it’ll be our objective going forward.
MR. TONER: Thank you. And thanks to all of you for joining us, and just a thanks – thank you, once again, to Ambassador Grossman and Administrator Shah for taking time out this afternoon.
Have a great day, everyone.
OPERATOR: Thank you. That concludes today’s conference. You may disconnect at this time.