afghanistanto intervene. The State Department commissioned a survey by the
Technical Assistance Group (tag) that recommended the u.s. govern-
ment assume financial responsibility for the scheme. The following year
the Afghan government effectively nationalized the project by setting up
the Helmand Valley Authority, later renamed the Helmand-Arghandab
Valley Authority (h ava). From this point the Helmand-Arghandab scheme
was a government -to-government development project with tag and its
subsequent avatar, the United States Agency for International Development
(usaid), handling the American side of the operation. mka’s involvement
was gradu ally phased out and ended in 1959, no doubt to the relief of the
company’s directors and shareholders.
The involvement of the State Department meant the Helmand-
Arghandab project became embroiled in the politics of the Cold War,
for tag was set up under President Truman’s Point Four Program, which
was designed to promote development and counteract Soviet propaganda
that the Western world was not interested in the needs of underdeveloped
countries. State Department funding of h ava thus came with a political
price tag, for in order to receive tag assistance Afghanistan had to sign a
Bilateral Agreement and Mutual Security Pact. In turn these agreements
exacerbated divisions within Mahmud Khan’s cabinet and family. When
Da’ud objected to signing these agreements, he was sacked, although he
was later reinstated.
In 1956 a State Department review of the Helmand-Arghandab project
noted that to date mka and the Afghan government had spent $83 million
on the scheme, but after a decade of investment the financial returns were at
the best modest. 24 Only around 120,000 acres of land had been reclaimed,
though the additional irrigation supplied to pre-h ava farms had led to an
increase in double cropping, higher yields and better crop quality. Exports
of dried and fresh fruit from the region had risen, but the costs of imports
- mostly supplies for the Helmand-Arghandab scheme – had doubled in
four years. The government’s anticipated revenues from the scheme came
in well below expectations and were insufficient to meet repayment of
debt or interest on loans. Indeed, the government was running ‘substantial
deficits’ and was increasingly indebted to the Da Afghanistan Bank as well
as international donors. In all around 20 per cent of Afghanistan’s national
budget and well over half of all development funds were allocated to h ava.
The report, however, noted that it was politically impossible to abandon
the Helmand-Arghandab project since it was ‘inextricably bound up with
American prestige in Afghanistan’, so the State Department committed a
further $47.8 million to the programme in an attempt to fix the problems. 25