America’s costly efforts at nation-building in Afghanistan and Iraq came under intense scrutiny this month in critical reports and a gloomy Senate hearing that prompted a memorable assertion. “If there is any nation in the world that really needs nation-building right now, it is the United States.”

That came from a Democratic Senator, Jim Webb, who continued: “When we are putting hundreds of billions of dollars into infrastructure in another country, it should only be done if we can articulate a vital national interest because we quite frankly need to be doing a lot more of that here.”

Webb spoke at the confirmation hearing of the veteran diplomat President Barack Obama nominated to be his next ambassador to Afghanistan, Ryan Crocker, who faced questions from the Senate Foreign Relations Committee that left no doubt over the growing impatience of U.S. lawmakers with a military and financial commitment that is producing limited progress.

Webb’s juxtaposition of spending on Afghanistan and the state of things in the United States – a stalled economy, stubborn unemployment, an aging infrastructure – is made more often in online debates and private conversations than in official hearings. But it is a subtext for a debate likely to grow in the campaign for the 2012 elections and feature both Afghanistan and Iraq as money pits, object lessons for ill-conceived development projects, and lack of foresighted planning.

A report by the bi-partisan Commission on Wartime Contracting issued early in June set the tone. “U.S. troop withdrawals from Afghanistan are scheduled to begin in July 2011, and the U.S. military presence in Iraq is scheduled to end by December 31, 2011. But America will leave many legacies in both countries carrying large sustainment costs long into the future.”

The commission, the report said, saw no sign that the Pentagon, the State Department and the U.S. Agency for International Development were making plans to make sure that the governments of Iraq and Afghanistan could operate and maintain, on their own, the vast array of projects built under U.S. government contracts, from schools and clinics to hospitals and power plants.

An examination of a decade’s wartime contracting in the two countries, says the report, had identified tens of billions of dollars of waste. Unless the U.S. paid prompt attention to the “how to” of maintaining, operating and paying for the projects it will leave behind, “the United States faces new waves of waste in Iraq and Afghanistan.”

One example of money already wasted, and beginning to waste even more: the Kabul Power Plant, built with $300 million in American taxpayer money. “It is little used and the cost to operate and maintain it is too great for the Afghan government to sustain from its own resources.”

WHAT SUSTAINABILITY?

That raises a question: what resources? According to a World Bank estimate, 97 percent of Afghanistan’s gross domestic product (GDP) comes from “spending related to the international military and donor community presence.” Annual government revenues run to around $2.5 billion, funding the Afghan security forces costs more than twice as much.

The word “sustainability” sounds very much out of place in this context though it is sprinkled liberally through the Contracting Commission’s report as well as a report issued a week later by the Senate Foreign Relations Committee. It focused solely on Afghanistan and questioned the long-held theory that development projects in conflict zones helps to stabilize them.

That report pointed out that Afghanistan now receives more U.S. civilian assistance ($320 million a month) than any other country and it addressed a problem which looks more difficult to solve than any other: “Foreign aid, when misspent, can fuel corruption …”

No doubt about that. Both in Afghanistan and Iraq corruption is the stuff of legend, featuring tales of government officials becoming multi-millionaires, warlords getting kickbacks for allowing development projects to go forward, contractors for the U.S. government over-billing to the tune of tens of millions of dollars, suitcases stuffed with $100 notes being shipped out of Kabul airport, newly-rich Iraqis and Afghans buying extravagant mansions in Dubai. In Kabul, the word for this is “Afghaniscam”

Things are not getting better, notwithstanding dire warnings about the corrosive effect of badly-spent aid. In 2008, the year the Commission on Wartime Contracting was set up in response to reports on vast misappropriations in Afghanistan and Iraq, the two countries ranked 176th and 178th out of 180 on a widely-respected corruption index. It is put out annually by the Berlin-based watchdog group Transparency International.

On the 2010 list (of 178 countries), Iraq ranks 175th and Afghanistan 176th. Myanmar and Somalia occupy the bottom slots.

Which helps explain the frustration about nation-building priorities Senator Webb expressed at the Senate hearing. He was one of the two senators who introduced a bill, in 2007, that led to the establishment of the Commission on Wartime Contracting.

Its members need not fear running out of work.

(You can contact the author at Debusmann@Reuters)