Afghanistan: rebuilding the economy
An Afghan man harvests wheat on the outskirts of Kabul, Afghanistan July 11, 2016.
Despite improvements in life expectancy, incomes, and literacy since 2001, the landlocked country is extremely poor which is ranked 38th among 43 countries in the Asia-Pacific region with its overall score below the regional and world averages. With its living standards among the lowest in the world, the country’s fifty three percent of the overall population still live under the poverty line.
A major portion of the Afghan population continues to suffer from shortages of housing, clean drinking water, electricity, medical care, and jobs. Agriculture is the main source of income. The major food crops include: corn, rice, barley, wheat, vegetables, fruits and nuts. The major industrial crops are: cotton, tobacco, madder, castor beans, and sugar beets. But the economy remains heavily dependent on opium cultivation. In Afghanistan, industry is also based on agriculture and pastoral raw materials. Sheep farming is extremely valuable. The major sheep product exports are wool, and highly prized Karakul skins.
Afghanistan is rich in mineral resources but due to political uncertainty and security issues little of these have been exploited. The rising militant activities of the Afghan Taliban all across Afghanistan remain a major challenge for the government. The Taliban expanded their insurgent activities from North to South and later Central Afghanistan. “The Taliban’s recapturing the strategically vital capital of Kunduz province followed by their intense activities across Faryab, Jawzjan, and Baghaln provinces in the north could hardly allow the government to concentrate on rebuilding the shattered economy”, said Abdul Hakim, former President, FATA Chamber of Commerce and Industry in Peshawar.
This followed some bloody battles in Lashkargah, the capital of Helmand province in the South in 2016. The Taliban’s battle for Tarin Kot, the provincial capital of Urozgan province also gave tough time to the government forces.
In the east, the rising activities of the Islamic State group remained another big challenge. The group carried out devastating attacks in Kabul targeting civilians and the Afghan national army men. The first quarter of the current year saw some bloody attacks by the Islamic State group that speaks for the rising strength of the militant group, which is gaining ground in the country.
“Economic stability is linked with political stability”, said Rifatullah Orakzai, a senior journalist who covers Afghanistan and the bordering region for BBC. “You can’t build economy unless you have a sound politically stable environment”, Mr. Orakzai adds,
The aid-dependent crippled economy coupled with deteriorating law and order situation that weakened the government’s ability to create employment opportunities ultimately led to a mass exodus. These people fled to Europe, Gulf countries, South Asian countries and elsewhere in the world to earn bread. This brain drain ultimately caused shortage of experts and professionals to run the affairs of the state.
People had associated great hopes with former World Bank technocrat President, Ashraf Ghani when he assumed his office in 2014 to rebuild the shattered economy but the internal and external challenges on political stage of the country left him with no option but tackle the law and order situation first.
No doubt corruption, insecurity, weak governance, lack of infrastructure, and the Afghan Government's inability in extending rule of law to all parts of the country pose challenges to future economic growth. However despite all these challenges President Ghani led government is committed to instituting economic reforms by improving revenue collection and fighting corruption.
Moreover, the international community has, so far, pledged over $83 billion at ten donors' conferences between 2003 and 2016. At Brussels Conference in October 2016, the donors pledged an additional $3.8 billion in development aid annually from 2017 to 2020.
In a major breakthrough the government succeeded in signing a peace deal with Hezb-e-Islami, an armed group led by former Afghan Prime Minister Gulbadin Hekmatyar. Moreover the increased connectivity with China and opening of the first rail connection between Afghanistan and Turkmenistan are some of the success stories of the government towards reconstructing the economy.
“To rebuild the economy, the government will need to overcome a number of challenges, including low revenue collection, job creation, high levels of corruption, weak government capacity and poor public infrastructure”, said Dr. Rahmanullah who teaches at the University of Peshawar.
The Afghan government needs to initiate projects that can create employment opportunities in an effort to bring the experts and professionals back home. The government needs to adopt a balanced strategy for both security and development for revitalizing the economy.
07/19/2018 - Any reproduction, copy, transmission or translation of this publication is prohibited.