Tags: afghanistan | economic | prospects | war | poverty

How War and Politics Have Threatened Afghanistan's Economic Prospects

puzzle with the national flag of afghanistan and usa dollar banknote .

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By    |   Monday, 05 November 2018 09:54 AM

Thinking about Afghanistan’s economic prospects, I checked some figures and found that Afghans constitute about 2.3 percent of humanity. I also discovered that Afghanistan’s economy amounts to about 0.03 percent of the world economy. In terms of the global economic activity, Afghanistan’s is a drop in the ocean.

However, I also realized that behind those seemingly irrelevant numbers are some 35 million lives with their unfulfilled needs.

I imagined an Afghan mother looking out of a window watching her children play. Suddenly, that innocent scene darkens. What can she offer them to eat when dusk descends, and they, tired and hungry, come inside? 

That expression of hunger in the questioning eyes of Afghan children, and the pain in the hearts of their mothers is a constant reality for a great number of Afghans.

War and politics have shaped Afghanistan’s economic conditions.

After the Taliban was defeated, its warriors turned into insurgents, forcing the U.S. and its allies to fight a guerrilla war for which they were unprepared, and which they still find difficult to overwhelm.

This long-running insurgency is the aftereffect of bizarre political mistakes that delivered the future of Afghanistan into the hands of warlords and drug kingpins, planting the seeds for a predatory government. The Afghan people’s future was henceforward predestined to be a life of domination, exploitation, and poverty.

High officials and strongmen took out of the country billions of dollars through Kabul International Airport. Disregarding exist procedures, they drove straight to the plane. Surrounded by their gun-toting guards, no one, who wished to stay alive, dared to inquire what they had packed in all those cases.

According to the U.N., poverty has risen from 38 to 43 percent. SIGAR reports that the government controls only 55.5 percent of the country’s districts, the lowest level since 2015. Alone during Mr. Ghani’s presidency, 409,415 Afghans have fled their country and asked for asylum in the EU.

As everyone probably knows, the economy cannot develop independently of the country’s politics, the law, and the correct and timely implementation of the law. In this context, Afghanistan is possibly on the top of the heap of the worst contenders.

Afghanistan is, as it has been for the past 17 years, completely dependent on foreign financial support. The U.S. and its allies pay for all the cost of the Afghan military and police forces and, at least, 80 percent of the country’s civilian expenses.

The Afghan government has failed to revive the economy to gradually wean off the country from its total financial dependence.

Where there were some possibilities to move in that direction, the corruption and incompetence of officials have caused the breakdown of those possibilities. Here are three examples:

  1. The World Bank agreed to finance the repair and rehabilitation of Naghloo, Afghanistan’s largest hydroelectric power plant.

An American firm’s Afghan subsidiary and a Russian company wrote the proposal and won the bid. The job was to be completed by the end of 2010.

The U.S.-based firm had brought in the Russian company for the simple reason that it had built the plant during Soviet times and still had the blueprints and the origin of all the equipment. It was hoped that the Russian company’s knowledge of the plant would render the repairs less costly and more efficiently.

The then minister of energy and water demanded a bribe which the American firm and its Afghan subsidiary declined. Persuading the Russian company to break up with the American firm’s Afghan subsidiary, the minister signed the contract with the Russians.

This breach was immediately reported to the World Bank. For reasons unknown, the World Bank took no action. Despite the American company’s and its Afghan subsidiary’s repeated warnings that the Russian company was not doing the work according to bid conditions, the World Bank cloaked itself in silence, refusing to remedy the situation.The Russian contractor failed to complete the job by the end of 2010.

As far as could be ascertained, the World Bank has paid all, or most, of the contract amount to the Russian contractor on the strength of the minister’s certification. As of this date, the work remains incomplete, and the World Bank has agreed to pay another USD82 million to the same company to finish the work.

During this time of corruption and mismanagement, Afghanistan was importing, and continues to import, electricity from Central Asia. The U.S. and its allies pay for it.

  1. The bidding for the rights to the Hajigak iron ore mine, the largest untouched mine in the world, took place in September 2011. It was rumored that then President Hamid Karzai and his minister of mines had made a deal for an Indian consortium to win. When it was found that the only valid bid was an American proposal, the matter was delayed and, still remains in abeyance.

This project would have brought about USD1.5 billion in foreign investment and could have created about 20,000 jobs.

  1. The president of Colorado-based Aspect Energy flew to Kabul to negotiate the rights to the largest oil prospect in the north of Afghanistan. Rejecting corrupt demands form the Karzai’s, the American proposal was withdrawn, and the property was given to then President Hamid Karzai’s nephew. Mr. Karzai’s nephew has been reported to had been caught selling heroin in New York and spending 10 years in a U.S. federal prison. As expectedly, the contract is in default.

So, what is to be done?

If the U.S. and its allies believe Afghanistan is not yet ready to withdraw from, they must take direct control of Afghanistan’s reconstruction and economy. Otherwise, they must pay for that country’s expenses until the cows come home.

Nasir Shansab has maintained homes, business interests and dual citizenship in both the United States and Afghanistan for the past three decades.

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NasirShansab
If the U.S. and its allies believe Afghanistan is not yet ready to withdraw from, they must take direct control of Afghanistan’s reconstruction and economy. Otherwise, they must pay for that country’s expenses until the cows come home.
afghanistan, economic, prospects, war, poverty
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2018-54-05
Monday, 05 November 2018 09:54 AM
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