Afghanistan's Economy
"Afghanistan's economy, which has been expanding at a steady rate, is likely to slow after 2014. Kabul has little hope of offsetting the coming drop in Western aid and military spending, which have fuelled growth in the construction and service sectors. Its licit agricultural sector and small businesses have also benefited from development projects and assistance from non-governmental organizations, but the country faces high rates of poverty, unemployment, food insecurity, and poppy cultivation."Billions of dollars representing foreign aid has succeeded in making some Afghans wealthy. New businesses have opened in some of the country's cities, and there is an emerging urban middle class. In a nation of 30 million people there are about 20 million mobile phone subscriptions, one symbol of an industry succeeding in advancing people living in an early 20th-Century environment using 21st-Century technology on their way to the future.
James Clapper, U.S. Director of National Intelligence
When international troops leave and international aid is inevitably reduced later in this year Afghanistan's limited revenue sources will leave it in a parlous state. The artificial economy created by years of war cannot be sustained. And the country is not prepared to heave itself out of the looming dilemma, certainly not without the constant influx of continued international funding to enable it the pretense of self sufficiency and adequate government infrastructure.
Continued international aid is critical to their future. Even so, some Afghans warn that large portions of that aid funding has been and will continue to be siphoned off by their own corrupt officials, in a country where corruption is endemic and symbolic of tradition at every level of the economy. The $15-billion in promised international development aid is destined to go the way of previously-received financial aid, very little of it trickling down where it is meant to be useful to the general population.
It has also been pointed out that other beneficiaries of development aid are represented in fact by the hordes of international consultants and contractors whose provision of expertise or services comes at a horrendously inflated cost, draining whatever funds there are for other more necessary and fundamental services benefiting the population. "The money came to Afghanistan but the major portion went back to where it was coming from", was the charge leveled by Kandahar's Governor Tooryalai Wesa.
The Agency Coordinating Body for Afghan Relief, an alliance of 84 international aid agencies investigating the $15-billion aid funding representing the total delivered to Afghanistan since 2001 by various nations, outlined in a 2008 report that 40 percent -- roughly $6-billion -- was returned to donor nations through corporate profits and consultant salaries. "A vast amount of aid is absorbed by high salaries, living, security, transport and accommodation costs for expatriates working for consulting firms of contractors."
Humanitarian aid is an industry, a very well compensated one which purports to give indispensable humanitarian aid where it is desperately needed, but at the same time, it builds its reputation and its reach, and as an industry pays out handsome salaries, rewarding itself for its humanitarian enterprise which international state funding enables. As an example, a full-time expatriate consultant can anticipate earning $250,000 annually; 200 times the average an Afghan government worker's salary.
The American government pointed to billions of dollars smuggled out of Afghanistan representing funds appropriated from aid projects, or the proceeds of the country's illegal drug trade. Well-connected Afghan businessmen and politicians, the 2010 report pointed out, were carrying the cash in suitcases, heading to offshore banks. In 2011, it was estimated that Kabul airport was the conduit for $4.5-billion travelling out of the country.
The Afghan government insists it plans to crack down on future corruption. The U.S. government gave Afghanistan two cash-counting machines for Kabul airport to enable authorities to monitor money leaving the country. The machines were later found covered in dust, stored in a closet.
Labels: Afghanistan, Conflict, Corruption, Crisis Management
posted by Pieface @ Tuesday, February 25, 2014
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