A peace deal in Afghanistan would end a decades-long conflict between the government and the Taliban movement, but in a country, where the armed forces and development projects are funded by foreign countries, the economy of peace might pose its own challenges
KABUL (Pakistan Point News / Sputnik - 21st May, 2019) A peace deal in Afghanistan would end a decades-long conflict between the government and the Taliban movement, but in a country, where the armed forces and development projects are funded by foreign countries, the economy of peace might pose its own challenges.According to a US watchdog, the Special Inspector General for Afghanistan Reconstruction (SIGAR), which monitors US aid to the country, a peace deal would not immediately do away with all the obstacles to economic growth. If peace is established, former militant fighters and refugees returning from neighboring Pakistan would need to be reintegrated in the country's economy, SIGAR's March report on high-risk areas in Afghanistan said. Meanwhile, Afghanistan remains reliant on foreign aid to a great extent.
The current president of the country and former economist of the World Bank, Ashraf Ghani, who has had to contend with deep-rooted political and security problems, has vowed to lead the country toward self-reliance. Many projects have been launched, but they still need to reach completion. The infrastructure, including dams, electricity projects and factories, was all built before the rule of Ghani and even his predecessor Hamid Karzai. Ghani, in his term and with the financial help of India, inaugurated Salma Dam, the project which began to take shape in the 1970s but was stopped because of war.
Shabir Bashiri, the head of Afghanistan Industries, Mines and Investments High Council, believes that Karzai and Ghani did not do a very good job on building infrastructure.
"Despite countless opportunities for the prosperity of Afghanistan since 2001, both ex-president Hamid Karzai and the current in charge Muhammad Ashraf Ghani have failed to take the advantages of foreign aid," Shabir Bashiri, the head of investment mines and industries council told Sputnik.
Bashiri added that Ghani had been "unsuccessful in lowering level of poverty, increasing employment, balancing exports and imports."
"If both presidents had taken fundamental steps for economic growth, today a dollar would not have been equal to 79 Afghanis; 55 percent of people would not have been under the line of poverty," Bashiri said.
However, Qais Muhammadi, an economist and lecturer at Kabul University argues that the current economic growth is closer to the real state of the Afghan economy than the growth under Karzai.
"The economic growth prior to 2014 was not real because it was based on international aid and later-than-2014 growth is considered to be real, because it is based on Afghanistan economy. The amount of revenue being collected before 2014 was believed to be more than 80 to 90 billion Afghanis but now that amount of revenue increased to 160 billion Afghanis, which accounts for 2 billion dollars. Before 2014, the amount of payments balance [was] supposed to be $500-550 million but now greater than $800 million or $900 million. Comparing to past, Afghanistan is not now in circle of monopolism of certain countries namely Pakistan," Muhammadi told Sputnik.
US WITHDRAWAL HITTING ECONOMY HARD
The United States has maintained a presence in Afghanistan for close to 20 years now. The US forces invaded Afghanistan in late 2001 in a bid to disrupt the activities of Al Qaeda terrorist organization (banned in Russia), which claimed responsibility for the September 11 terrorist attack. The withdrawal was completed in 2016, with limited contingent left behind. However, combat forces let mostly in 2014.
While US forces were present in the country, most Afghans were employed by foreign organizations. Billions of dollars flowed into Afghanistan and the aid helped many to become today's rich men. But the US withdrawal was a challenge for those who worked as subcontractors for foreigners and lost that employment.
With many Afghans who used to work for foreigners unemployed since 2014, Abdul Khaliq, a professional electrician, prefers Karzai to Ghani.
"I was making enough money during Karzai's rule, I was not free in a whole week, but now I just work for two days a week," Khaliq said.
Noor Ahmad Langari, who lives in Kabul's PD 12, believes that the unemployment and poverty have contributed to the rise in crime.
"The main cause of these criminals believed to be high level of unemployment in the country which even police cannot control," Langari told Sputnik.
Security threats remain a challenge for investors in Afghanistan. Many of them fear robbers, corruption and potential civil war despite the government's efforts to improve the situation.
"Afghan government has facilitated the process of investment that provided facilities, the country's economy has been directly and positively affected," the deputy minister of industry and commerce, Ajmal Abdul Rahimzai, told Sputnik.
However, Afghan investor Amanullah Shirzad is confirming that many have withdrawn their investments over insecurity.
"Many of the factories closed due to economic and security problems. Investors have pulled their investments out because of insecurity and the level of unemployment has risen," Shirzad told Sputnik.
The International Monetary Fund (IMF) completed its fifth review mission in Afghanistan in March. The IMF estimated the country's 2018 growth at 2.7 percent and forecast a 3 percent growth in 2019 based on agriculture recovery. The IMF remarked that the peace negotiations had to overcome "complex" issues and pointed to an uncertain security situation as an obstacle to growth.
