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The Future of Economic Development in Afghanistan
By admin September 14, 2017

The stability of Afghanistan has been the goal for the United States and other major powers since the 1980s. Although billions have been spent on the economic and political stability of the country, the future of Afghanistan is still unknown. The United States has now been involved in a coordinated military and economic effort with coalition partners since 2001, making it the longest war in America’s history.

While almost two decades have been spent on a nation building effort to develop Afghanistan, not much has changed in the overall complexity of the country’s economy. After American troop withdrawals in 2011, growth decreased drastically from 9.4 percent to 1.1 percent at the start of 2016. Throughout 2016, the economy grew to 2.2 percent due to an expansion in the agriculture sector from a 30 percent increase in fruit production. Even with increased production of fresh and dried fruit, the illicit trade of poppy has continued to expand each year, with a 10 percent increase in 2016 alone. An extensive New York Times article from February 2016 outlined a process of corruption that reaches the highest levels of the Afghan government, where officials, that include senators and military commanders, are working with local leaders to tax farmers and pocket the revenue. Although the American government spent 7 billion dollars to fight trafficking, under shadows, the Afghan government has now become a drug competitor to the Taliban in poppy production, continuing to make the country the largest source for heroin in the world.

The question still remains of what will happen in the economic development of Afghanistan?

President Trump recently authorized the increase of troops for an offensive strategy against a bolstered Taliban and ISIS while denouncing a mission of nation building. Yet, that has not ended the conversation of Afghan development within the administration or among America’s allies. Commerce Secretary, Wilbur Ross, has submitted a plan to greatly expand Afghanistan’s mining sector – a policy that President Trump has looked favorably on for quite some time. Proponents of the plan argue for the value of commodities, with an estimated one trillion dollars in highly valuable rare earth metals waiting to be extracted. Administration officials believe it is the sector with the most potential for growth in the shortest amount of time; however, experts question the effectiveness of such a plan with security and stability failing throughout major portions of the country.

The Trump administration has leaned further on its allies to increase their development efforts, calling on India, which has already committed 3 billion dollars in the country for infrastructure projects. While Afghanistan’s economic framework will benefit from such measures, it is unlikely to support long-term economic growth without establishing new sectors of the economy. Even with serious questions over America and its partners’ plans for Afghanistan, there are positive factors for the long-term. The most significant being Afghanistan’s acceptance into the World Trade Organization in July 2016, which could increase foreign direct investment, expand trade routes, and allow the country to enter global markets. Unfortunately, any economic developments are mute unless the Afghan government and Western powers can push back the recent Taliban victories that have undercut the country’s sovereignty.

Further Reading:

The World Bank: Afghanistan Development Update

Tasked With Combating Opium, Afghan Officials Profit From It

US says India’s security concerns in Afghanistan same as Pakistan’s

Despite risks, Trump administration moves forward with Afghanistan mining plan

Trump Outlines New Afghanistan War Strategy With Few Details

 


Thanks for sharing !


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