Breaking out of Afghanistan’s current economic stagnation, rising unemployment, and poverty will only be possible if there is strong, sustained progress toward durable peace and political stability. Lowering security costs and, over time, reducing the extremely high aid dependency is the only way for the country to move toward balancing its budget books.
The Afghan government has recently embarked on important reforms to the national budget, embodied in the 2018 budget approved by Parliament early this year. This budget sets in motion an envisaged two-year reform process to achieve greater overall transparency, better development programming, and reduced corruption. The third in a series on Afghanistan’s public finances, this report updates revenue performance in 2017 and assesses the new budgetary reforms, how the draft budget fared in Parliament, the outcome, and next steps and prospects for the reforms.
While other, smaller mineral resources are being rampantly looted, Afghanistan’s large Aynak copper deposit—worth upward $50 billion—has languished unexploited despite being contracted to a Chinese consortium nearly a decade ago. This Peace Brief seeks to understand what went wrong and explores options for breaking out of the current impasse. Resuscitating the development of Aynak, though challenging, would send a powerful signal of beneficial exploitation of Afghanistan’s mineral resources.
Afghanistan has been plagued by large-scale, open looting of mineral resources, involving significant mining operations, bulk transport of minerals along main roads, and crossing the border at just a few, government-controlled points. This mineral looting, amounting to hundreds of millions of dollars per year, involves widespread corruption, entrenches warlords and their networks, and fuels both local conflicts and the wider insurgency in Afghanistan. The government needs to begin to get a better handle on resource exploitation and to collect more substantial royalties and taxes from ongoing mining activities.
This Peace Brief analyzes the main ingredients behind this success. In the end, however, the authors believe that sustained robust revenue growth will hinge on a durable revival of the Afghan economy, which in turn depends on achieving major progress toward peace.
Afghanistan’s “technocratic” reforms have resulted in impressive progress in areas such as public financial management. However, these reforms alone will not solve the country’s pressing security, political, and economic problems. This brief outlines the benefits and limitations of technocratic reforms and emphasizes that government and international attention should not be diverted from concrete, short-term measures to improve government functioning, strengthen security, and stimulate a mode...
Afghanistan experienced an impressive revenue turnaround in 2015. This brief examines the sources of the revenue increase and the actions that helped spur it, and discusses lessons learned and future challenges.
Reviving the Afghan economy during a time of intensifying violent conflict, declining external financial aid, and ongoing political uncertainty and dysfunction will be extremely challenging. But the country cannot wait for these entrenched problems to be addressed. While keeping expectations modest, this report proposes some targeted, near-term measures to increase confidence and stimulate the economy. Rather than engaging in politics as usual and following conventional policy prescriptions t...
Ten weeks after the Taliban briefly captured Kunduz, Afghanistan’s fifth-largest city, neither the fractured government nor the country’s political class is showing signs of heeding that wake-up call—or the other flashing warnings that the 14-month-old government is close to failure. While the United States quickly announced the reversal of its planned withdrawal of forces from the country, the factions in Kabul must figure out how to cooperate in governing, and Washington must do all it can to advance that, analysts say.
Fifty-seven percent of Afghans say their country is heading in the wrong direction, the most pessimistic view recorded in 10 years of the Asia Foundation’s annual survey of Afghans’ attitudes. Unemployment and insecurity are the main causes for a sharp fall this year in public optimism, said Asia Foundation specialists, who discussed the survey results November 19 at USIP.