Afghanistan – what happens after 2014?

It’s a question that comes up often.

A comprehensive report prepared by the Congressional Research Service (CRS) covers the issues and outlines the challenges.

It doesn’t say that when you throw money at a problem, often the result is an expensive problem plus corruption. To date America has contributed $68 billion, and the rest of the world another $25 billion. In 2005, the first time it was surveyed, Afghanistan was 117 out of 159 on Transparency International’s corruption index. By 2011 it was 180 out of 183.

The CRS report mentions the challenge that is corruption and it indicates that there are government institutions dedicated to eradicating malaise, but fails to mention the election fraud that occurred in the 2009 presidential election. It does mention the fraud in the 2010 parliamentary election, which the beneficiary of the 2009 election fraud objected to. Apparently he resented that his techniques had been so effectively copied.

Until the corruption is sorted out, legitimate businesses won’t want to invest in Afghanistan.

Of course, the illegitimate businesses love Afghanistan. It’s the World’s biggest producer of poppy.

Mention is made of the need to develop the economy. Donor aid represents 95% of the country’s GDP. The best case scenario predicts a 13% decline.┬áThe worst case scenario has the GDP falling by 41 percent. At a recent conference in Tokyo, the donors pledged $16 billion over four years. That won’t help until the corruption is sorted out. Proof, if it’s needed, can be seen in the way South Africa’s economy has slid down Africa’s financial rankings, matching it’s decline on the corruption index ranking.

In the agreement signed between America and Afghanistan on May 2, 2012, under the heading of Economic and Social Development, the United States commits to:

help strengthen Afghanistan’s economic foundation and support sustainable development and self-sufficiency, particularly in the areas of: licit agricultural production; transportation, trade, transit, water, and energy infrastructure; fostering responsible management of natural resources; and building a strong financial system, which is needed to sustain private investment.

Perhaps we can send Deloitte to repeat their success with Kabul Bank.

Transport is also an important challenge. Let’s hope that there’s more commitment to that than in 2010 when the lone Department of Transport attache was tearing out his remaining strands of hair.

A lot of people are pessimistic about Afghanistan’s future after 2014. It’s not easy to contradict them.

More at:
Corruption Perceptions Index 2005
The United States’ “New Silk Road” Strategy: What is it? Where is it Headed?
Afghanistan Beyond the Fog of Nation Building: Giving Economic Strategy a Chance
U.S. Strategy for Pakistan and Afghanistan
Economic Transition in Afghanistan: How to Soften a Hard Landing
Next Steps in the War in Afghanistan?
Pakistan termed biggest stakeholder in post-2014 Afghanistan
Afghanistan: Post-Taliban Governance, Security, and U.S. Policy
Afghanistan: Politics, Elections, and Government Performance
Afghanistan: U.S. Rule of Law and Justice Sector Assistance
United Nations Assistance Mission in Afghanistan: Background and Policy Issues
Afghanistan Opium Survey 2011
Pakistan – U.S. Relations
Afghanistan aid: Donors pledge $16bn at Tokyo meeting
U.S. advisers saw early signs of trouble at Afghan Bank

The hand that feeds