Afghanistan: present & future challenges

Huzaima Bukhari & Dr. Ikramul Haq

Afghanistan, one of the poorest countries of the world, has been facing all kinds of challenges a nation state can perceive—poverty to terrorism, modernism to theocracy, autocratic rules to socialist regimes, social backwardness to radicalism, lawlessness to Talibanisation, collapse of state institutions to foreign occupation, civil wars to chaos and mayhem, from massive foreign funding for development to rampart corruption and finally from opportunities of nation building to ethnic and regional polarisations. Of late, the country has shown positive growth in many areas, though all the experts concur that the real issue is still security threats from resistance groups and main challenge is that of self-governance once the foreign troops leave.

According to International Monetary Fund (IMF), Afghanistan relies heavily on donor grants to fund development and security spending. With one of the lowest per capita income [for 2012 estimated at about US$550], the country “ranks well below its neighbours on most human development indicators, nevertheless, some progress has been made in recent years toward the country’s political, economic, and social transformation”—see details at  http://www.imf.org/external/np/country/notes/afghanistan.htm.

In recent years, despite very volatile security situation, the government initiated many steps for economic stability and growth—the major challenges however, remain building political and economic institutions. IMF acknowledges that “economic activity has been robust, with real GDP growth averaging more than 10 percent annually over the past five years (8 percent in 2010/11), and inflation moderating”. Improved economic performance and reforms implemented in key areas enabled Afghanistan to qualify for debt relief under the Heavily Indebted Poor Country Initiative in January 2010, leading to a 96 percent reduction in Afghanistan’s 2006 stock of external debt of nearly US$ 12 billion.

The official report of IMF says: “Afghanistan has also made progress toward its social and development objectives and the Millennium Development Goals, though substantial challenges remain. For example, child mortality has been reduced and school enrollment increased, albeit from very low levels—the enrollment rate for primary school is less than 40 percent. At the same time, achievements in some areas are below expectations: more than 40 percent of children under the age of five are underweight; progress in increasing access to potable water and sanitation remains slow; and literacy rates for men and women aged 15 to 24 are 51 percent and 22 percent, respectively. Overall, the low implementation rate of only 40 percent of the development budget impedes more rapid progress toward poverty reduction”.

In 2001 Afghanistan’s infrastructure and institutions were in disarray as a result of years of conflict and erratic policies. The most pressing economic tasks involved restoring economic stability and rebuilding institutions, against the challenging backdrop of an unstable security situation. The IMF became involved in Afghanistan in 2002, to assist in rebuilding economic institutions and in providing advice to the government on economic policies and reforms. Since then IMF has been providing technical assistance to develop monetary instruments, strengthen the central bank, modernize foreign exchange regulations, revamp tax and customs administration, and enhance public financial management. IMF says that in next few years, Afghanistan “faces two main challenges: the scheduled departure of foreign troops by 2014, requiring the government to take over an increasing share of security spending; and an expected gradual decline in overall donor support over the medium term, with a larger share of donor support possibly being channeled through the budget”. Certainly from an economic perspective, these developments will make it more difficult for the government to address Afghanistan’s large social and development needs.

With less foreign funds available, the government will have to improve revenue collection—it was increased to 11% of GDP in 2011 from less than 7% in 20006. The withdrawal of foreign troops is expected to hold back economic growth and may affect revenue collection. At the same time, the government will have to shoulder expenditures currently paid for by donors. The IMF portrays a positive picture observing that “nevertheless, the government is committed to protecting social spending, but will need to rely on donor support for years to come to make continued progress toward its development objectives and the Millennium Development Goals”.

The Central Statistics Organization (CSO) of Afghanistan in its ‘Capacity Development Plan (2011-14)’, prepared in collaboration with the National Institution Building Project (NIBP) of UNDP, carries out a survey [‘Participation of Women and Men in Decision Making’]. The survey, aimed at providing data to government planners, policymakers, administrators, and international organizations, gives comprehensive, up-to-date information on women and men in decision making levels—all individuals working in the government as well as members of National Assembly and Provincial Councils. It also provides information on age, sex, education, marital status, opinion on the problems of women in decision making level. Though women’s participation in decision-making process has increased in recent years, it is still very low, the survey concludes. 

The biggest challenge of Afghanis remains capability of police and armed forces to have control over the country. Official site of NATO (http://www.nato.int/cps/en/natolive/topics_8189.htm) says “its primary objective in Afghanistan is to enable the Afghan authorities to provide effective security across the country and ensure that the country can never again be a safe haven for terrorists”. Since August 2003, the NATO-led International Security Assistance Force (ISAF) has been conducting security operations, while also training and developing the Afghan National Security Forces (ANSF). Launched in 2011, the transition to Afghan full security responsibility is due to be completed by the end of 2014, when ISAF’s mission will end. NATO will then lead a follow-on mission to continue to support the development of ANSF capacity. Wider cooperation between NATO and Afghanistan, however, will continue under the Enduring Partnership agreement, signed in 2010 at the Lisbon Summit that provides for:

• capacity building efforts, such as professional military education programmes;
• courses to promote the fight against corruption and good governance initiatives;
• assisting the Afghan civil aviation sector in meeting international standards;
• an ‘Afghan First’ policy to identify Afghan companies eligible for ISAF contracts;
• the SILK-Afghanistan project which provides affordable, high-speed Internet access via satellite and fiber optics to Afghan universities and governmental institutions in Kabul;
• training in civil emergency planning and disaster preparedness; and
• public diplomacy efforts to promote a better understanding of NATO and its role in Afghanistan. 

Afghanistan is trying hard to make Afghan National Army (ANA) from an infantry-centric force to a fully-fledged army to comprise both fighting elements and enabling capabilities—such as military police, intelligence, route clearance, combat support, medical, aviation, and logistics. At the same time, role of the Afghan National Police (ANP) is also shifting from countering the insurgency to a more civilian policing role, by further developing capabilities from criminal investigations to traffic control. The real test of both ANA and ANP will be once foreign troops leave. Military experts are of the view that they still lack capabilities and resources to combat militants in a vast land—having most formidable hilly terrains—that poses even a greater challenge for the best armies of the world.  

Afghanistan of 2014, it is believed by all, will not be free from security risks. Since private sector is not playing due role in economy—run mainly through foreign funds—the main engine of growth is missing and its impact will be enormous once foreign funding and economic activities of foreigners decrease. It is still a long way for Afghans to forge national consensus for peace, end armed conflicts, improve governance, safeguard the rule of law, reduce the role of illicit sectors, limit the influence of vested interests, implement a strong fiscal regime and allow the nascent mining sector to contribute towards growth.

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The writers, partners in law firm HUZAIMA & IKRAM (Taxand Pakistan), are Adjunct Professors at Lahore University of Management Sciences (LUMS).