Afghans fear economic meltdown as NATO exit looms

As NATO discusses its exit from Afghanistan at a summit in Chicago, Afghans fear that a meltdown in their corruption-plagued economy could follow the consequent drop in foreign funding.

President Obama, right, during his meeting with Afghan President Hamid Karzai at the NATO Summit in Chicago, May 20, 2012.

Cash that is desperately needed in one of the world's poorest economies is already making its own way out -- $4.6 billion left through Kabul airport in 2011, almost double the amount in the previous year, the finance ministry says.

The central bank has moved to restrict people from leaving the country with more than $20,000 in cash in their luggage -- but the prohibition can easily be circumvented with a bribe to an official.

Corruption has been fuelled by the billions of dollars that have poured into the country in the decade since a US-led invasion toppled the Taliban regime after the 9/11 attacks by Al-Qaeda.

The United States, which has nearly 100,000 troops in Afghanistan out of NATO's total of some 130,000, spends about $10 billion a month on its military mission alone.

Afghanistan also gets roughly $15.7 billion in international aid annually, according to a recent World Bank report.

While the Afghan government admits corruption is rife within its ranks, it also points a finger at "the contract systems of the international community".

"The minimum to get a contract is a 10 percent commission. When we talk about a 10 million dollar investment, imagine how much that's worth," a former civil servant told AFP.

"My former colleagues, who were earning 200 dollars a month, now live in Dubai. They have cars, boats, while I walk."

Western officials point to efforts to vet contractors and curb corruption, but admit there are difficulties.

"We are at war here. If you search for a perfect solution, completely audited, you won't get it in Afghanistan with the timeframes we're working in. That isn't an excuse, it's just an explanation," says one, requesting anonymity because of the sensitivity of the issue.

There is no doubt that many ordinary Afghans have also benefited from the cash inflow -- according to a report by the Congressional Research Center, a US Congress body, 46,000 Afghans were employed by foreign contractors last year.

But with NATO combat troops due to withdraw by the end of 2014, fears of the consequences are growing.

Fawad, a translator at a foreign military base, earns around $950 a month and with the money has been able to renovate his house, buy a car and live decently in Kabul with his family.

"My life is better now, but there is no job security for us anymore, we can be dismissed any minute as the troop drawdown has already started," he says.

"I'm sure I will lose my job by 2014, I don't know what I will be doing, but the future doesn't look good to me."

Businessmen are also feeling the pain.

"Our business has been going down since the announcement of the foreign troops' withdrawal," says Mohammad Jalil Ahmadi, owner of a large drapery shop in Kabul. "It has gone down by almost 50 percent.

"Because of the increasing insecurity, people are simply reluctant to either invest or buy anything. After 2014, if the situation deteriorates I will leave this business, and might move my investment to another country," he says.

Although Kabul has signed strategic partnership deals with several allies including the United States -- who have pledged aid including subsidies for Afghan security forces beyond 2014 -- most Afghans are sceptical.

Their pessimism is rooted in the 1980s, when the United States and its allies provided financial support, weapons and training to Afghans fighting the Soviet Union's occupation of the country.

After the Soviets pulled out, the US lost interest and Afghanistan plunged into civil war.

"Once they leave, they leave, as they did after the Soviets. There is no guarantee they will keep helping us," says Ahmad Shah, who works for a non-governmental organisation.

"Unfortunately, in the past 10 years, no infrastructure has been built. They have built a fake economy dependent on foreign aid. Once the aid stops, the economy will collapse," he says.

Besides growing about 90 percent of the world's opium poppies, the basis for heroin, Afghanistan does have resources of its own: it has mineral reserves estimated by the US Geological Survey to be worth more than $1 trillion.

But with almost no functional industry in place, the bubbles of economic activity created by the foreign presence will burst, says Mostaf Assir, an economist.

"It will leave hundreds of young men unemployed and susceptible to Taliban recruiting," he predicts.

Source: AFP

Other news