By Dylan Magee
With the number of U.S. troops in Afghanistan decreasing by tens of thousands each year since 2011, the once stable war economy that was headed by over $130 billion donated by countries across the globe since the Taliban’s fall in 2001 is on the edge of a cliff ready to plummet into another period of rampant corruption and depression.
After the controversial election of President Ashraf Ghani Ahmadzai took the country by storm, the time is now for this war-stricken nation to claw its way out of the trenches on its own. Sitting on estimated trillions of dollars of untapped resources, such as lithium, iron, and copper, this country must effectively hone its goldmine in order to create a true self-sustaining economy that is vital to a future of prosperity. This development must be enacted amidst one of the most chaotic times in Afghanistan’s history, however, as the country must not only shield itself from the impending attack of the Taliban with the country’s underpaid police and military force, but also actively avoid another civil war whilst striving against all odds to keep the downward trending economy afloat.
For the past decade, billions in foreign aid pumping into the Afghan economy kept the country artificially stable. The deflation of this bubble is the main reason why Afghanistan’s economy is on the verge of collapse today. With a budget deficit of nearly $750 million and security costs of roughly $650 million, the thought of paying the Afghan military’s 350,000 soldiers adequately is impossible without more funding. The Afghan National Security Force (ANSF) alone requires $6 billion a year. To make matters worse, according to a Washington Review report, the ANSF’s projected budgetary needs for the next decade will amount to $10 billion per year, which simply cannot be accomplished due the reduced aid over the next decade from the U.S. and the rest of NATO. The only hope for Afghanistan hinges on the so-called “transformation decade” years following the troop withdrawal (2015-2024), which seeks to make the Afghan economy fully self-sufficient by 2024. This is far easier said than done, however, due to the projected 50% reduction in the number of American troops by the end of 2015–down to 9,800. This cut in the number troops is in preparation for a total withdrawal in 2016 which would lead to the economic collapse that many experts see rapidly closing in.
Despite the continual trend towards total U.S. military extraction, the Afghan military is not gearing itself to fill the upcoming security void. At a time when it should be strengthening, the Afghan military is weakening due to economic instability. The Taliban is on the verge of attack, during this time of desperation, which could be the first major conflict there since they were last in control in 2001. Not only is the Taliban a major fear in the eyes of the Afghans, but so is the rise of the Islamic State, or ISIS, as President Ghani has warned of possible attacks in the near future after the U.S. extraction is nearly complete. With the poorly paid troops in Afghanistan needing to shoulder the load more than ever, there is no telling how they would be able respond when the number of troops drops down to 5,500 by December.
One major concern is Afghanistan’s reliance on foreign aid. In fact, 97% of Afghanistan’s $15.7 billion GDP comes from foreign aid. This means that the Kabul government will have a much lower budget in the upcoming years and could potentially need a $537 million bailout to keep the economy afloat in the short-term, according to the World Bank. The fact that the Afghani government is only expecting only $1.8 million dollars in tax revenue—which is less than the value of the Taliban-controlled opium crop—is also unsettling. The Taliban, which will soon harness more economic resources and leverage than the government, has the resources to take hold of the country once again. A recent seizure a few months ago in Ghazni, a direct gateway to Kabul, resulted in the deaths of 100 people. This attack is evidence of the Taliban’s ability to regain territory and their willingness to shed blood to do so. There was also a report of a possible coalition between a leader of the Taliban and ISIS, which can easily spell doom on the underpaid military force of the Afghanis.
With all the worries about the impending attacks emanating from the diabolical Taliban and ISIS duo, the question remains: is there any hope for Afghanistan? This question largely weighs on the shoulders of the recently elected President Ghani, who was part of the first democratic transfer of power in Afghanistan’s history. After the controversy over a U.S.-brokered deal between he and the runner-up, Minister Abdullah Abdullah, President Ghani has sought to revolutionize the country’s economic system, stomp out corruption, and make peace with the Taliban insurgents. In his economic plan published prior to the election, he states his intentions to create jobs and restart the economic market by harnessing the Afghan capital from the clutches of the corrupt businessmen and to establish an office of which all public land is concentrated. The president then plans to enforce a law that would make all the land distributed in a legal manner to create thousands of more jobs. This is to be done by “developing 10 or 20 years programs to train the human power so the society will be benefited and an independent country will be progressed”. This process will be incited by a government-fueled program to help the millions of jobless youth cultivate a specialization in trades such as carpentry in order to take advantage of new opportunities that are aimed to lead to a future prestigious live in the framework of a market economy. The president then seeks to efficaciously utilize all the international aid remaining for the public good. After concocting a social model from the West, he will work towards defining it for the landlocked country in order to make a transit hub for the entire region. Lastly, he plans to harness the goldmine of resources the country sits on and use them to complement it with the provided aid to create a truly groundbreaking economy that has never before been done, which is the foremost beacon of hope for Afghanistan.
The preeminent critique that President Ghani presented about the current Afghani economic system is the lack of sustainability. Without a self-sustaining economy, all of the aforementioned solutions would be rendered useless once the international aid lessens. This is why the future of Afghanistan hinges heavily on the extraction of natural resources. Experts at the United States Geological Survey consider the country the “Saudi Arabia of Lithium” due to the projected $1 trillion dollars of lithium throughout the barren terrain. The additional $421 billion dollars of iron and $273 billion dollars of copper that lies beneath the surface also could be the defibrillator that the economy needs. Combined with the $16 billion dollars recently pledged by international donors at a conference in Tokyo earlier in the year, the odds for a gradual and manageable transition into the transformation period have increased considerably.
President Ghani’s plan to hone these resources is heavily focused on creating contracts with private companies that would disavow any fraudulent, corrupt activity. This involves “transparent principles and rules… for the conclusion of such big contracts for the exploitation of mines” paired with a proposal to have “all the contracts… concluded in a very transparent and accurate way.” All of the income generated from the mines will then be deposited into a government account, which will be closely monitored for fraud. The president wants to halt exports of raw materials when creating employment opportunities to fulfill the country’s needs and heighten national income in a self-sustaining manner. This will help rectify the stagnant labor market. With the potential to generate over one million jobs in the goldsmith and jewelry sector alone without the need for large factories and high capital investment, it is clear that industrial mining is the saving grace for the Afghan economy.
If the Afghans are able to hone the seemingly limitless amount of resources at their disposal, the country’s economy could successfully transform into the profitable and sustainable infrastructure that President Ghani has dreams of. Still it will ultimately be up to Ghani to succeed on this historic revolution amid countless security attacks and governance problems that keep these resources–and the trillion-dollar payout–underground. If the president can successfully implement his plan, however, he could put Afghanistan on the path to a future that only a select few deemed possible just months ago.