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Afghans alarmed by economic impact of troop withdrawal

Posted: August 28, 2011 - 9:10pm

KABUL, Afghanistan — Many Afghans are worried about what the security situation will be like in their country if international forces pull out as expected in 2014.

But others have a different concern: What will happen to the country’s economy when the troops are gone? Local economists are warning that Afghanistan’s economy could face a sharp decline after international troops withdraw.

Mohammad Qurban Haqjo, chief executive officer of the Afghanistan Chamber of Commerce and Industry, says the prospect of the troop withdrawal has already harmed the economy.

“The announcement that foreign forces are to withdraw from Afghanistan has had a negative impact on the economy,” he said. “Investors and traders are concerned about security and political stability after the withdrawal,” he said.

Haqjo says 60 percent of Afghanistan’s gross domestic product is in some way linked to the presence of foreign troops.

“The presence of foreign forces has led to economic growth in the areas of telecommunications, construction, transport and services,” he said. “Their withdrawal will cause damage in these areas as well.”

Haqjo blames the government and international donors for doing little to anticipate the problem.

“The government and the international donors have not invested in economic infrastructure over the past 10 years,” he said, leaving the country poorly prepared to stand on its own economically.

Critics claim that since 2001, the government of President Hamid Karzai has failed to develop a coherent economic strategy, failing to invest in agriculture, infrastructure improvements or manufacturing.

Haqjo notes that 45 percent of the government’s operating budget and 100 percent of its development budget comes from foreign aid.

Much of that assistance is likely to vanish along with the foreign troops.

Some officials attempt to offer a rosy scenario, Central bank spokesman Emal Ashur said a crisis was unlikely because the country’s economic base had become stronger in recent years.

“In 2002, per capita GDP was only $182. This has increased to $590, demonstrating that there has been economic growth,” he said.

Haqjo dismisses such calculations.

“If you go to remote villages in the country, you will observe mass poverty and the catastrophic conditions in which people live,” he said.

Even government officials concede that between 35 percent and 40 percent of the workforce is unemployed, while 36 percent lives below the poverty line.

Ziauddin Zia, an adviser to the Minister of Commerce and Industry, insists there’s no reason to be concerned about the fate of the economy once the troops are withdrawn.

“The foreigners came to ensure security. They will do that. Once security is guaranteed, the country’s economic problems will also be resolved, so there should be no fear of a financial crisis,” he said.

But Haqjo is skeptical.

“We aren’t seeing political, military or government stability in Afghanistan. The war is intensifying on a daily basis,” Haqjo said. “There has been less security since the announcement that foreign forces are withdrawing — the Taliban view it as a defeat for the foreigners. Attacks have also increased on commercial buildings and private investments like department stores and road-building companies. How can anyone claim the situation is improving?”

• Faramarz is a reporter in Afghanistan who writes for The Institute for War & Peace Reporting, a nonprofit organization that trains journalists in areas of conflict.

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