Kabul no longer resembles a city ravaged by three decades of war, civil strife and insurgency. A few minutes after leaving the airport complex, as one enters the streets of Afghanistan's capital, all notions of the war-torn country begin to fade. Plush, yet Bohemian-styled marriage halls, perhaps inspired by the casinos of Las Vegas, glitzy shopping malls and busy markets greet curious eyes. What happened to the bullet-ridden mud walls or the shell-punctured roofs, one might ask.
The first impression of Kabul has none of that to offer.
As the city begins to introduce itself, it becomes evident time has healed its wounds. Pul-e Khishti, Kabul's biggest open-air market, bustles with shoppers and itinerant vendors. Kiosks selling burger and Doner kebabs have popped up next to traditional Afghan eateries. Driving with office-goers means being caught up in hours-long traffic snarls.
"Abhi to koi mushkil nehi hain (There is no trouble right now)," Nadim, a taxi driver, says in broken Urdu. Nadim is, however, scared to think about the future. Over the next few years, Afghanistan will undergo a couple of momentous transitions. The first is a security transition. Since 2001, after ousting the extremist Taliban insurgents, US forces, supported by the United Nations Security Council, have been maintaining public security and stability for the democratically elected government of President Hamid Karzai. By the end of 2014, most foreign troops will pull out of Afghanistan, leaving the law and order and security measures to the US-trained Afghan police and army.
The second is an economic transition. Beyond 2016-17, the government could face massive economic constriction. Being one of the 10 poorest countries, Afghanistan is heavily dependent on foreign donations, not just to balance the budget, but also to grow the economy. The World Bank estimates between 2002 and 2010, the country received an average $6 billion a year in civilian aid. This was about 40 per cent of its GDP (gross domestic product)-$15.94 billion in 2010. Only a few other territories such as Liberia, West Bank and Gaza have received more aid per capita than Afghanistan on a few occasions.
A big chunk of the aid goes into rebuilding the war-torn country. In 2011, about $252 million of foreign aid was pumped into developing Kabul. Most of the glitter that one sees in Kabul is built on an economy generated by such aid. But the days of handholding are coming to an end.
The fear is once foreign troops exit Afghanistan, funds for development projects might fall into the wrong hands or be siphoned off. After all, corruption is rampant in the country. According to the 2012 corruption perception index of Transparency International, a global civil society organisation, Afghanistan is among the 10 most corrupt countries. Such is its disrepute that at a conference in Tokyo in July 2012, about 70 countries and donor agencies agreed to make $16 billion available to Afghanistan until 2016-2017 only after the government pledged it would ensure greater accountability and transparency. Since 80 per cent of the aid would be aligned with the National Priority Programs (NPP), the government had to promise to follow NPP "with a focus on economic growth, revenue generation, jobs and human development".
Dwindling aid will hit government finances the hardest. Most of the foreign aid does not come directly to the government; it is spent through implementing partners such as contractors or civil society organisations. And, this aid doesn't entirely benefit the country. Much of the aid money goes into the payments to foreigners working in the country or contractors and for outward remittances. In 2010-11, Afghanistan received $15.7 billion in foreign aid, of which the government received only 12 per cent-about $1.2 billion. This constituted 41 per cent of the government's budget. That year, the government spent about 20 per cent of its budget, or $950 million, on public welfare.
The World Bank reports, "Development progress since 2001 has been mixed…Key social indicators, including life expectancy and maternal mortality, have improved markedly (admittedly from an extremely low base), and women are participating more in the economy." If foreign spending dries up, one of the first things that could be hit is public spending on development projects.
Afghanistan's mines minister Wahidullah Shahrani is, however, optimistic about the country's future. In an interview, Shahrani says mining could be pivotal in turning around Afghanistan's economy. The government insists underneath Afghanistan's soil lie $3 trillion worth of minerals.
Money spinner?
The fact that Afghanistan is rich in minerals is known for about 40 years. In the 70s, Russian's geological survey team, for the first time, prepared a mineral map of the country. But it never got on to extraction. After the fall of the Taliban, the United States Geological Survey (USGS) sent a team to survey these minerals. An old British bomber aircraft fitted with 3-D mapping capabilities made sorties over areas with mineral deposits in 2007 and prepared a detailed 3-D profile of the reserves. The profile was ready by 2009 and the following year, USGS announced Afghanistan's mineral wealth was worth $1 trillion. The list of minerals is exhaustive and includes copper, iron ore, rare earth minerals, gold, oil and natural gas.
Mining would generate about 5,00,000 jobs, Shahrani told Down To Earth. "For every direct employment, three others are indirectly employed," said an official from the ministry. According to statistics released by Afghanistan's Ministry of Economy, about 5,00,000 employment seekers went without jobs every year. Only 48 per cent of the one-million workforce had seasonal employment.
The dazzle of revenues has left everybody pushing for mining as a panacea for an economic revival. The government has made it the mascot for economic growth. Javed Noorani, an extractive industry researcher with non-profit Integrity Watch Afghanistan, says everybody in the country, especially due to media publicity, now thinks a lot of cash is coming their way through mining. From politicians to warlords, everybody is trying to invest in mining, directly or through their cronies. Mining can also bring economic and social benefit to the cash-starved country.
But is that the case?
Reprinted with permission from Down To Earth magazine
