The Challenges to Nation-Building

in Afghanistan continues......

Most of the major formal social, administrative and economic institutions of the country had fallen apart due to the conflict over Soviet occupation until the Geneva Accords (1979-1989) and continued heavy fighting among various mujahidden factions from 1992 which continued till the late 1990s. The nation’s transportation and communication systems, heavy and small-scale industries, education and agricultural infrastructure were among the most seriously damaged sectors that needed a tremendous amount of investment. This economic decline had exacerbated the level of poverty and economic hardship throughout the country. Largely dependent on subsistence agriculture, the country has witnessed diminishing income levels, declining food security, reduced access to urgently needed services and an increasing population.

The Office of the UN Coordinator for Afghanistan has highlighted

some of the problematic trends of the Afghan economy of the Taleban period. It presents an idea of the extent of economic challenges that the new government had to address in 2001. A wide range of regional disparities existed and were created by the Taleban between different regions and within each region. While Herat, Jalalabad and Kandahar had largely benefited from cross-border trading with neighbouring countries, the northern provinces, in particular the isolated and chronic food deficit provinces of Badakhshan and Bamyan, had been badly affected by natural disasters and heavy fighting that took place in August-September 1998.

The Taleban authorities reportedly blockaded the provinces of Parwan

and Kapisa, which had caused a tremendous increase in prices of essential

items.

Also the Afghan economy has always remained vulnerable to policy

decisions adopted by its neighbouring countries. In the past, even when peace and stability were in place, the country’s economy depended on economic relations with the former USSR. In the late 1990s, the country had become vulnerable to policy decisions made in Pakistan. An obvious example of such a change could be seen in the markets. Also, the unofficial devaluation of the Pakistani currency during 1998 further reduced the value of the Afghan currency.

To be continued...