The Challenges to Nation-Building

in Afghanistan continues...

There was a substantial lack of economic indicators during that period because the Taleban movement had established a nominal government in most parts of the country, which was not recognised by the

international community except Pakistan, Saudi Arabia and UAE. As a result, no reliable information was available on economic indicators such as national income, the government budget, foreign trade, inflation rate, income distribution, employment, and current level of GDP, GNP, or balance of payments. Interestingly, the private sector was active in

agriculture and trade activities. During the course of the past two decades,

the reduced role of the central government has encouraged the private

sector to play a prime role in the nation’s traditional economic activities.

The potential for further improvement of the private sector is still high

and a large number of Afghan businessmen and traders might be

interested in investing in small-scale industries provided that security and

stability exist.

Recovery of Post-War Afghan Economy



As mentioned earlier, most post-conflict societies have to overcome

serious challenges to economic rehabilitation and development. With

population displacement and suffering as well as damage to buildings and

roads, both human capital and physical infrastructure are often left in

shambles.

Social and political tensions accompany unnatural population

movements and competition for resource and there is always a possibility

for potential conflict between the returnees and the community. Since

post-conflict societies usually have deficient resources to support

returning refugees and displaced people, external assistance is needed to

the transition. Initial priority in a society like Afghanistan that have

experienced a long and intense civil war is to overcome the enormous

wartime destruction.

Therefore, a heavy injection of foreign aid is necessary for rebuilding infrastructure as well as refugee resettlement.

While the public sector is almost non-existent, development of the private

sector is hampered by the long-term impact of interruption of production

activities. Income-generating programmes are needed where large

numbers of people are unemployed. Special economic assistance is

necessary for the increased number of female-headed households, many

of which live in extreme poverty following loss of financial support and

jobs.

To be continued...