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The Challenges to Nation-Building
in Afghanistan
continues....
With the demise of the Taleban, new opportunities evolved in Afghanistan. President Karzai has demonstrated commitment to a free and competitive economic system, and private-sector-driven growth in accordance with international principles. However, there are serious difficulties and challenges in reviving the economy. The present reconstruction effort is two-pronged. It is focused on rebuilding critical physical infrastructure on the one hand, and also on rebuilding public
sector institutions from the remnants of Soviet-style planning to ones that
promote market-led development.
But macro-economic planning and management at present is hampered by poor information, weak systems
of service delivery, and laws and regulations that need to be reviewed.
Afghanistan’s economy even at the time of the Bonn Agreement and thereafter, remained both backward and disintegrated. With 85 per cent of its population reportedly dependent on agriculture and 53 per cent of the GDP estimated as originating in the agricultural, livestock and forestry sectors, as compared with 28 per cent in light industry, 8 per cent in trade and 6 per cent in construction, the economy in 2002 was structurally in an early stage of development. Extremely rough estimates quoted by the Asian Development Bank suggest that in 2002, Afghanistan’s GDP amounted to $4.4 billion, which implied a GDP per capita of an abysmally low $170 per head.
To be continued...