Physical infrastructure is of very high cost and rebuilding of the country’s infrastructure constitutes a major challenge of reconstruction as the

country is almost totally shattered. In a land-locked country like Afghanistan, the road network provides vital communication and transport services. National roads, that encircle the major centres of Afghanistan, and also connects it to neighbouring countries, were concrete and asphalt surfaced and covered some 2500 kilometers.

Rehabilitation of national loans is a top priority to ease humanitarian delusion and to provide the basics for subsequent economic recovery.

Labor intensive methods should be employed in this rehabilitation work

to aid the demobilization efforts. These approaches can be based on international experience as compiled by the ILO. The financing needs to be on a grant basis so as not to provide a debt-burden.

Agriculture has been the backbone of the Afghanistan economy and this sector has to be recovered to play this role again. Almost half of the irrigation systems requires restoration and a program should be made for addressing the needs with the Kariz system, Afghanistan system of underground channels. The rural infrastructure needed to restore dynamism to agriculture, reduce dependence on rainfall for irrigation and encourage growth of non-agricultural activities needs to be created by the state.

The damaged and destroyed infrastructure has to be reconstructed, for which a large proportion of aid is being diverted, so that the economy is reintegrated and rendered functional.

The ability of the state to mobilize resources needed to finance crucial developmental responsibilities must be restored for which an appropriate monitoring, tax collection and revenue sharing system must be worked out. Given the fact that Iran and Pakistan account for a substantial share of Afghanistan’s trade, and trade revenues constitute a large share of the total, the initial task should not be too difficult. But over time, it would be necessary to widen the tax base and obtain resources from internal direct and indirect taxation, especially the former.

To be continued.......