Afghanistan’s Economy Will be in Tatters in the Foreseeable Future | Manoj Kumar Mishra

Accruing to the inheritance of a rickety civilian infrastructural pedestal- a byproduct of collateral damage done by decades of wars and insurgencies between the Afghan government and different insurgent groups especially the Taliban, the de facto regime’s confrontation with several other structures of weak economy are getting further weakened under the de facto Taliban regime. The de facto regime wrested power to rule a country whose economy was excessively externally financed as well as internally contingent on illicit drug economy.

Top-Down Approach to Restructuring Economy

The state ravaged by years of Civil War and then reeling under the conservative Taliban rule circumscribed by international legitimacy until 2001, was followed by years of US and NATO intervention which subjected the state’s economy to a top-down approach to external assistance and internal economic restructuring without aiming at development by empowering masses. Economy was structured from above without taking sufficient account of rural and tribal peoples’ interests. This prevented the economic base of Afghanistan from standing on a solid and indigenous foundation. American reliance on warlords to fight al-Qaeda and Taliban forces not only led to their accommodation into power structures but it had to accommodate their economic interests and their share in illicit drug production and trafficking too. Even attempts at democratising the power structure could not make it immune from endemic corruption and influence of warlords. Corruption and competition for power within the government sapped the economic strength of the Afghan state.

The weakening of Afghan’s economy can also be ascribed to the economic agenda that the intervening powers tried to promote in the country for their own interests. For instance, the Afghan state was conceived by the intervening powers such as the US and US-led NATO forces more as an enabler than a provider of economic growth. International aid was tied to the global private sector, which was entrusted with the task of reconstruction, and this kept the state overly dependent on external financial support.
Furthermore, the Americans tied a major portion of aid to the purchase of US-sourced products and services.

Besides, the weakness of the Afghan state’s economic foundation was underlined by the fact that a major chunk of international aid was not channeled and spent through the Afghan government because of allegations of rampant corruption. This led to other players such as international consultants and private contractors getting involved, and massive aid became their sources of income too.

Umbilical cord of Afghanistan’s Economy lies elsewhere

Dried fruits, fresh fruits, seeds, medicinal herbs and precious stones apart from exploration of untapped mineral resources provide Afghanistan with an indigenous base of legal economy which generated and can earn revenues for the country from outside. For instance, India’s grant of 50-100 per cent tariff concessions for Afghan exports of dried fruits, fresh fruits, seeds, medicinal herbs and precious stones under a preferential trade agreement pointed to this dimension. Not only decades of wars in Afghanistan did affect this legal structure of Afghan economy, the country’s dependence on Pakistan for routes to reach out to India and to the world market made Afghan economy contingent on the bilateral relationship between the two neighbours which very often remained strained.

While Afghanistan’s geography has been a source of attraction for external powers, it has been a bane for the country itself. It has no direct access to the Indian Ocean and to the world market and for long it has been dependent on Pakistan for land routes. An independent Pashtunistan which could have allowed Afghanistan an outlet to the Sea was suppressed by Pakistan within the larger umbrella of Islamic Fundamentalism such as Jihadi forces including the Taliban. Pakistan, on the other hand, has misused this dependence to serve its own interests such as meddling in the internal affairs of the country to realise the vision of acquiring strategic depth against India. While Afghanistan’s troubled transit and border relations with Pakistan are governed by the Afghan Trade and Transit Agreement of 1965, the attacks launched by the Tehrik-i-Taliban from Afghan soil spawned conflictual relationship between the two neighbours which also led Pakistan to keep the trade route under suspension. It lay bare the fact that the Afghan Taliban and Pakistan shared the strongest bonding specially in the times when they united against any common enemy. At a time when the Afghan Taliban is battling for international recognition for its legitimacy to rule, the bilateral problems with Pakistan, border issue and tensions with its interventionist role resurfaced. Despite China’s and Pakistan’s plans to include Afghanistan in the Belt and Road Initiative (BRI) and holding of a trilateral meeting towards this end in May 2023 and China’s hosting of the Taliban Ambassador on its territory in December 2023, real economic gains from these changing gestures are yet to be seen considering Beijing’s continuing threat perceptions from Uyghur Islamic militants from Afghan soil and Rawalpindi’s volatile relationship with the de facto regime in Kabul.

Proscribing Illegal Economy without Viable Alternatives may take Dangerous Turn

While the value of Afghanistan’s opiate exports alone has frequently exceeded the value of the country’s legally exported goods and services according to the report of UN Office on Drugs and Crime (UNODC) made public in November 2023, the de facto regime Taliban regime banned poppy cultivation and trafficking in April 2022. The report provided valuable statistics that following the sweeping ban "Opium cultivation fell across all parts of the country, from 233,000 hectares to just 10,800 hectares in 2023. The decrease has led to a corresponding 95 per cent drop in the supply of opium, from 6,200 tons in 2022 to just 333 tons in 2023".

However, this ban has not been accompanied by any such measures which could have provided alternative sources of income and employment to rural and poor people who are largely dependent on agriculture.

While humanitarian assistance is being provided by the UN, other sources of assistance and donations have significantly reduced in the wake the Taliban rule including development assistance from the US. This aid has not been channelized to create rural economic infrastructure. Water crisis, irregular displacements of people, droughts and war-ravaged socio-economic conditions militate against any sustainable income source among Afghans about 80 percent of whom are dependent on agriculture. Following the Taliban take over, jobs in cities and opportunities in non-farm sectors have greatly shrunk. The farmers are switching to cultivation of wheat which can neither fetch them the basic livelihood needs due to its lower price nor can it give the advantage that diversification of agriculture provides. It is likely that just as the Taliban’s first ban on opium production and trafficking in 2000 led to a decline in availability of heroin (which is produced from opium as a raw material) which in turn spurred production and trafficking of synthetic opioids or stimulants such as fentanyl, methamphetamine and cathinone in Europe with the potential to cast far more adverse effects on people’s health, this ban will have such morbid consequences. Besides, with this possibility becoming a reality, industry-based manufacturing of chemical drugs would further damage the agricultural economy of Afghanistan.

(Author: Dr. Manoj Kumar Mishra, Lecturer in Political Science SVM Autonomous College, Odisha, India )