Worsening inequalities, criminality, and political corruption is keeping ordinary Afghans impoverished while lining the pockets of the state’s cronies.

Although 17 years have passed since the existing Afghan government was formed, little has been achieved to overcome the constraints that inhibit the sustained renewal of the core sectors of the Afghan economy.

Consequently, today, millions of Afghans across the country remain mired in the trap of grinding poverty. Moreover, the elevated unemployment rate, missing productivity growth, and lack of innovation and growth-oriented entrepreneurship are some of the troubling and perennial problems that halt the stabilization of Afghanistan’s economy.

The ordinary Afghans lack opportunities to participate in decent income generating activities, while individuals affiliated with patronage networks, politically-connected groups, and businesses wielding political clout exercise monopolistic control over development projects and national economic markets.

Absolute poverty exceeding 39 per cent and an additional 37 per cent of the Afghans living just above the poverty line are real harsh facts.[1] This situation is especially debilitating to the burgeoning under- and unemployed youth. The Afghan youth unemployment stands at a staggering rate of 40 percent.

Although important for gaining statistical insights, the figures reported above do not capture the true extent of economic impasse and unemployment because a large number of Afghans are not gainfully employed and struggle in “working poverty” since their income falls way below the threshold required to satisfy their daily needs.

Implications

In addition to economic deprivation, the systematic social exclusion of the ordinary citizens has bore deleterious societal consequences. Crime and extortion loom large in Afghanistan not least because the destitute perpetrators find no alternative viable revenue streams.[2]

In addition, this hostile situation has enticed the idle army of young population—an otherwise highly valuable asset—to join, in return for wages, the ranks of terror networks; sympathize with notorious warlords, drug traffickers, and drug-connected politicians who overtly operate in Afghanistan.[3] If left unbridled, endemic elite corruption and resource-grabbing can further add to the vicious poverty-crime-illegality dynamic and simmer deep social tensions.

Jobless and Uneven Growth

From 2002 onward, the average economic growth rate was strong, and the income per capita has doubled in more than a decade—albeit at the cost of increased inequality in income distribution—thanks to the windfall capital inflows of billions of dollars in military and development aid and the ensuing reconstruction boom. But the irony of Afghan growth story is that it has not delivered prosperity to the ordinary Afghans.[4]

While a tiny political elite and their patronage network has more than tripled their cut of Afghanistan’s income pie, the economic woes of the poorest is worsening day-by-day. Every year almost 400,000 Afghans, many of whom are educated youth, enter the Afghan job market but end up in protracted unemployment and face an uncertain future.[5]

In particular the rural households, who are often deprived of basic public services, continue to bear the brunt of stagnation and inequalities despite numerous major economic development projects and interventions implemented in and for the benefit of the rural communities.

What Statistics don’t tell us about deep poverty in Afghanistan

To frame an in-depth understanding of the living conditions of poor Afghans, and gather concrete information related to the facts on the ground, it’s tempting to temporarily relax the quest to gather scant statistics. It will be rewarding to try to experiment by discussing with a random number of local Afghan commuters in the alleyways of bustling Kabul, for instance, on the economic dimensions of life and the broader challenges confronting society in Afghanistan 2001 onwards.

As an observer of society and development in Afghanistan, this author had a similar experience of interacting with people to develop a first-hand perspective on the economic lives of ordinary Afghans. Among others, my two appalling observations of the aspects of ordinary peoples’ lives have revealed the severity of the circumstances under which the poorest, marginalized, and politically unconnected Afghan citizens live.

In early 2016, I met a retired school teacher during my commute to office in Kabul, Afghanistan’s capital. The teacher narrated in a nutshell his year-long story of hardships in trying to rescue his 10-year-old son. After a short conversation with him, the elderly teacher paused for a while, and then with a grim determination covering his face, he innocently said, “I must employ my 20-days’ worth of labor to earn $100.” Upon my inquiry the teacher replied that he required this amount to cover his travel costs to a clandestine location across the eastern Afghan border to bring back home his son who was released from the custody of unidentified kidnappers.

A similar heartrending story is that of an orphan child probably aged 9, whom I ran into the same year in an open sky bookstore just opposite a glamorous jewelry market in a commercial district of Kabul. The skinny boy accompanied by his mother was bargaining down the price of a school book which cost $0.34. “Dear brother, he is an orphan,” said his mother, her voice echoed hope and fear for his son’s future. “I cannot afford to buy this book.”

Paradox of development in Afghanistan

The painful tragedy of the grizzled teacher indicates a deadly interaction between weak government security, increased criminality, and extreme poverty which is pervasive throughout Afghanistan. Similarly, the awful experience of the aspiring child reflects how social exclusion and economic vulnerability interact to engender serious constraints to sustainable development and social progress.

For many poorer households such as the unsuspecting school boy, the opportunity cost of investing as little as $0.34 on education is forgone consumption of social necessities and perhaps further reduction in the required daily calorie intake for the already malnourished and stunted children—who are plagued by extreme poverty.

This overall bleak situation reflects a paradox of development in post-2001 Afghanistan. Despite more than $100 billion dollars in foreign reconstruction and development assistance poured into the embattled country, foreign aid has done little to affect positive change in the lives of the ordinary Afghans.[6]

In truth, the political order that emerged in late 2001 was an amalgamation of influential political constituencies, major warlord factions, and ethnic patronage networks who formed the political base of the nascent government and who exercise political power to their self-interest. Benevolent and eligible Afghans, who had no political contacts, save for the negligible few, found it unlikely to make it to the institutions of government, and hence perpetually remained excluded. Such a political system therefore by nature was anemic to reconstructing and uniting a conflict-driven and fractious society for, as of now absent, actionable inclusive economic development agenda—an overarching imperative.[7]

Under these chaotic circumstances the task of poverty alleviation and economic development policy formulation was sidelined because staggering levels of corruption, endemic elite plunder of national wealth, and the authoritarian rule by the warlords in power went unchecked almost in every state institution both at the sub-national and national level.[8]

Graft and extreme corruption—and its offshoots such as organized crime and drug trade involving strong political leaders and powerbrokers, and influential tribal elders was rather supported under the label of compromise for the sake of national unity and peacemaking—a paradoxical paradigm that was orchestrated by the previous government, and continues to this day albeit under a new label skillfully managed by the so-called technocrats in power.[9]

Conclusions

The post-2001 political order has given rise to government-sponsored oligarchs and redistributive patronage and criminal networks that have sapped crucial foreign assistance, hindered the revival of battered Afghan economy, and have also frustrated small and medium scale business activity much required to create jobs, and lift the impoverished populations out of extreme poverty.

Unfortunately, the political settlement has stuck with tenacity in Afghan society acting as self-perpetuating anti-development and anti-poverty alleviation system shattering the hopes of millions of Afghans for genuine economic and civil governance reforms, and social prosperity.

The Afghan civil society and benevolent national and foreign actors face a gigantic and uphill task which requires generating strong political will and adopting a sequential approach to tackle corrupt activities, dismantle crime networks, and overcome self-serving elite behavior from the Afghan governance, economic development and military institutions.

In order to gradually reverse this trend or at least cease further deterioration in the situation, I recommend the following set of policy measures:

Recommendations

  • Generate domestic and inclusive political consensus, involving indigenous Afghans, for fundamental socio-economic reforms: The Afghan political system should be overhauled doing away with the politics of personality and ethnicity, and the society in collaboration with nonfactional emerging leaders and policymakers should embrace the politics of ideas and substance, and thereby help shape the emergence of an accountable and truly responsive government that can ensure the perpetrators of violence and corruption do not go with impunity, and restore confidence in the rule of law.
  • Empowering the ordinary Afghans with the knowledge of and critical factual information about ‘who steals what from the poor and who pockets the share of Afghan society’ is a vital step toward active civic mobilization. Therefore, the civil society, academic institutions, and think-tanks should stimulate general public conversation as to why and how the illegal monopolistic practices, and the criminal capture of state functions, especially of customs depots, are widely prevalent, and why predatory criminality, and notably the illicit economies of development projects and procurement—that siphon off employment opportunities otherwise available for the impoverished population— are pervasive. Using credible research insights, think-tanks and civil society organizations should also draw the attention of the international donor agencies to carefully scrutinize the counterpart and implementing Afghan companies and to avoid awarding projects to corporations connected to warlords, corrupt politicians and bureaucrats.
  • The donor agencies and global economic institutions should put pressure on government policy decision makers to revisit their economic development paradigms, and to seriously take into account the aspirations of millions of Afghans who are still caught up in extreme poverty and as a result suffer in deplorable living conditions.
  • Encourage local corporations and international financial institutions to establish an independent and transparent entrepreneurship development fund especially targeting the socially excluded and economically vulnerable communities across Afghanistan.
  • Major international development institutions, local NGO’s, and philanthropic organizations operating in Afghanistan and whose mission is to genuinely promote local economic development should prioritize partnering with small & medium sized Afghan enterprises, in particular in the labor-intensive tradable goods sector, so that job outcomes for the poor are improved and income disparities are gradually reduced. The preceding and this last point are also crucial to building an inclusive Afghan society.

References

[1] ADB. 2016. Basic Statistics 2016. Manila; Tolo News, “Unemployment Rate Spikes in Afghanistan,” October, 17, 2016, http://www.tolonews.com/afghanistan/unemployment-rate-spikes-afghanistan; The Borgen Project, “Poverty in Afghanistan,” March 21, 2015, https://borgenproject.org/poverty-in-afghanistan/

[2] Sune Engel Rasmussen, “US funds fed corruption in Afghanistan, eroding security fighting Taliban—report,” The Guardian, September 14, 2016, https://www.theguardian.com/world/2016/sep/14/afghanistan-corruption-us-military-taliban-security

[3] Vanda Felbab-Brown, “How predatory crime and corruption in Afghanistan underpin the Taliban insurgency,” Brookings Institution, April 18, 2017, https://www.brookings.edu/blog/order-from-chaos/2017/04/18/how-predatory-crime-and-corruption-in-afghanistan-underpin-the-taliban-insurgency/

[4] Dorn Townsend, “Afghanistan’s Aid Bubble,” Foreign Affairs, June 26, 2014, https://www.foreignaffairs.com/articles/afghanistan/2014-06-26/afghanistans-aid-bubble

[5] Central Statistics Organization, National Risk and Vulnerability Assessment 2011-12. Afghanistan Living Condition Survey, Kabul, 2014

[6] Mujib Mashal, “Afghan Jobs Program Aims to Stem Exodus of Young,” The New York Times, November 17, 2015, https://www.nytimes.com/2015/11/18/world/asia/ashraf-ghani-afghanistan-jobs-program.html?_r=0

[7] Mathew Rosenberg and Graham Bowley, “Intractable Afghan Graft Hampering U.S. Strategy,” The New York Times, March 7, 2012, http://www.nytimes.com/2012/03/08/world/asia/corruption-remains-intractable-in-afghanistan-under-karzai-government.html

[8] Zachary Laub, “The Taliban in Afghanistan, “Council on Foreign Relations July 04, 2014, https://www.cfr.org/backgrounder/taliban-afghanistan

[9] Mujib Mashal, “After Karzai,” The Atlantic, July/August, 2014, https://www.theatlantic.com/magazine/archive/2014/07/after-karzai/372294/