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Lawmakers Consider Anew On Afghan Aid.
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In a World Bank analysis, Singapore ranks as the easiest country to conduct business in, while Afghanistan is number 162
National Security Advisor James L. Jones
“…the Obama administration wants to hold troop levels here flat for now, and focus instead on carrying out the previously approved strategy of increased economic development, improved governance and participation by the Afghan military and civilians in the conflict.”
To Afghanistan’s many problems—Taliban insurgents, narco-trafficking, corruption, a president who shuns campaigning—can be added one more: It’s one of the worst places in the world to do business.
According to the World Bank’s 2009 Ease of Doing Business Rankings, Afghanistan placed 162 out of 181 economies. Singapore was ranked first.
On Tuesday, the Oversight and Government Reform foreign affairs subcommittee considered the challenges, difficulties and opportunities inherent to aiding the Afghan economy.
“Afghanistan’s stability will depend, in large part, on what the U.S., our partners and allies, and, most critically, the Afghans themselves, do over the coming several years to bring economic progress to a population ravaged by 30 years of war,” said Rep. John F. Tierney, D-Mass., chairman of the subcommittee.
The hearing was among the first of its kind since President Barack Obama announced his new so-called Af-Pak Strategy on March 27, key parts of which stress the importance of increased economic development in Afghanistan and its neighbor Pakistan.
The hard realities
Though U.S. taxpayers have shelled out $37 billion to the country, Afghanistan still clamors to transform its economy from corrupt bazaar to free market.
Transparency International, an organization that tracks corruption across the globe, rates Afghanistan as one of the most corrupt countries in the world. Afghanistan comes in a low seven out of 177 nations analyzed in Foreign Policy Magazine’s recently released 2009 Failed State Index.
Afghans are also leaving their land in droves, citing the lack of jobs. In 2008, 18,000 Afghans applied for asylum in Europe, almost double the 2007 figure.
Projects in the works
Experts who have been deeply involved in Afghanistan’s economic development filled in subcommittee members on projects in the works, all spelling out proposals in line with their own visions.
Dr. Mohammad Usman, a former planning advisor to the Minister of Agriculture in Afghanistan, urged the lawmakers to keep a keen eye on rural development.
“The agricultural sector has the potential to reestablish its historically prominent role in nurturing Afghanistan’s growth and development,” Dr. Usman said.
Approximately 80 percent of Afghans live in rural areas and rely on agricultural for their livelihood, including livestock, cultivating wheat and dried fruits. Before the U.S. invasion, Afghanistan owned 20 percent of the global market for raisins.
Mildred Callear, the executive vice president of Small Enterprise Assistance Funds, a project of Afghan Growth Finance LLC, counted the successes the operation has had so far.
Focusing on small to medium sized business loans (not to be confused with microfinance), the investment fund, Afghan Growth Finance, has committed about $5 million to Afghan entrepreneurs since April 2008.
Callear said the loans are “the largest portion of the formal business base in Afghanistan and are the backbone of a growing and local private sector.”
Afghan Growth Finance’s investments seem to run the gamut of what’s possible in Afghanistan’s future free market, including a licorice root and extract processor, a renewable energy corporation, a media company and an internet service provider.
Callear mentioned that due to their relatively small size, the businesses tend to go under the radar of insurgents looking to make a statement by attacking a perceived western aid project.
All who testified agreed that saving Afghanistan entails not only crushing the tough Taliban but also rebuilding a fragile economy.
Speaking to the panel from the U.S. Embassy in Kabul, a spokesman for The Aga Khan Development Network, credited Afghan business savvy for the country’s resilience over years.
“Afghans are inherently very entrepreneurial,” the spokesman for the coalition of aid agencies said.
“It’s what allowed them to endure over 20 years of war.”