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The Economic Disaster Behind Afghanistan’s Mounting Human Crisis
The Economic Disaster Behind Afghanistan’s Mounting Human Crisis
What Will Peace Talks Bode for Afghan Women?
What Will Peace Talks Bode for Afghan Women?
An Afghan woman and her children carry bags on their heads as they walk along a path on the outskirts of Mazar-i-Sharif, 5 November 2015. AFP/Farshad Usyan
Statement / Asia

The Economic Disaster Behind Afghanistan’s Mounting Human Crisis

Donors and Afghan state agencies must urgently tackle an economic crisis building up since 2014, when foreign troops started leaving and political instability worsened. The starting point must be a socio-economic assessment of just how big the problems are.

­As Afghanistan’s international donors meet in Brussels in a summit co-hosted by the European Union and the Kabul government on 4-5 October, Afghanistan’s rapidly deteriorating economy must be their central concern. Before this and an escalating humanitarian crisis merge to reach a dangerous critical mass, all must agree on several priorities – alongside renewed efforts to bring peace and political stability: realistic planning based on a thorough new socio-economic assessment, currently absent; adequate aid and support for state policy implementation, especially to help an alarming rise in numbers of displaced and shelterless people; halting repatriation of Afghan refugees, especially from Europe and Pakistan; and boosting investment and above all job creation in the country.

Afghanistan’s impressive average annual growth of nine per cent from 2002-2013 has declined rapidly since 2014. According to the World Bank’s World Development Indicators, annual GDP growth fell from 14.4 per cent in 2012 to 2 percent in 2013, and 1.3 and 1.5 per cent in 2014 and 2015 respectively. This drastic economic decline is mainly the result of the post-2014 international military drawdown and the year of intensified political instability that followed the 2014 election. Foreign troops once brought hundreds of millions of dollars into the Afghan economy, and their departure from 800 bases, large and small, deprives the country of what was after 2002 its largest single source of revenue. By one estimate, more than 200,000 Afghans have now lost jobs in logistics, security, and other sectors of a war-driven economy.

Heightened security concerns, political uncertainty and the erosion of the rule of law since 2014 have added to a devastating loss of confidence by consumers, producers and investors. Pervasive fears of a political meltdown have led to a surge in capital flight, with both wealthy and middle-class Afghans moving assets to the Gulf States, Pakistan, Iran, Turkey and Central Asia. Afghanistan’s human capital shrank too, especially among the urban middle class that had emerged after 2001 to play a stabilising role in Afghan politics. Hundreds of thousands of Afghans, mostly young and educated, left the country in 2014 and 2015, often to seek refugee status in Europe.

This sudden economic reversal has considerable political, security and social implications. Rising unemployment and widespread poverty is already widening the legitimacy gap between the National Unity Government (NUG) and the Afghan public, and expanding the reservoir of grievances that insurgents as well as hardline ethnic and regional players could further exploit. Unfortunately, it is not the NUG’s only pressing problem.

An Underestimated Humanitarian Crisis

The economic crisis may have been predictable, but its impact remains poorly understood and insufficiently reflected in strategic thinking and policies about the country’s future. The most revealing indication of such gross underestimation of the situation is the absence of any current, reliable socio-economic data. Three years after the economic reversal began, neither the NUG nor the international community have conducted any substantial assessment of the impact of the collapse of the war economy on the Afghan people and state.

The available figures show that the most vulnerable segments of the population are bearing the brunt of the burden. According to the Afghanistan Living Conditions Survey, the unemployment rate rose from 9.3 per cent in 2011-12 to 24 per cent in 2014. During the same period, the number of people who were not engaged in gainful employment increased from 26.5 per cent to 39.3 per cent of the labour force; among women, the rate increased from 42.4 per cent to 49.8 per cent. Those who manage to find work have to provide for a large number of dependents, with 47 per cent of the population under the age of fifteen. Although no such figures are available for 2015 and 2016, anecdotal evidence makes it abundantly clear that these negative trends are worsening. With Afghanistan’s estimated 32.5 million people growing by perhaps three per cent annually, adding half a million people to the work force every year, the decline in employment opportunities can only worsen.

Even without reliable Afghan government statistics for 2015 and 2016, the trends indicated by anecdotal evidence and UN figures point to a silently evolving, increasingly alarming humanitarian crisis. According to UNHCR, the total numbers of “people of concern”, including Internally Displaced Persons (IDPs), refugees and returnees, nearly doubled between 2013 and 2015, rising from 985,197 to 1.77 million people. UNOCHA estimates that 265,141 more were displaced from their homes in 31 of 34 provinces between 1 January and 15 September 2016.

On top of this has come an unprecedented rise in recent months in the return of registered and unregistered refugees from Pakistan, averaging 5,000 people daily in early September. Combined with the new internally displaced, an alarming one million (57 per cent of whom are children) could be on the move just as winter sets in between September and December 2016. All will require urgent food assistance, health, shelter and other essential services. This spike in the numbers of IDPs and returnees will increase the percentage of the population facing seasonal or permanent food insecurity beyond the current estimate of 40 per cent, and will further strain already meagre economic and employment opportunities and public services.

As Budgets Shrink

The decline in economic opportunities has long-term consequences for overall political stability. Over the past three years, state institutions have become by far the largest source of employment and providers of essential public services, but available economic resources are shrinking fast. Reductions in donor assistance and international contracts are increasing the fragility of the post-2001 political order, which is largely based on networks of patron-client relations in which powerful political players have become dependent on the continuous flow of international largesse. As international military spending and contracts shrink, these networks will rely even more on the proceeds of the informal economy including corruption, criminality, the opium trade and the illegal exploitation of resources such as mines.

The decline in economic opportunities has long-term consequences for overall political stability.

The NUG’s inability or unwillingness to respond to these challenges has profound implications for both its legitimacy and the future of the post-Taliban political order. In the Asia Foundation’s 2015 Survey of the Afghan People, citizens who believed the country was going in the right direction declined to 37 per cent from 55 percent in 2014. After insecurity, worsening economic conditions were cited as the main reason for such pessimism. While the NUG inherited problems that were already mounting before it was formed in September 2014, the Afghan public increasingly links the worsening economy with the government’s policies and/or inability to perform. While the NUG has prioritised the economy in its policy reform agenda, popular expectations created by such rhetoric have yet to be matched by a track record in forging or implementing reforms, let alone actual economic benefits. Aside from some major infrastructure projects such as energy transit routes, which depend on good security and may take years to make a tangible impact on the economy, the NUG has done little to respond to immediate asks such as job creation or the protection of the private sector against rising criminality and insecurity. 

The potential gains of some of the government’s most important infrastructure projects, including CASA 1000, which aims to carry power from Central Asia to South Asia, are threatened not just by insurgent violence but also by increased social and political discord over the distribution of national resources. For instance, in mid-2016 a persistent, predominantly Hazara Enlightenment protest movement emerged to oppose the government’s decision to change the route of another power transmission line bringing electricity from Turkmenistan to Afghanistan, from a route passing through the Hazara-majority Bamiyan province to one running through the Salang Pass. Absent transparency and accountability, such policy decisions could further escalate ethnic tensions.

The government’s ability to implement economic reforms is hampered by internal political gridlock, bureaucratic hurdles and pervasive corruption. Capacity constraints in most government ministries continue to adversely affect the execution of development projects. Payments are delayed to private sector contractors, suppliers and even the state’s own personnel. As of September 2016, nine months into the current Afghan fiscal year, the NUG has spent only 30 per cent of a $2.5 billion development budget. This slow pace in spending and execution is depriving a cash-starved economy of much-needed funds.

The government’s ability to implement economic reforms is hampered by internal political gridlock, bureaucratic hurdles and pervasive corruption.

Despite its many weaknesses and shortcomings, the NUG has succeeded in maintaining a degree of macro-economic stability and addressing the budgetary shortfalls it encountered in 2014. It has also raised domestic revenues above targets set by the International Monetary Fund. However, the new Afghanistan National Peace and Development Framework, 2017 to 2021 is based on an unproven assumption that the three-year economic decline has been stemmed and that over the next five years the economy will grow by an average of five per cent. Domestic revenue mobilisation is in fact a poor indicator of the economy’s overall health, and the current effort to raise more money runs the risk of further shrinking an already fragile and struggling formal tax base.

While taxation rates remain low in comparison to other countries in the region, there is a widening mismatch between what the government demands in terms of revenue and the services it offers. Meanwhile the costs of doing business are increasing, and rising violence and weakening government control is exposing an already shrinking private sector to extortion and other acts of criminality, including kidnapping for ransom. Those responsible may be the Taliban, urban criminal networks or a range of other actors, some with links to the state. 

Despite a rise in revenue collection in 2015, the U.S. Special Inspector General for Afghanistan Reconstruction (SIGAR) estimated that over half of the country’s customs revenues were lost to graft that year. Public sector appointments, including critical security sector positions, are often casualties of infighting and nepotism. All this indicates the complicity of powerful political networks at the highest levels of government, costs the state and Afghan people hundreds of millions of dollars in revenues, and curtails the delivery of even basic services. Astonishingly, corruption within the security sector extends to the sale of military hardware and ammunition to insurgents.

Recommendations

As international donors and the Afghan government devise their responses to address the deteriorating situation in Afghanistan, they should prioritise – alongside coordinated efforts to bring peace and political stability – a comprehensive and robust approach to an escalating humanitarian crisis, and adopt a more realistic vision of economic recovery and growth. They should:

  • Conduct a thorough national assessment of post-2014 socio-economic conditions and challenges to serve as the basis of more realistic strategic planning;
     
  • Urgently respond to the fast-growing humanitarian crisis, pledge adequate resources for the immediate needs of IDPs and refugee returnees for shelter, food, health and sanitation, and support the NUG in devising and implementing a coordinated policy to meet their longer-term needs for access to gainful employment;
     
  • Halt the deportation of Afghan refugees and asylum seekers from Europe; encourage the Pakistan government to end coercive, involuntary returns of all Afghan refugees, registered or unregistered; and provide financial and other incentives to sustain the millions that remain; 
     
  • Create new momentum in the fight against fraud by (i) tackling politically connected corruption networks within government; (ii) integrating robust anti-corruption policies with current revenue collection efforts; and (iii) ensuring robust oversight over payments in government contracts to private contractors and suppliers, while also streamlining these payments;
     
  • Ensure that funds reach the provinces, to promote more equitable distribution regionally and improve the writ of the government, while also prioritising the most under-developed and isolated regions;
     
  • Consider boosting private sector investment through guarantees and other protections and incentives; in particular encourage job-generating and long-term investments by the private sector through tax incentives; and provide, as far as possible, access to public services, including electricity, to firms that create jobs;
     
  • Take immediate, coordinated measures to ensure the security of private investors and business persons, including by targeting criminal networks, some containing elements within or linked to government institutions.  

CORRECTION: An earlier version of this article wrongly stated that the Enlightenment protest movement emerged to oppose the government's decision to change the route of the CASA 1000. This has now been updated to correctly cite that the opposition was towards the government's decision to change the route of another power transmission line bringing electricity from Turkmenistan to Afghanistan.

Mary Akrami, Laila Jafari, and Fawzia Koofi attend the Intra Afghan Dialogue talks in Doha on July 7, 2019. KARIM JAAFAR / AFP
Briefing Note / Asia

What Will Peace Talks Bode for Afghan Women?

This is the third in a series of three briefing notes that discuss and analyse the nascent peace process in Afghanistan while focusing on frequently raised questions.

On 29 February, the Taliban and the U.S. signed an agreement that commits the U.S. to a fourteen-month phased withdrawal of military forces in exchange for Taliban commitments to prevent Afghanistan from being used as a safe harbour for terrorists. The agreement also obligates the Taliban to commence peace negotiations with the Afghan government and other Afghan power brokers. This breakthrough comes after a decade of on-and-off U.S. and other efforts to catalyse a peace process, throughout which many have raised serious concerns about the risk that legitimising the Taliban and returning them to some degree of political power in Afghanistan would subject Afghan women once again to forms of oppression and exclusion that they endured during Taliban rule in the 1990s.

Afghan Women and Peace with the Taliban

Negotiating an end to the war in Afghanistan will require compromises. But which compromises? What might be sacrificed? Does making a deal with a conservative religious movement mean selling out human rights, including women’s rights? CRISISGROUP

Would a peace process jeopardise women’s rights?

As with other topics for negotiation, neither side is in a strong enough position in the conflict to dictate its stance on women’s rights in a political settlement.

The short answer is yes. The Taliban have views about women’s rights and status that are different from those of the Afghan government’s current leadership, so any agreement that gives the Taliban a share of power in Kabul will probably result in some degree of degradation in how women’s rights are defined and protected. Difficult talks on this issue should be anticipated as part of intra-Afghan negotiations that bring together the warring parties. As with other topics for negotiation, neither side is in a strong enough position in the conflict to dictate its stance on women’s rights in a political settlement. It is plausible that a negotiated outcome on issues affecting women would reflect the middle ground between the Taliban and those who will advocate for preserving existing protections or would be vague enough to permit differing interpretations.

The Taliban do not, however, seem to have fully formed positions about how precisely they would approach women’s rights if they return to government. On the one hand, Taliban officials have consistently told Crisis Group (and others) that they do not seek a return to the past and would not try to reimpose the rules enforced by their former Ministry for the Propagation of Virtue and the Prevention of Vice. A Taliban official said, “Many negative things within the Taliban definitely need reforming, such as the rigid rules”. On the other hand, the Taliban have avoided specifying which of their old rules could be relaxed and which parts of the current legal order they consider un-Islamic by their strict interpretations.

Occasionally the Taliban have expressed views on some specific limitations on women’s roles; during a 2019 intra-Afghan dialogue, for instance, one Taliban representative reportedly told a female participant that a woman could be prime minister of a future Afghan government but not president or a judge. Nevertheless, the Taliban overall have projected an ambiguous posture on women’s issues. They have said women should continue to enjoy rights to education and work so long as those rights are consistent with Islamic law and Afghan culture, without spelling out how such restrictions would limit women’s rights compared with the status quo. Based on Crisis Group discussions with Taliban figures at various levels of seniority, this posture is not only a bargaining tactic on the insurgents’ part; rather, it also appears to reflect a lack of well-defined Taliban policy.

Whatever deal emerges from negotiations among Afghans may be constrained somewhat by the fact that their country remains dependent on foreign aid, including from donor governments that will prioritise enduring protection of women’s rights. The Afghan government collects only $2.5 billion per year in revenue while spending $11 billion, and its expenses are projected to remain at similar levels in the coming years. In discussions with Crisis Group, Taliban officials have expressed hope of negotiating peace in a way that avoids a disastrous aid cutoff, but it remains unclear if they could or would meet donor requirements on gender and other rights and governance issues.

Shaharzad Akbar, head of the Afghanistan Independent Human Rights Commission, told Crisis Group that peace will require compromise on both sides. She noted that the Taliban will face pressure at the negotiating table to offer assurances on issues such as women’s and minority rights as well as freedom of speech; conversely, she predicted, the other side in the negotiations may need to concede some fundamental changes in the nature of the Afghan state and constitutional order. “Everything will be on the table”, she predicted.

Neither side will enjoy control over the process and questions about women’s rights will likely be the subject of tough negotiations.
Afghan women listen to a speech delivered by Afghan President Hamid Karzai during an event marking International Literacy Day in Kabul September 28, 2010. REUTERS/Omar Sobhani

Despite the evident risks, the specific outcome of a peace process on women’s rights and related issues cannot be precisely forecast. Neither side will enjoy control over the process and questions about women’s rights will likely be the subject of tough negotiations. Negotiations will take place under the influence of strong advocacy for women’s rights on the part of some participants as well as some groups and individuals outside the circle of negotiators. The danger that compromise language in a peace accord could be vague and that real determination of women’s status and opportunities might be left to the vagaries of implementation means that those who support strong protection of women’s rights will need to negotiate every possible advantage at the peace table itself.

Since 2002, Afghanistan has seen historic advancement of women’s rights, freedoms and achievements – for some. These advances, as Human Rights Watch puts it, are still “partial and fragile”, and women even in government-controlled areas of the country continue to fight for implementation of their legally guaranteed rights. Such guarantees will be debated at the negotiating table, potentially resetting Afghan women’s political struggle. But the social advancements born of this struggle over the past eighteen years cannot be so easily undone by the intra-Afghan talks. A peaceful end to Afghanistan’s conflict could enable this struggle – which would be sure to continue after any negotiated settlement is reached – to extend more broadly throughout the country, including to more women who have lived under the Taliban’s insurgency.

What is at risk for Afghan women?

Many women benefited significantly from the freedoms and opportunities they gained after 2001, especially in cities. Improved access to health care more than halved the number of women dying in childbirth. After being largely excluded from public life under the Taliban, women now hold 27 per cent of civil service jobs and quotas have brought a substantial number of women into parliament. Relatively few women had formal schooling under the Taliban, whereas now 100,000 women attend university and 3.5 million girls are enrolled in school.

The benefits have not been entirely limited to government-controlled areas. Many of those 3.5 million girls attend classes in Taliban-controlled parts of the country. The Taliban’s earlier dictates forbade instruction on “Muslim women’s improper liberation”, but in the last ten years the Taliban have adopted and enforced a formal policy endorsing girls’ education. In practice, girls’ education often stops at puberty in Taliban territory, though the Taliban’s strict edicts have given way in many respects to prevailing local norms.

It is important to note that Afghan women have complex and mixed views of the Taliban and its record. During the 1990s, the Taliban sought to impose one of the most severe regimes of gender segregation anywhere in the world, banning women from leaving homes without a male chaperone, limiting girls’ access to education, imposing a strict dress code, and inflicting harsh punishments like stoning that nearly all Muslim-majority countries upholding some form of Islamic law have dispensed with.

Nevertheless, some women do not regard the Taliban as enemies, although it is difficult to ascertain how many given that as much as 76 per cent of the country’s women are estimated to live in rural areas, a population that lacks the same platforms for expression as educated urban Afghans and is less accessible to researchers and journalists. Some Afghan women credited the Taliban with imposing order in the mid-1990s and reducing the widespread sexual and gender-based violence of the preceding civil wars. Moreover, an unknown number of women have supported the Taliban – sometimes actively, in roles as spies, smugglers, couriers, medics, logisticians and recruiters – though it is difficult to gauge how much choice women have had in offering this support.

Some women living in Taliban-controlled areas today, when it is possible to research their views, continue to credit the group for providing security. But even some who appreciate the Taliban’s imposition of order condemn the group for its effective banishment of women from public life and its stark diminishment of women’s legal status.

Some Afghan women are voicing fears that the negotiations may result in restoration of the Taliban’s old rules from the 1990s.

Now that the peace process has raised the prospect of Taliban returning to some degree of national power, some Afghan women are voicing fears that the negotiations may result in restoration of the Taliban’s old rules from the 1990s. Other Afghan women have countered that the country’s war-torn status quo is unacceptable and that talking to the Taliban is the only way to achieve a desperately needed peace.

What might Afghan women gain from the peace process?

Afghan women’s views about the potential gains from a peace process cover a spectrum of opinion. Urban women tend to be most sceptical about the Taliban entering into mainstream politics. Rural women with whom Crisis Group spoke in recent months often expressed a different view.

During recent Crisis Group interviews in Kandahar province, rural women spoke with urgency about ending the bloodshed, which is greater in rural than in urban areas. After losing so many relatives in the war, one said, rural women feel impatient for the Taliban to reclaim a share of government power, even if that means a return of conservative religious rules. Living under the Taliban insurgency, for many, has also meant economic deprivation and inequality of aid delivery. At the same time, she expressed hope that the Taliban would relax some of the edicts they imposed in the 1990s, such as the requirement that women should be chaperoned in public. Several rural women said they want their daughters to be educated, unlike their mothers and grandmothers. But ultimately, for many women, what is paramount is freedom from the war that has left so many as widows, mourning mothers and with lives molded by conflict. “Freedom for us means an end to the war, an end to our children and husbands dying”, said a woman from a village north of Kandahar city. Another female villager emphasised to Crisis Group: “Peace is the first thing”.