US spent billions on Afghanistan and failed to build a sustainable economy

Afghanistan’s economy grew and millions of Afghans gained access to education, health care and jobs. But the economy the US helped build relies heavily on foreign aid, much of which evaporates overnight. International experts say Afghanistan’s economy and the welfare of its people are on the verge of collapse after the US exit and takeover by the Taliban last month.

“When there was aid, we were able to pay salaries, buy electricity and we fund our national army,” said Salma Alokozai, who served in the finance and education ministries of the fallen Afghan government, and the World Bank and International contacted with. monetary Fund. “The private sector was doing fine. Right now, there is no private sector, and no aid money.”

A US Defense Department official put it more bluntly in a report last month, telling the US Special Inspector General (CIGAR) for Afghanistan Reconstruction: “When you look at how much we spent and what we got for it, So it’s mind boggling.”

P. Michael McKinley, the US ambassador to Afghanistan from 2014 to 2016, acknowledged, “On balance, nation-building in Afghanistan was not successful.”

According to Cigar, a monitoring agency created by Congress, the US alone has spent $145 billion over 20 years to rebuild Afghanistan. This is on top of $837 billion in US military spending on the country. According to Cigar, this is more than the roughly $137 billion in today’s dollars that the US spent on the Marshall Plan to rebuild Europe after World War II, and about $70 billion to rebuild Iraq. Had gone.

Critics say that infrastructure built with foreign aid—roads, schools, health facilities—but not a self-sustaining private sector. Katherine Lutz, co-founder of Cost of War, a Brown University project that studies US spending, said, “Money often went to projects that weren’t sustainable with current Afghan revenues or other ways they would have been without the US. could support moving forward.” abroad.

Most of the aid flowed through American contractors to meet US priorities, such as counterinsurgency and combating suspected terrorists, and not to Afghans and Afghan-owned businesses. Afghan officials have complained for years that they did not have enough influence over what aid money was spent. The torrent of money also fueled corruption that undermined the legitimacy of the Washington-backed government. Public distrust of leaders in Kabul facilitated the return of the Taliban to power.

“Corruption was the biggest reason for the fall of the government,” said Ms. Alokozai.

The failure to consolidate the Afghan state was of paramount importance in agriculture. Despite $2 billion in US spending, agricultural production has barely increased over the past two decades. Its share in GDP has fallen from 70% in 1994 to 20%, even though two out of three Afghans still live in rural areas.

In 2010, the US Department of Agriculture paid the American Soybean Association to introduce soybeans to Afghan farmers. Yet a UK government study two years ago concluded that crop growth and crop rotation and its water requirements were not in line with the Afghan agricultural system. According to a 2014 letter by Cigar, the ASA had not studied the feasibility of the project before implementing it.

An Afghan farmer participating in a soybean project in Balkh province said there was not enough water to grow the crop, proper seeds were not available locally, and there was no market for any crops. “It was a huge failure,” the farmer said. Cigar agreed.

ASA spokeswoman Wendy Brannon disputed this. She added that the project “has achieved success in line with or exceeding its original objectives.” “Our admixture and sensory analyzes have shown that Afghans eat and prefer soy and it may be a viable source of protein in a country with severe protein deficits,” he said.

America sought to introduce alternative crops to the opium poppies. But Afghan farmers were reluctant to give up the poppy, one of their few cash crops. Others, such as saffron, pine nuts and cotton, were far less attractive, and poor roads and poor storage infrastructure made exports difficult.

The US Agency for International Development spent $335 million in the construction of the Tarkhil diesel power plant to supply electricity to Kabul. But diesel is expensive and dangerous to transport in Afghanistan. Until the plant opened in 2010, a year behind schedule and tens of millions of dollars over budget, a separate project funded by the Asian Development Bank linked Kabul to Uzbekistan with very cheap hydroelectricity. As of 2015, Tarkhil produced only 1% of its capacity and 0.35% of Kabul’s electricity.

Nation building efforts improved the lives of Afghans in significant ways. According to the World Bank, the infant mortality rate has fallen from 82% to 46%. Life expectancy increased from 57.2 years in 2003 to 64.8 years in 2019. Before the Taliban takeover, which threatened girls’ access to education, more children could go to school and study; Many more Afghans had access to healthcare and education.

Rapid urbanization has changed the face of big cities like Kabul, Mazar-e-Sharif and Herat. Kabul has coffee shops inspired by minimalist Scandinavian design, restaurants open until late at night, and a few private internet service providers.

Some figures are superficially impressive: GDP more than quadrupled from 2003 to $19.8 billion in 2020. But much of it was a spinoff effect of the Western military presence. Poverty usually fell heavily in conflict zones as Western troops brought logistics and development to win local hearts and minds.

GDP growth coincided with the end of the increase in US troops by 2012; GDP has remained stable since then. In recent years unemployment has risen to 23.9% in 2017. Huge inequalities remain between women and men, and between urban and rural residents. Women’s unemployment rate, at 40%, is more than twice that of men. Only one in five women is literate, compared to half of all men. Before the Taliban came to power, only one in four girls attended high school, compared to nearly half of all boys, a gap that could widen if the Taliban ban girls’ secondary education, many fear.

The World Bank projected 55% of the population to live below the poverty line in 2019, up from 34% since 2008.

Mr McKinley, the former ambassador, said the country never developed a plan to provide long-term security without foreign forces. “The benefits you can measure, like the expansion of education or health services, are the most vulnerable” to deteriorating security, he said.

Afghanistan is dependent on imports with three-fourths of its power. Its trade deficit last year was equivalent to nearly a quarter of GDP, much of it financed from foreign aid.

Aid has been cut and the Taliban no longer have access to the country’s foreign exchange reserves to pay for imports. Shah Mahrabi, a senior member of Afghanistan’s central bank, said the loss of that access would lead to “the collapse of the economy and the banking sector.”

The Biden administration said on Friday it would allow US agencies, aid groups and the private sector to send food and medicine to Afghanistan, providing limited exemptions from terrorist sanctions on the Taliban, which have reduced trade and finance in an effort to restrict trade and finance in the country. has done. An imminent humanitarian crisis.

More than a third of government revenue came from taxes on imports; Revenue has fallen, money has been drained to pay salaries of government employees. More than half of them are teachers; If hundreds of thousands are not paid, it can be catastrophic for the children.

Afghanistan’s economy could shrink by 4% to 13% this year, and the poverty rate could rise to 97%, according to a United Nations Development Program report this month.