KABUL (TCA) — Seventeen years after the Bonn Agreement under which a new interim administration was established, Afghanistan still faces widespread insecurity and violence. Over half of the population lives in poverty. Unemployment rates are high. The country’s rapid population growth places pressure on service delivery and the number of young Afghans joining the labor force far outstrips the number of available jobs, says the World Bank’s new report “Afghanistan to 2030”.
Declines in grant assistance accompanying the drawdown of international security forces has weakened demand and led to a broad and sustained economic slowdown, according to the report.
While much progress has been made, institutions do not adequately mediate competition and conflict over resources, protect property rights, or keep citizens safe.
International evidence shows that building strong institutions takes decades and requires specific political conditions that are difficult to generate.
The “Afghanistan to 2030” report highlights a set of priorities for economic development in Afghanistan, taking ongoing fragility as a given.
The report answers the following questions:
– How can Afghanistan overcome its current economic slowdown?
– How can the government, businesses, and households best manage the risks associated with fragility?
– What kind of growth model can achieve development needs in the context of ongoing fragility and resource constraints?
– How can economic development priorities be financed?
The report finds that the right combination of policies and continued international assistance can help Afghanistan achieve sustained high rates of growth despite ongoing fragility.
This would require policy measures to support households and businesses deal with the risks of insecurity. It would also require a balanced growth strategy, involving increased public spending on human capital, improved agricultural productivity, and the mobilization of new investment in the extractives sector.