Said Issaq Said


Presently there are three wars going on in Afghan theatre.

War against terrorism

Drugs war, and

War on poverty

No body can deny the fact the government of Afghanistan is losing  in all these fronts.

Afghan government is not admitting the  reality, that  they are not  addressing the nation’s economic problems  as required.  But instead they say to fix these problems requires time. 

Yes  !!  in  a  country where bombs are  carried  by super sonic jets and donkeys are used  to  transport critically needed relief supplies  to desperate men women and children flood victims, the economic development for sure  takes a very long time. There is no need for  diligence  SATUATION HOPELESS BUT NOT SERIOUS.




In Afghanistan (They are killing to make a living). This is due to extreme poverty and unemployment.  It will be a gross injustice to poor Afghan people to shield the lack of competence or willingness of those in charge of war against poverty  in the country.

A look into the biographies of the  economic pundits in the government  of Afghanistan will make somebody condemning  Nobel Prize Committee for unfairly ignoring  such qualifications in  rewarding.  On the other hand to see the tragic living  conditions of  the millions of Afghans destined to hardship  and  hunger as a result of inability  on  part  of development team of the government a  grade of D will be all they deserve.

This is an established fact that if an effective well thought strategy to fight poverty with the same devotion as the war against terrorism is conducted, there will be no need for the other wars. With elimination of poverty there will be no room for terrorists to recruit poor Afghans to destroy their own homeland.

Afghanistan with a per capita income of $293  ( That is what the government claims. The actual figure may be less.) is amongst the poorest countries on the globe.  Afghanistan was ranked 173 out of 178 countries included in UNDP’s 2004 Human Development Index. In fiscal year 2005 gross domestic product of the country amounted to approximately $5.9 billion (excluding $2.7 billions from drugs money). As a matter of fact hand outs and drug money are the major  building blocks of Afghan Economy.

 As per Afghanistan Human Development Report (HDR), the country’s poverty is compounded by a lack of social services, poor health, education and nutrition and human displacement.  The HDR puts emphasis on basic human needs, unemployment poor health and education.

At present Afghan Refugees constitute 23% of the global refugee population, meaning about one in every four refugee in the world is from Afghanistan. Most of these by now are economic migrants rather than political refugees. Pakistan and Iran host about 2 million Afghans. Both of these countries are wrapping up the welcome mat.   UNHCR is trying very hard to convince the host countries not to force the refugees to get out.  The occasional repatriation of some Afghan Refugees from Iran and Pakistan is not because of  improvement of living conditions at home but due to force and coercion of the host countries.  This is another factor contributing to the poverty in Afghanistan.

The Afghanistan Human Development Report, suggests that Afghanistan’s growth should be based on principles of poverty eradication and job creation. Due to lack of reliable statistics, the exact number of  unemployed Afghans is not known , generally it is estimated to be around 40%.  The government plans of job creation specially sustainable employment has not been materialized yet. Only very few temporary jobs under National Solidarity Program (NSP) are being created in some villages.  This is of very short duration, normally not more than three months. Afghan government in “ Afghanistan Compact “  presented at London Conference On January 30-31, 2006, has indicated that 90 million man days of employment will be generated.  Given the size of labor force in the country, this is just a drop in a bucket. Ninety million man days is equivalent to year round jobs for 60,000 persons for five years.

The prolonged quarter of a century of war in Afghanistan has severely affected the education system, thus creating a shortage of skilled workers and surplus of unskilled labor.  As the education system requires time to recover, for the near future this situation will not change.

Oxfam, a British  relief organization,  on November 27, has released a report  on the education condition of the country.  The picture does not look good at all.

Seven million Afghan children  are missing education.   Just one of five  girls attend primary school and one in 20  girls go  to secondary.  Poverty, distance to schools and crippling fees are major obstacles.   Lack of qualified  teachers is also a major problem.

Due to unrealistic  low payment ( $38/moth) it is impossible to have qualified teachers in classes. There are about 20,000 ghost teachers, whose names are  on pay roll and they are not present on school grounds.  There is an urgent need for 53,000 qualified teachers now  and another 64,000 in coming  five years.

2,000,000 students  study under tents. There is a need for $563 millions for school buildings to build 7,800 schools across the country. Only $126 millions has been provided by USAID and World Bank. Text books are also badly needed and that requires $210  millions in the  next five years.

The government under Millennium Development Goal I ( To Eradicate Extreme Poverty)

Has set two targets:

Target—1 Reduce by one half the proportion of people whose income is less than one

                 Dollar a day by 2015,

Target—2 Reduce by one half, the proportion of people who suffer from hunger.

These targets do not seem to be achievable, as there is not much efforts being made towards delivery.  Additionally, it looks the projections are based on some unrealistic assumptions.  In 2015 the population of Afghanistan ( 3% annual growth) will be about 41 millions. According to the figures given in Afghanistan Millennium Development Goals (MDG), in 2004 (i) the proportion of people whose income is less than $1 a day was 53%, and (ii) proportion of people who suffer from hunger was 48%. The assigned target (i) for 2015 is 26% and target(ii) is 24%.  Assuming 2004 population of Afghanistan as 25 millions, there were about 13 million persons with less than a dollar a day income and 12 million were suffering from hunger. If these strategies are successfully carried there will be a reduction of 3 millions in the number of people with income of less than a dollar a day and 2 million less people will be facing hunger.

These targets are ambitious and not achievable.  During the time period between now and 2015, it is expected that the remaining two million Afghan refugees will return. Plus, if there is no effective serious undertaking of alternative livelihoods programs there will be a considerable addition to the population of poor in Afghanistan.



Afghanistan Government has adopted ENRON sort of policy of  covering up the facts.  It  portrays  very rosy pictures of the  economy while the realities  indicate that the road  map is  leading  towards a disastrous destination.

On November 26, IMF issued a statement on Poverty  Reduction and Growth Facility in Afghanistan.  Due to the fact that the statement is  based on  the misleading  information  provided by the government, ground realities are completely ignored, thus making the statement erroneous.

IMF report says that  growth has been sustained, inflation subsided and fiscal and monetary development remained favorable.  THIS IS  FALSE.

Further  the  report states  “ Real GDP  growth is expected to reach

8 percent, as continued activity in construction and  services offset a

9 percent decline in cereal production….Year-on-year inflation, as

measured by the consumer price index  for Kabul, declined to about 5.4

percent by September 2006, ….” National”  year-on year inflation, which covers Kabul and other five cities was 5.2 percent in September.”


The argument  about  the falsehood of  the major  points  of  this report are as following:

1---  There  was no economic growth  at all.  As a matter of fact there  was

         a considerable  decline.  There  was  no mega  projects  launched

         to contribute considerably to the growth. Whatever meager

        development achievement there might have been  was

        counterbalanced  by draught. The fact that no measures of mitigation

        to deal with these natural  adversaries were not  being placed by the

        government like  having flood control structures and water shed

        projects to conserve water is  indication of negligence on part of the

        government of Afghanistan.


2---   Afghan economy is leading on two pillars Drugs  and Donation. There 

         is not of modern day factors of productions deployment to talk  of

         inflation control and fiscal and monetary discipline. The government

         through Da Afghanistan Bank artificially  controls  Afghani price by

         means  of selling  dollars to the exchange market. In other words

         there is no Greenspanization to talk  about  the value of  Afghani.

         Whoever  provided  the  data to  the IMF was completely  unaware of 

         Sky rocketing price hike in  Afghanistan, otherwise IMF wouldn’t

         have stated the inflation rate  as  5.2% As  a matter of  fact the 

         the  experts  inn Kabul estimate the  price hike  of  some of the items

         between 50-100%. Even the CPI o shopping cart indicators  of  the

         Central Statistics Office does not support this low figure of inflation.


3---  FAO has indicated Afghanistan cereal production shortfall in 2006 as

Total wheat production 2006 was 3.71 million tons 13% short of 4.27      million tons in 2005. The  total production of cereal for 2006 is  estimated at 4.8 million tons

Afghanistan requires 6 million tons of cereals in 2006.  This gives a shortfall of 1.2 million tons (20%)

Where is the figure of 9% cereal shortfall?


4---   IMF report says that the government performance “poverty      reduction” was satisfactory.

        The  question is WHAT PERFORMANCE? 

         The  world  Bank, says that 36% of rural households face chronic  or transit shortage of food. Has the  government done any thing to reduce this percentage ?  

        The answer is NO. What constitutes satisfactory performance?

        As a matter of fact this year another two million afghans were added to this class of poorest of  the poor in the world.


If just during the last year Afghanistan lost $800,000,000 of the assistance due to lack of capacity, how will the government be able to handle more funds? The sad part is that there is no serious effort being made to resolve this problem.

Daily cement consumption in Afghanistan is about $2,000,000. Those in charge of economic planning should have foreseen this demand four years ago. And appropriate measures should have been taken to rehabilitate cement plants and establish new ones. Thus by now this money would have to stay within this country.  In Pakistan,  Cement

plants  are expanding their production capacity due to demand for cement in Afghanistan, while here the half a century old cement plants are out of production due to neglect. The same is true with textiles. About a  million  dollars  a  day worth  of textiles  are  imported into  Afghanistan while  the  Afghan  textile  mills with annual  production  capacity about  120  million  meters (1970 figures)  are either discarded  or  producing  at  a  very  low  minimum capacity. The  textile  mills ( at present  public enterprises)  in spite of presidential decree can not sell their products to the army and police  procurement people  because they do  not  bribe them.

In the past year Afghanistan had a trade deficit of $1,000,000,000 with Pakistan .  there are not many things among these imported consumer goods from Pakistan which can not be domestically produced. How long shall this economy endure Pakistani dumping policy? It is not only Pakistan, Iran,  China and  other  countries are also dumping  their low  quality  goods  into Afghanistan markets.  Afghanistan  trade deficit  last  year as per some sources was   $4,000,000,000.   This is financed by  foreign donation and drug money.  Has any body  in  Afghanistan  government  ever thought what  happens if either  the donor countries decide that they no  longer  support a parasite economy or the drug  money is  cut by  any  means ?  Why  there  has no  efforts being made at  least to produce domestically some of  consumer goods?



Let’s turn the clock back to 2003.  We put the import export data  on  the table  plus  projections of future  demands for consumer  goods.  We obviously  realize we  need lots  of things and we can produce them at home. If we do not make provisions  to produce these things in future we have to spend billions of dollars to import them.  Only the above two items of Cement and Textiles if domestically produced will save more than a billion dollars.   This means if our STRATEGISTS had a proper plan to develop this land by now the projects  launched at  that  time  would be operative and every year more than a billion dollars  saved.  Tens of  thousands of  jobs created.


No body can deny the fact that unemployment is the biggest problem of Afghanistan.

Total workforce of the country is estimated at 12millions. Due to lack of any statistics the unemployment could be any body’s guess.  In Afghanistan Compact presented in London Conference Januuary30-31, it has been mentioned that 90 million man days will be provided. According to this only about 300,000 people will earn livings for only one year. Cash for work is good only for temporary employment ( Pain Killer, not a permanent remedy). What happens  day  after, week after  or  year after, the  government  has  failed  to  generate sustainable  employment opportunities  for  millions  of  poor Afghans.  Taking into consideration the repatriation of refugees this 90  million man days will only be matching the labor force returning back. That’s all.  There is a very strong correlation between employment and security and stability. Having this in mind, four years ago  revival of two major institutions QWAI KAR ( labor corps) AND QWAI SABZ ( green forces) was suggested.

As opium production is labor intensive and provides substantial employment opportunities to the very poor rural population, (1.7  million Afghans are employed in this sector), the government has a dilemma in carrying a robust drug control campaign.  The so called Alternative Livelihoods Programs have failed to provide alternatives to the people who are losing their jobs and income by not growing poppies. The reason of failure of these programs and subsequently wastage of aid money is due to lack of coordination and supervision by the government.

Launching major infrastructure projects create sustainable jobs both during construction and after completion. Construction jobs  development  could be  stimulated   by having a  functional mortgage bank to provide credit for those who

need  it.

Most important of all Rural job creation require agro-based industries to develop. This requires energy. Since Rural Afghanistan is many years away from electrification, I have submitted a project proposal “RURAL DEVELOPMENT THROUGH BIOPOWER TECHNOLOGY IN AFGHANISTAN.  

Private Sector:

In order for Afghan economy to function without massive foreign inflow of donor assistance ( Opportunity not Charity), private sector –led economic growth is critical to provide Afghanistan with the employment and revenue.  

Economists at Kabul University are in the opinion that the government could generate about  one billion dollars of revenue annually from this sector only if they effectively privatize the existing  money losing public sector enterprises.

But so far nothing concrete has been done to promote foreign and domestic private investment in the country. On September 1st 2004, a high level meeting chaired by  the vice president, including 6ministers was held to resolve the problems of private investors. Among the resolutions, it was stated that, Land issues must be resolved, electric power shall be provided to industrial plants, tariffs shall be revised. So far these points are not implemented. At that meeting the high participants were mentioning  the fact  that presidential orders to return lands to the industrialist were ignored. This was an admission of weakness  on their part. But they did were short to say that if no bribes are paid nothing could be accomplished  In 1976 Industrial Development Bank of Afghanistan had drafted the industrial tariff. That can be used with certain necessary modifications now too. Operations of NGOs without any responsibilities like taxation etc. is it another draw back in private sector development.

  Lack of development financial institutions, such as industrial development , agricultural development  and mortgage and construction banks are  other major obstacles in private sector development.

The  widespread corruption is the biggest  problem in the country.   Only lately by appointment of the new attorney general  there seems to be some hope in this area.


Afghan government should give a serious consideration to how to turn the economy from a consumer one to that of a production and take some practical steps  to resolve the problems.  The government all  the times with the help of its world  class spin doctors boast  of its  achievements but it  does  not tell the truth what it has not done.

This is what matters most.

With these realities in mind, it will be very difficult if not impossible for the government of Afghanistan to be able to deliver its commitments in Fighting ;



And drugs

Based on these facts as presented, the current deteriorating conditions in Afghanistan are due to lack of the governments firm commitment to serve Afghan People.

This being the case, it is the responsibility of the parliament to address the issue of violations of three articles of Afghan Constitution  ( 10,11,&13) by the government.

Article 10 ( Private Investment)

The  state encourages and protects private  capital  investments and enterprises  based on the  market economy and guarantees their  protections in  accordance with  the provisions of law.

Article  11 (  Trade )

Affairs related  to the domestic and  external  trade   shall be regulated  by law in accordance  with the needs of the national economy  and public interests.

Article 13 ( Economy )

The  state shall formulate and implement effective  programs for development of industries  growth of production, increasing of public living standards and support to craftsmanship.

John Pilger  in his  book  Freedom  Next Time  writes  “ Through all the  humanitarian crisis in living  memory no  country has been abused and suffered more and none has  been  helped  less than Afghanistan.”

With this in mind it would be appropriate  to draw the attention of the supporters of Afghanistan that unless the poverty  is eliminated in that country victory against terrorism, regardless of the number of troops and sophistication of the arsenal would be an illusion.

Before it gets too late the issues  have  got to be addressed  duly. This would be a WIN WIN situation. And the  cost of  not doing much as it has been proven in the past  will be extensive and unbearable.  Though it is late still Afghanistan can be salvaged, provided there is a firm commitment on part of all the stakeholders.

Thirty years ago for my master’s thesis in Industrial Engineering at Asian Institute of Technology, I had developed “A SYSTEMS DYNAMICS MODEL TO STUDY THE PROCESS OF INDUSTRIAL DEVELOPMENT IN AFGHANISTAN”.

This was a computer simulation model analyzing policy implications of different sectors of Afghan economy for twenty years.

With that plus years of professional engagement in activities directly related to economic development of Afghanistan on record, I respectfully present this  to draw your attention to the fact that challenges posed there will not be met without much  difficulty . And it requires  a strong professional backup. My love to that country makes me write this so proper measures are taken to avoid missing the opportunity available.