WASHINGTON: The International Monetary Fund has warned that the prolonged conflict, a heavy dependence on aid, and the impact of corruption and political uncertainty are preventing Afghanistan from building a strong economy.

In their second review of the Afghan economy, released in Washington this weekend, IMF directors noted that with financial and security support from the international community, Afghanistan has made important strides in rebuilding its economy since 2002.

But the directors warned that the country “remains conflict-affected, poor, and aid-dependent,” although macroeconomic policies have been broadly successful in maintaining fiscal and external sustainability.

The directors also urged Afghan authorities to prepare for lower external support to encourage growth by strengthening institutions and addressing corruption. They also stressed the need for building up physical and human capital, developing the financial sector, making access to financial services more inclusive, and improving the business climate.

The observations support Islamabad’s stance that instead of blaming Pakistan for Afghanistan’s failures, the United States should help Kabul in overcoming its domestic problems. Pakistan too identifies lack of governance, corruption and an ever-growing insurgency as Afghanistan’s main issues.

The United States, however, argues that the efforts to stabilise Afghanistan cannot succeed as long as there are safe havens in Pakistan that the insurgents use for carrying out attacks in Afghanistan.

The new US strategy suggests dealing with by defeating the Taliban in the battlefield to force them to seek reconciliation with the Kabul government.

The IMF report noted that Afghanistan’s real GDP grew by 2.4 per cent in 2016 due to higher agricultural output, up from 1.3pc in 2015. For 2017, growth is projected at 2.5pc and at 3pc for 2018.

But it warned that this was “below the rate of growth needed to reduce unemployment” and was “contingent on an improvement in confidence, implementation of reforms, and continued strong donor support.”

Published in Dawn, December 12th, 2017

Opinion

Editorial

UNGA speech
25 Sep, 2022

UNGA speech

CRISES test a nation’s resilience but also provide opportunities to rise and move forward. Prime Minister Shehbaz...
Dar’s return
Updated 25 Sep, 2022

Dar’s return

Dar will now be expected by his party to conjure up fiscal space for the govt to start spending ahead of the next elections.
Iran hijab protests
25 Sep, 2022

Iran hijab protests

FOR over a week now, Iran has been witnessing considerable tumult after a young woman died earlier this month in the...
Post-flood economy
Updated 24 Sep, 2022

Post-flood economy

WITH a third of the country — especially Sindh and Balochistan — under water, over 33m people displaced, and...
Panadol shortage
24 Sep, 2022

Panadol shortage

FROM headaches to fever to bodily pain — paracetamol is used ubiquitously in Pakistan as the go-to remedy for most...
Star-struck cops
24 Sep, 2022

Star-struck cops

IN this age of selfies and social media, it is easy to get carried away in the presence of famous people, even if ...