The Afghan Economy
DOI link for The Afghan Economy
The Afghan Economy book
Afghanistan’s economy has been shaped by a range of different factors. One crucial factor has been foreign aid, an essential source of revenue for a state in the process of reconstituting its own basic capacities. Dependence on foreign aid, however, has created a perverse situation in which the state is more responsive to the fickle wishes of donors than to the demands of the Afghan people themselves. Business organisations have emerged in many different areas of the economy, but given the neopatrimonial character of the state, they have often flourished not because of their competitive superiority, but because their leaders have been able to join the right networks. This has led to debilitating cronyism, of the kind that contributed to the collapse of the Kabul Bank. Agriculture remains an important element of the economy, but is plagued with challenges, including the endemic complexities of the agricultural sector, environmental problems and population displacement in the context of ongoing turbulence. Furthermore, the cultivation of opium, a low-volume, but high-value product, has a distorting effect on the Afghan economy in a range of different ways. Afghanistan is of course part of the global economy, but its ability to participate in that economy has been limited by the difficulties in securing ready routes for the transport of Afghan exports to purchasers. This is something to which the Afghan government since 2014 has been giving particular attention.