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Afghans fear for economy after U.S. leaves

The country has grown dependent on foreign military and donor spending.

August 19, 2011|Mark Magnier

KABUL, AFGHANISTAN — Sorosh Tokhi's wallet is a lot fatter since foreign troops moved into Afghanistan in 2001. As an interpreter for the U.S. military earning $700 a month, he has bought a flat-screen TV and a sport utility vehicle, helped his parents out and paid for relatives' tuition.

So President Obama's recent announcement that U.S. troops will step up the pace toward a 2014 departure makes him nervous.

"Life's been good, hell yeah," said Tokhi, 24, shopping with friends on upscale Shar-e-Naw Street in Kabul, the capital. "But there's lots of change coming. When the U.S. troops leave, this place is going back to civil war."

The West's measured dash for the exit has Afghans bracing for an economic meltdown with reduced security, political instability, more violence and more economic destruction.

The World Bank estimates that 97% of Afghanistan's economy is tied to international military and donor spending, with the Senate Foreign Relations Committee warning of "severe economic depression" after 2014. The State Department and the U.S. Agency for International Development spend about $320 million a month in Afghanistan.

For The Record
Los Angeles Times Tuesday, August 30, 2011 Home Edition Main News Part A Page 4 News Desk 2 inches; 70 words Type of Material: Correction
Afghanistan economy: An article in the Aug. 19 Section A about Afghans' fear for their economy as the U.S. begins to withdraw its troops misstated the relationship between foreign aid and the economy and the percentage amount involved. Rather than 97% of the Afghan economy last year being tied to international military and donor spending, the World Bank estimates that total aid was equivalent to 91% of the country's economy.

Though U.S. officials pledge to help Afghanistan beyond 2014, some here are skeptical. They point out that the United States in the 1980s provided weapons and training to Afghan fighters opposed to Soviet occupation of the country, but lost interest as the Soviets pulled out and Afghanistan faced civil war.

Many Afghans fear the U.S. will soon shift more foreign aid to places such as Egypt, Tunisia and eastern Libya, which have seen public uprisings calling for democracy.

Afghanistan has little manufacturing or mining, despite its rich mineral wealth, and a chronically weak government. And though the Finance Ministry has pledged to fund its own budget by 2014, it's unable to collect much tax revenue outside the capital, given security concerns and citizen resistance.

Under pressure from foreign envoys, the Afghan Chamber of Commerce and Industries hopes to craft an economic transition plan that relies on private investment as foreign aid declines. Its efforts are hampered, however, by burdensome laws and regulations, corruption, deteriorating infrastructure and security problems, officials say.

Like Tokhi, several businessmen in Kabul said they have prospered since the Taliban left the city in 2001 despite the many years of war, and they now worry that their financial successes will come to an end.

The construction sector has boomed, with customers such as the U.S. military, United Nations agencies, wealthy Afghans and local warlords. Even some of those who have not done as well in the war economy, emphasizing that aid and prosperity often are not distributed evenly, wondered what amount of good might come when Afghanistan is on its own.

Many merchants and residents said they feared a resurgence of Taliban influence and violence.

"After every blast, my business goes to sleep for six months," said Ismail Abdul Salam, who said he often sells toilets to warlords with a penchant for large, gaudy homes with faux Corinthian columns. "Unfortunately my costs don't."

Mushtaba Nijati said he opened his shop selling water heaters a few years ago and has maintained a steady clientele, but now expects business to go over a cliff.

"Of course we're worried," Nijati said. "Why did America come if it's going to turn around and leave? This economy will collapse."

Others, like tailor Aamoz Majidzada, whose shop consists of little more than wooden boards, dangling wires and a foot-powered sewing machine, are unimpressed by the meager progress of most Afghans.

"Corrupt politicians, drug kings, warlords, they've made millions," Majidzada said. "I'm so angry seeing them in their mansions, eating fancy food, when I can't make enough to feed my three children.

"Since America invaded, the rich get richer and the poor get poorer. I don't care if they stay or leave."

Adding to the country's bleak outlook, shopkeepers and analysts said, is just how little politicians are doing to prepare for the nation's economic future.

Take Kabul Bank, where well-connected shareholders "borrowed" nearly $1 billion for private projects, said Habibullah Takhari, 63, a former government official. "The economy's in crisis and there's no plan," he said. "When foreign troops go, everything will be worse, for us and the world."

Though poor security and sometimes badly executed Western aid remain huge impediments, analysts said, Afghanistan ultimately has lost a historic chance to rebuild, train its citizens and gain economic traction.

"It was a golden opportunity," said Thomas Ruttig, co-director of Kabul-based Afghanistan Analysts Network, an independent research group. "But who's to blame? Sure there's huge corruption. But how the economy works, the political system, were imposed by the West."

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