Economy Information For History Economics Essay

The economic system of Afghanistan has improved significantly since 2002 due to the extract of multi-billion dollars in international aid and investings, every bit good as remittals from Afghan exiles. It is besides due to dramatic betterments in agricultural production and the terminal of a four-year drouth in most of the state. However, Afghanistan still remains one of the poorest and least developed states in the universe that is extremely dependent on foreign assistance. As of 2010, the state ‘s GDP is $ 29.81 billion and the GDP per capita is $ 1,000.

About 35 per centum of its population is unemployed and unrecorded below the poorness line, enduring from deficits of lodging, clean imbibing H2O, electricity and employment. The Karzai disposal along with international givers have remained committed to bettering entree to these basic necessities by prioritising substructure development, instruction, lodging development, occupations plans, medical attention, and economic reform. The replacing of the opium trade, which likely makes up about tierce of the state ‘s GDP, is one of several possible spoilers for the economic system over the long term.

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Economic history

Historically, there has been a famine of information and dependable statistics about Afghanistan ‘s economic system.

The 1979 Soviet invasion and resulting civil war destroyed much of the state ‘s limited substructure, and disrupted normal forms of economic activity. Finally, Afghanistan went from a traditional economic system to a centrally planned economic system up until 2002 when it was replaced by a free market economic system. Gross domestic merchandise has fallen well since the 1980s due to break of trade and conveyance every bit good as loss of labour and capital. Continuing internal discord badly hampered domestic attempts to reconstruct the state or supply ways for the international community to assist.

Harmonizing to the International Monetary Fund, the Afghan economic system grew 20 % in the financial twelvemonth stoping in March 2004, after spread outing 30 % in the old 12 months. The growing is attributed to international assistance and to the terminal of drouths. An estimated $ 4.4 billion of assistance entered the state from 2002 to 2004. A GDP of $ 4 billion in financial twelvemonth 2003 was recalculated by the IMF to $ 6.1 billion, after adding returns from opium merchandises. Mean alumnus wage was $ 0.56 per manhour in 2010.

Agribusiness and farm animal

Pomegranate production in Afghanistan and Opium production in Afghanistan

The Afghan economic system has ever been agricultural, despite the fact that merely 12 % of its entire land is cultivable and less than 6 % presently is cultivated. [ commendation needed ] Agriculture production is constrained by an about entire dependance on fickle winter snows and spring rains for H2O. As of 2007, the state ‘s fruit and nut exports were at $ 113 million per twelvemonth but could turn to more than $ 800 million per twelvemonth in 10 old ages given the proper investing.

Afghanistan is known for bring forthing some of the finest fruits, particularly pomegranates, apricots, grapes, melons, and mullberry. Several states in the North of the state ( i.e. Badghis and Samangan ) are celebrated for pistachio cultivation but the country presently lacks proper selling and processing workss. It is claimed that some Indian companies buy Afghan Pistacia veras for a really low monetary value, treat them in India and sell to western states as Indian merchandises. However, the Afghan authorities is be aftering to construct storage installations for Pistacia veras since having bumper harvests in 2010.

Workers treating Punica granatums ( anaar ) , which Afghanistan is celebrated for in Asia.

Wheat and cereal production is Afghanistan ‘s traditional agricultural pillar. The overall agricultural production dramatically declined following four old ages of drouth every bit good as the sustained combat and instability in rural countries. Soviet attempts to interrupt production in resistance-dominated countries besides contributed to this diminution, as did the break to trince 2002, more than 4 million refugees returned back to Afghanistan. Many of these former refugees are now involved in the agriculture industry. Some surveies indicate that agricultural production and farm animal Numberss may merely be sufficient to feed about half of the state ‘s population. Deficits are exacerbated by the state ‘s limited transit web, which is presently being rebuilt. A study by the Food and Agriculture Organization ( FAO ) states that Afghanistan was approaching autonomy in grain production.

The handiness of land suited for graze has traditionally made animal husbandry an of import portion of the economic system. There are two chief types of animate being farming: sedentary, practiced by husbandmans who raise both animate beings and harvests ; and mobile, practiced by carnal Herders known as Kuchis. Natural pastures cover some 7,500,000 estates ( 30,400 km2 ) but are being overgrazed. The northern parts around Mazar-i-Sharif and Maymanah were the place scope for about six million broadtails sheep in the late ninetiess. Most flocks move to the Highlandss in the summer to grazing lands in the North. Oxen are the primary bill of exchange power and husbandmans frequently portion animate beings for ploughing. Domestic fowl are traditionally kept in many houses, largely in rural families.

Much of Afghanistan ‘s farm animal was removed from the state by early moving ridges of refugees who fled to neighbouring Pakistan and Iran. In 2001, the farm animal population in Afghanistan had declined by about 40 % since 1998. In 2002, this figure was estimated to hold declined farther to 60 % . An FAO study done in the northern parts in spring 2002 showed that in four states ( Balkh, Juzjan, Sar-e Pol, and Faryab ) , there was a loss of about 84 % of cowss from 1997 to 2002 and about 80 % of sheep and caprine animal. The great bulk of Afghans traditionally raise sheep alternatively of caprine animals because caprine animal meat is non much popular within Afghanistan. After 200, the Afghan ministry of agribusiness and farm animal and USAID have been assisting to regrow the figure of farm animals throughout the state. This is done by supplying Afghan villagers developing and animate beings to get down with.

The state has plentifulness of H2O militias and suited clime for fish agriculture. Fishing takes topographic point in the lakes and rivers, such as in Sarobi and Mahipar country. Fish constitute a smaller portion of the Afghan diet today because fish husbandmans are unable to bring forth adequate fish to maintain up with the demands of clients. Using explosives for fishing, called dynamite fishing, became popular in the 1980s and is still practiced by some even though it is illegal today. [ 9 ] The one-year gimmick was about 900 dozenss in 2003. Most fish and seafood is imported from neighbouring Pakistan, Iran, the United Arab Emirates and other states. [ 10 ] In recent old ages, USAID has helped many Afghans in set uping fish farms across the state. [ 11 ] There are about 300 fish farms throughout the state and the largest 1 is at the Qargha, which supplies fish eggs to the other 1s.


Afghanistan ‘s lumber has been greatly depleted, and since the mid-1980s, merely approximately 3 % of the land country has been forested, chiefly in the E. Significant bases of trees have been destroyed by the depredations of the war. Exploitation has been hampered by deficiency of power and entree roads. Furthermore, the distribution of the wood is uneven, and most of the staying forest is soon found merely in cragged parts in the sou’-east and South. The natural woods in Afghanistan are chiefly of two types: dense woods of oak, walnut, and other species of nuts that grow in the sou’-east, and on the northern and northeasterly inclines of the Sulaiman ranges ; and sparsely distributed short trees and bushs on all other inclines of the Hindu Kush. The heavy woods of the sou’-east screen merely 2.7 % of the state. Roundwood production in 2003 was 3,148,000 three-dimensional meters, with 44 % used for fuel. The devastation of the woods to make agricultural land, logging, forest fires, works diseases, and insect plagues are all causes of the decrease in forest coverage. Illegal logging and clear-cutting by lumber runners have exacerbated this destructive procedure.

Trade and industry

Afghanistan-Tajikistan span after completion in 2007 is one of several Bridgess used for trade between Afghanistan and Central Asia.

The current trade between Afghanistan and other states is at US $ 5 billion a twelvemonth. In 1996, legal exports ( excepting opium ) were estimated at $ 80 million and imports estimated at $ 150 million per twelvemonth. Since the prostration of the Taliban authorities in 2001, new trade dealingss are emerging with the United States, Pakistan, Iran, Turkmenistan, the EU, Japan, Uzbekistan, India and other states. Trade between Afghanistan and the U.S. is get downing to turn at a fast gait, making up to about $ 500 million per twelvemonth. [ 12 ] The Afghan handwooven carpets are one of the most popular merchandises exported from the state. Other merchandises include manus crafted old-timer reproduction, cherished and semi-precious rocks every bit good as leather and pelts.

Afghanistan is endowed with a wealth of natural resources, including extended sedimentations of natural gas, crude oil, coal, marble, gold, Cu, chromite, talc, heavy spars, S, lead, Zn, Fe ore, salt, cherished and semi-precious rocks, and many other stuffs. In 2006, a U.S. Geological Survey estimated that Afghanistan has every bit much as 36 trillion three-dimensional pess ( 1.0A-1012 M3 ) of natural gas, 3.6 billion barrels ( 570A-106 M3 ) of oil and condensate militias. [ 13 ] Harmonizing to a 2007 appraisal, Afghanistan has important sums of undiscovered non-fuel mineral resources. [ 14 ] Geologists besides found indicants of abundant sedimentations of coloured rocks and gemstones, including emerald, ruby, sapphire, garnet, lapis, kunzite, spinel, tourmaline and peridot. In 2010, U.S. Pentagon functionaries along with American geologists have revealed the find of about $ 1 trillion in untapped mineral sedimentations in Afghanistan. [ 16 ] Plans are being made by the Afghan authorities to get down pull outing these but with the Taliban insurgence and the corruptness there is no stating what will go on.

“ We know that the extraction attempts are challenged by distant locations, some of which are in countries controlled or at least threatened by the insurgence. There ‘s weak substructure. This is evidently something that we are seeking to spread out for the benefit of Afghanistan ‘s economic system… So it is a potentially of import development. We ‘re non undervaluing the challenges involved here. But evidently, if these things can be developed over clip, that offers the ability for Afghanistan to hold the resources necessary to develop a modern economic system, a legal economic system, as opposed to the economic system they presently have now, which is to a great extent dependent on narcotics… ”

-U. S. State Department spokesman P. J. Crowley, June 2010

A memo from the Pentagon stated that Afghanistan could go the “ Saudi Arabia of Li ” . [ 18 ] Some believe, including Afghan President Hamid Karzai, that the untapped minerals are deserving at least $ 3 trillion. [ 19 ] [ 20 ] [ 21 ] Afghanistan has signed a Cu trade with China ( Metallurgical Corp. of China Ltd. ) in 2008, which is to a big graduated table undertaking that involves the investing of $ 2.8 billion dollars by China and an one-year income of approximately $ 400 million dollars to the Afghan authorities.

The state ‘s Ainak Cu mine, located in Logar state, is one of the biggest in the universe and is expected to supply occupations to 20,000 Afghans. It is estimated to keep at least 11 million metric tons or 33 billion US dollars worth of Cu. Experts believe that the production of Cu could get down within two to three old ages and the Fe ore in five to seven old ages as of 2010. state ‘s other late announced hoarded wealth is the Hajigak Fe ore mine, located 130 stat mis west of Kabul and is believed to keep an estimated 1.8 billion to 2 billion metric dozenss of the mineral used to do steel. Companies from India, Turkey, China, Iran and others have shown involvement in take parting in the Hajigak Fe ore stamp.

Afghan exports in 2006

Afghanistan ‘s of import resource in the yesteryear has been natural gas, which was foremost tapped in 1967. During the 1980s, gas gross revenues accounted for $ 300 million a twelvemonth in export grosss ( 56 % of the sum ) . Ninety per centum of these exports went to the Soviet Union to pay for imports and debts. However, during the backdown of Soviet military personnels in 1989, Afghanistan ‘s natural gas Fieldss were capped to forestall sabotage by the Mujahideen. Gas production has dropped from a high of 8.2 million three-dimensional meters ( 2.9 A- 108 copper foot ) per twenty-four hours in the 1980s to a depression of about 600 thousand three-dimensional metres ( 2.2 A- 107 copper foot ) in 2001. After the formation of the new Karzai disposal, production of natural gas has been restored once more. [ 26 ] A locally owned company, Azizi Hotak General Trading Group, is presently the chief provider of Diesel fuel, gasolene, jet fuel and LPG in Afghanistan.

Trade in goods smuggled into Pakistan one time constituted a major beginning of gross for Afghanistan. Many of the goods that were smuggled into Pakistan have originally entered Afghanistan from Pakistan, where they fell under the Afghan Trade and Transit Agreement ( ATTA ) . This permitted goods edge for Afghanistan to pass through through Pakistan free of responsibility. This resulted in considerable jobs for the Pakistani authorities, peculiarly its imposts agency who realized that many of the points being resold on the black market in Pakistan were the really same points being allowed responsibility free freedom from Pakistani ports ( chiefly Karachi ) on their manner to Afghanistan. When Pakistan clamped down in 2003 on the types of goods permitted duty-free theodolite, and presenting rigorous steps and labels to forestall such patterns, re-routing of goods through Iran from the Persian Gulf increased significantly.

The pre-2003 smuggling trade provided undocumented occupations to 10s of 1000s of Afghans and Pakistanis, but besides helped fuel the black economic system, frequently intertwined with the drug trusts, of both states. Afghanistan and Pakistan late signed into jurisprudence a new Afghan-Pak Trade and Transit Agreement ( APTTA ) , which allows their transportation trucks to pass through goods within both states. This revised US-sponsored APTTA understanding besides allows Afghan trucks to transport exports to India via Pakistan through the Wagah crossing point. Harmonizing to Afghanistan ‘s Chamber of Commerce and Industries deputy caput, Khan Jan Alokozai, approximately 500 transporting containers of trade goods enter Afghanistan via Pakistan on a day-to-day footing.

Economic development and recovery

New commercial edifices such as this one in Kabul are constructed across the state to assist overhaul the fiscal sector

Afghanistan embarked on a modest economic development plan in the 1930s. The authorities founded Bankss ; introduced paper money ; established a university ; expanded primary, secondary, and proficient schools ; and sent pupils abroad for instruction. In 1956, the authorities of Afghanistan promulgated the first in a long series of ambitious development programs. By the late seventiess, these had achieved merely assorted consequences due to blemish in the planning procedure every bit good as unequal support and a deficit of the skilled directors and technicians needed for execution.

The state ‘s banking system has improved late with over 14 different Bankss in operation. They include Da Afghanistan Bank, Afghanistan International Bank, Kabul Bank, Azizi Bank, Pashtany Bank, Standard Chartered Bank, First Micro Finance Bank, and others. Money can be transferred electronically in and out of the state. A new jurisprudence on private investing provides three to seven-year revenue enhancement vacations to eligible companies and a four-year freedom from exports duties and responsibilities. As a consequence of the new Bankss in the state, Afghan exiles are directing more money back place to their household or relations. Harmonizing to a UN study in 2007, Afghanistan has received over $ 3.3 billion from its exile community in 2006. UN functionaries familiar with the issue said remittals to Afghanistan could hold been more if the banking ordinances are more convenient. In 2010, Kabul Bank became in fiscal crisis after depositors had withdrawn $ 180 million.

The UN continue to supply considerable human-centered alleviation. Since its origin in 1991, the UN Office for the Coordination of Humanitarian Affairs ( OCHA ) to Afghanistan has channelled more than $ 1 billion in many-sided aid to Afghan refugees and vulnerable individuals inside Afghanistan. The United States, the European Union ( EU ) , and Japan are the taking subscribers to this alleviation attempt. One of its cardinal undertakings is to extinguish from precedence areas-such as small towns, cultivable Fieldss, and roads-some of the 5 to 7 million land mines and 750,000 pieces of undischarged munition, seeded chiefly during the Soviet business, which continue to litter the Afghan landscape. Afghanistan is still a to a great extent mined state ; mine-related hurts figure about 60 per-month. Without successful mine clearance, refugee repatriation, political stableness, and economic Reconstruction will be badly constrained.

The program for Kabul ‘s nine billion dollar hereafter modern urban development undertaking, the Kabul – City of Light Development.

The Agency Coordinating Body for Afghan Relief reported in 2008 that the United States has non delivered $ 5 billion worth of assistance it pledged to assist reconstruct Afghanistan, and other givers have besides fallen short by about the same sum. Since 2001, the international community has pledged $ 25 billion in aid but has delivered merely $ 15 billion. The Reconstruction of Afghanistan requires a sustained and significant committedness of assistance. Too much money meant for Afghanistan assistance is wasted, with a huge sum spent on foreign workers ‘ high wages, security and life agreements.

An initial construct design called the City of Light Development, envisioned by Dr. Hisham N. Ashkouri, Principal of ARCADD, Inc. for the development and the execution of a in private based investing endeavor has been proposed for a multi-function commercial, historic and cultural development within the bounds of the Old City of Kabul along the southern side of the Kabul River and along Jade Meywand Avenue, [ 34 ] regenerating some of the most commercial and historic territories in the City of Kabul, which contains legion historic mosques and shrines every bit good as feasible commercial activities among and within war-damaged edifices. Besides incorporated in the design is a new composite for a new Afghan National Museum. The design has garnered involvement from President Hamid Karzai, and has support from Ambassador Said Tayeb Jawad, who signed a Memo of Understanding sing the development.


National histories

The bulk of the undermentioned information is taken from, or adapted from The World Factbook

GDP: buying power para – $ 29.81 billion ( 2010 est. ) , with an exchange rate at $ 16.63 billion ( 2010 est. ) GDP – existent growing rate:

22.5 % ( 2009 est. )

GDP – per capita: buying power para – $ 1,000 ( 2009 est. ) [ 1 ]

GDP – composing by sector:

agribusiness: 31 %

industry: 26 %

services: 43 % ( 2008 est. )

note: informations excludes opium production

Population below poorness line:

36 % ( 2008/2009 )

Household income or ingestion by per centum portion:

lowest 10 % : NA %

highest 10 % : NA %

Inflation rate ( consumer monetary values ) : 13 % ( 2007 )

state comparing to the universe: 183

Labor force: 15 million ( 2004 est. )

state comparing to the universe: 40

Labor force – by business: agribusiness 78.6 % , industry 5.7 % , services 15.7 % ( 2009 est. )

Unemployment rate: 35 % ( 2009 )

state comparing to the universe: 181


grosss: $ 890 million

outgos: $ 2.7 billion

Industries: small-scale production of fabrics, soap, furniture, places, fertiliser, dress, food-products, non-alcoholic drinks, mineral H2O, cement ; hand-loomed rugs ; natural gas, coal, Cu

Electricity – production: 839 million kWh ( 2007 )

state comparing to the universe: 149

Electricity – production by beginning:

fossil fuel: 36.3 %

hydro: 63.7 %

atomic: 0 %

other: 0 % ( 2001 )

Electricity – ingestion: 1.418 billion kWh ( 2007 )

state comparing to the universe: 137

Electricity – exports: 0 kWh ( 2007 )

Electricity – imports: 608 million kWh ( 2007 )

Oil – production: 0 barrels per twenty-four hours ( 0 m3/d ) ( 2003 est. )

state comparing to the universe: 210

Oil – ingestion: 5,036 barrels per twenty-four hours ( 800.7 m3/d ) ( 2006 )

state comparing to the universe: 165

Oil – proven militias: 1,600,000,000 barrels ( 250,000,000 M3 ) ( 2006 est. ) [ 13 ]

Natural gas – production: 220 million mA? ( 2001 est. )

Natural gas – ingestion: 220 million mA? ( 2001 est. )

Natural gas – proven militias: 15.7 trillion three-dimensional pess ( 2006 est. ) [ 13 ]

Agriculture – merchandises: opium poppies, wheat, fruits, nuts, broadtail furs

Exports: $ 327 million ; note – non including illicit exports or reexports ( 2007 )

state comparing to the universe: 175

Exports – trade goods: opium, fruits and nuts, hand-loomed rugs, wool, cotton, fells and furs, cherished and semi-precious rocks

Exports – spouses: United States 26.47 % , India 23.09 % , Pakistan 17.36 % , Tajikistan 12.51 % ( 2009 )

Imports: $ 4.85 billion ( 2007 )

Imports – trade goods: capital goods, nutrient, fabrics and crude oil merchandises

Imports – spouses: Pakistan 26.78 % , United States 24.81 % , India 5.15 % , Germany 5.06 % . Russia 4.04 % ( 2009 )

Debt – external: $ 2.7 billion ( 2008 )

Current history balance: – $ 67 million ( 2007 )

state comparing to the universe: 79

Currency: Afghani ( AFN )

Exchange rates: Afghanis per one US dollar ( $ 1 ) – 50.25 ( 2008 ) , 50 ( 2007 ) , 46 ( 2006 ) , 47.7 ( 2005 ) , 48 ( 2004 )

Fiscal twelvemonth: 21 March – 20 March