Competition Intensifies in Afghanistan

 

The economy in Afghanistan was robust in 2012, registering a GDP growth of 11.8 %, on the back of strong agricultural and mining sectors. International aid contributed to the strong numbers, while internally, inflation fell to 6.4 percent. However, the political transition has hit the private sector and the recovery pace was slower than expected after the 2010 Kabul Bank crisis.

The political transition in Afghanistan creates high economic uncertainty. Withdrawal of international troops means lower security for the country. Government expenditures are expected to reach 39 percent of GDP in the next ten years, and continued violence, economic crime and systemic corruption force Afghanistan to spend more on security operations, as well as for the maintenance of the armed and police forces, which are currently heavily financed by external donors.

Positive economic outcast is expected for the next decade, but economic expansion development is also pending on peaceful elections in 2014 and on a general increase in order within the country.

Read the rest of the feature article in CemWeek Magazine Issue 16.