Afghanistan Will Muddle Through–On An Upward Trajectory

When you read statements like “the next President’s team needs a top to bottom review of our engagement in Afghanistan” or “we need to take a ‘hard’ look at our engagement in Afghanistan” it should immediately raise a series of follow-up questions.

Is it acceptable for the United States and its allies to pull the plug and watch Afghanistan collapse, leaving a failed state for Al Qaeda, ISIS and the Taliban to use as a nation-sized equivalent of an aircraft carrier for terrorism?  Is it acceptable to walk away from 3 million Afghan girls attending school knowing that their opportunity to pursue education will dissipate?  Is it acceptable to have the democratic will of the Afghan people thwarted after they have braved bombs and bullets to vote in three successive elections?

As long as we have a capable and willing counterpart in the government under Afghan President Ashraf Ghani—and can demonstrate progress on a number of social, economic and political fronts— then we should continue to help with security and economic assistance in Afghanistan.   An important fact to note: today, most of the international troops are gone from Afghanistan.  President Obama and our allies have, thankfully, left a “residual force” to support the Afghan military, but the security burden has been slowly, if imperfectly, shifting to the Afghans.

Afghan Education
The decisions we make about engagement in Afghanistan will have lasting impacts on future generations.

Another very important fact to note: as the security burden shifts to the Afghan government, the levels of foreign assistance paid for by the United States and our partners are down from their highest levels.  This is true both in dollar terms and as a percentage of the Afghan economy.  Increasingly, Afghanistan’s economic future is being determined by the Afghan’s themselves.  The critical component to maintaining this progress is ensuring that the formal (and licit) economy continues to grow.

Afghanistan has had a series of positive developments that have not received the coverage they deserve:

  • First, the Afghans had a successful “donor” conference in Brussels earlier this month. The US, the European Union, Canada, Australia, Japan, and 65 or so other donors pledged $15 billion from now until 2020 but with strict conditions for the fledgling unity government to meet for that assistance to be continued each year.
  • Second, the Afghans completed their first IMF program. Why is this important?  It means that Afghanistan has a functioning government and that they are able to manage their money enough to participate in (and benefit from) globalization.  They are still highly fragile from an IMF standpoint but they are making progress in managing their own development.
  • Third, Afghanistan recently became the 164th member of the WTO—the club of countries who participate in the global trading system established in the wake of WWII. This was no small achievement and needs to be facilitated institutionally by the WTO, bilateral donor states and the regional trading nations who surround Afghanistan.
  • Fourth, the Afghan government signed a peace deal with local warlord Gulbuddin Hekmatyar, who is perhaps better known by his nickname as the “Butcher of Kabul.” While this deal is understandably controversial, officials see this as a critical component of taking “bad guys” off the battlefield and contributing to security. This type of diplomatic initiative, combined with further strengthening of the Afghan National Army, National Police and Special Forces is making Afghanistan stronger but Afghanistan is a hard geography to secure without sustained security improvements.

Afghanistan and its partners have come a very long way in the 15 years since 2001.  Afghanistan has over 3 million girls in school, has achieved very meaningful progress on key health metrics, and has rehabilitated between 8,000 and 10,000 kilometers of roads.  The Afghan government is collecting taxes from legitimate businesses in the formal economy— over 10 percent of GDP in 2015—and with those tax dollars, it is paying for a growing share of its own security, health and education costs. Despite this progress, Afghanistan needs significantly more trade and investment to drive economic growth and continue moving in the right direction.  There is money going into the country—some from Afghan’s themselves, but there is also growing interest from foreign investors, most notably in India.

What are the big risks?  First, that the Taliban has a “major breakthrough.”  Despite the headlines, the Afghan government, together with international security forces, maintains control over most of its territory.  Second, the other big risk is that the current “unity” government somehow collapses.  There is no doubt that the Obama Administration would try to salvage the unity government if the Loya Jirga or other Afghan national leaders sought to dissolve it because of its failure to hold provincial and other elections this year.  In fact, the unity government structure was designed and spearheaded by Secretary of State John Kerry to salvage a poorly mangled Presidential election.  Nevertheless, a collapse of the unity government seems improbable, as internal incentives will likely keep the weak coalition government together until the 2019 elections when both Chief Executive Abdullah Abdullah and President Ghani will run likely run again.

There is no lack of coverage when it comes to the challenges facing Afghanistan: the country’s levels of corruption are some of the worst in the world, the security situation remains fragile and unpredictable, and there are credible reports of official complicity and involvement in the drug trade. There are also a number of policies, some of which are common in developing countries, that hold back business activity, trade, and investment.  Specifically, the Afghan Government needs to stop taxing both corporate revenues and profits and allow incentives for more private investment in industries such as mining, renewable energy, power and transmission systems, infrastructure,  agriculture, and textiles  manufacturing. Also, it must move more rapidly in introducing import substitution and export promotion policies that will leverage their new WTO membership.  The current unity government has moved too slowly and only initiated recent policy changes after pressure from European and other donor governments in preparation for the Brussels Donor Conference in October 2016.

Afghanistan is a multiparty democracy which has made progress and is decreasing its dependence on international security support and foreign aid.  It will require at least another 10 years of what President Ghani calls sustained “self-reliance”, but steady support must be continued from the United States and its partners.  The alternative is a failed state that exports radical Islamic terrorism, refuses to treat its women and children with the respect and dignity all people deserve and continues to be a regional hotbed where nuclear powers India and Pakistan could use as a proxy playground—posing threats to both regional and global stability.

Article Published in Forbes.com on October 24, 2016.

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