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War-Torn Growth

Afghanistan

Daniel Lee

Bryan Hliboki

David Barenboim

Economic Obstacles

An Economic Introduction

  • What has happened in Afghanistan?

  • Where are they at now?

  • Why is this the case?

  • What is being done to fix this?

  • What do we think needs to be done?

History

Brief History

  • 1997: Taliban's rise & Northern Alliance
  • Early 2000's: Al-Qaeda's presence leads to NATO intervention
  • 2001: End of Taliban reign & Erection of interim govt.
  • 2004: Constitution
  • Late 2000's Onward: Continued fighting between Taliban, Al-Qaeda, & Afghan Military
  • 2013: Afghan army takes over all ops from NATO

Preventing Development

Road to Development

Osama bin Laden Executed

May 2, 2002

Education Improves

New Constitution

Taliban Rule Ends

2008

Over 9 million children enrolled in school, 480,000 teachers and staff trained, increased community-based education; 53% of students are girls

January 2004

Follows the input of 500,000 Afghans, calls for equality of women, requires president and two vice presidents

Leading to Development

December 2001

The government that prevented development is not in power, Hamid Karzai is sworn in as leader

World Bank Helps

Pledge to end Corruption

2002

In the wake of war and an unstable government, World Bank begins to aid Afghanistan towards development

2008

The international community pledges over $15 billion in aid to Afghanistan at a donors’ conference in Paris, while Afghan President Hamid Karzai promises to fight corruption in the government.

Economic Data

Takeaways

  • Comparable school enrollment with astoundingly low literacy rates show that the quality of education is lackluster

  • Sizable population with low GDP shows that human capital is not being used efficiently

  • With over 1/2 the population in poverty, there is a systematic poverty cycle

Obstacles

Poverty Trap

  • 90% of workers are in poverty or near the poverty line

  • Weak property rights

  • Ineffective and unstable judicial system

  • Many security concerns and the financial system has weak capacity

  • 75.6% of poor people are illiterate, and only 2.8% of poor people utilize sanitation

  • Women's rights and freedoms are culturally ignored

  • Afghanistan War caused great destruction

  • Food insecurity & lack of access to water

Institutional and Political Traps

Institutions and Politics

  • Decrease in foreign combat forces

  • Decrease in economic aid from major donors

  • Maximum of 2 terms for presidency

  • Enforcement of laws and policies is rarely uniform

  • Taliban must still be negotiated with

Social and Cultural Trap

  • Women are generally viewed as inferior and inherently different than men
  • must be accompanied by a man in public
  • women rarely get justice in cases of rape and violence against them
  • lower employment, less education
  • Made rape illegal in 2009, but enforcement is weak

  • In war torn areas, there is little hope and motivation, which may lead to lower productivity

  • Many people in rural areas still want inferior legislation due to lack of education and understanding, almost all are in poverty

International Obstacles

  • Foreign donors have put over $100 billion into Afghanistan

  • Foreign aid rarely reaches rural Afghans

  • International forces are dominant in supporting the economy and government

  • Donors are very skeptical with aid; war and corruption are rampant

  • Lack of transparency makes diplomacy and aid difficult

Factors of Development Provided by Agencies

Economic Development

Education & Health

Education and Healthcare

  • Doctors Without Borders provides medical care in conflict zones

  • Reducing the 5% infant mortality rate

  • Red Cross set up medical clinics

  • Distributes food supplies

  • UNICEF supports teachers' training

  • Initiative to increase girls' enrollment

Women's Empowerment

Women's Empowerment

  • Women's Empowered-Afghanistan

  • Women In the Economy (WIE)

  • Informs them of equal property rights

  • Provides support services for abused women

  • Teaches women basic economic skills

  • Attempts to increase girls' enrollment

Infrastructure

Infrastructure

  • Afghan Ministry of Public Works

  • US Agency for International Development

  • Provide electricity to 16% who don't have

  • Build roads so children can get to school

  • Rebuild infrastructure destroyed by conflict

Appropriate Technologies

Appropriate Technologies

  • USAID builds irrigation technologies

  • Other watering technologies inappropriate

  • Afghan Ministry of the Interior

  • Electronic paying system reduces 10%

Access to Credit

Access to Credit

  • World Bank helps ultra-poor attain credit

  • First Microfinance Bank Afghanistan

  • Only reaches 1% of population

  • Help women gain credit

  • Fund small businesses in urban informal sector

Income Distribution

Income Distribution

  • GINI coefficient of 27.8%

  • World Food Program

  • Provides food to the impoverished

  • Buys products of small farmers

  • 54.5% Poverty rate

Policy Prescription

Policy Prescription

THE W.E. PROJECT

Foreign Investment

What's in it for foreign investors?

Payback Rate

Interest Rates

Socially Responsible Investing

99%

approximately

(data from World Bank)

14-18%

>99%

- adhere to ethical values of your company

- generate greater funds from socially conscious investors

- improve the lives of people in poverty

(depending on borrower) according to FMFB-A.

for repeat borrowers and women

United Nations

Why should the UN donate to MFIs?

The UN gave Afghanistan

$1.3 billion

to train its police.

- Some of this money should be reallocated to supporting MFIs

- Microfinance loans give people the tools to build careers

- Some loans will be paid back, allowing for more loans to be given

44%

of workers on the payroll don't even exist.

Conclusion

Conclusion

Works Cited

Works Cited

“Afghanistan.” International Committee of the Red Cross, 8 Mar. 2019, www.icrc.org/en/where-we-work/asia-pacific/afghanistan.

“Afghanistan.” U.S. Agency for International Development, 17 Dec. 2018, www.usaid.gov/afghanistan.

“Afghanistan.” World Bank, www.worldbank.org/en/country/afghanistan.

“UNICEF in Afghanistan Homepage UNICEF.” Home Page, www.unicef.org/afghanistan/.

https://www.nytimes.com/2012/07/21/opinion/afghanistans-economic-challenges.html

https://www.brookings.edu/research/the-afghanistan-challenge-a-government-that-serves-the-afghan-people/

http://time.com/5472411/afghanistan-women-justice-war/

https://www.womenforwomen.org/blogs/eradicate-poverty-afghanistan-womens-empowerment-essential

https://www.worldbank.org/en/country/afghanistan/publication/afghanistan-to-2030-priorities-for-economic-development-under-fragility

http://www.worldbank.org/en/topic/poverty/publication/poverty-reduction-in-afghanistan-despite-economic-growth-widening-inequality

https://www.worldatlas.com/articles/the-highest-literacy-rates-in-the-world.html

https://www.pbs.org/newshour/politics/asia-jan-june11-timeline-afghanistan

https://watson.brown.edu/costsofwar/costs/human/civilians/afghan)

https://www.usaid.gov/afghanistan/education

https://www.theguardian.com/world/afghanistantimeline

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