At $137 billion and counting, Afghanistan has gained the distinction of being the most expensive reconstruction project in U.S. history. This amount is more than the entire Marshall Plan to rebuild western Europe after World War II. Industrial giants like Germany, France and Netherlands emerged out of the massive US investment under the plan. But what did the US get out of Afghanistan on its unprecedented investments in men and money, which it invaded in post-9/11 global push against Al Qaeda. May be not much. It was a risky investment.
The only prize, if the policymakers may call it, is the defeat of al Qaeda. The Taliban, who were ousted from power following the US invasion, are beck in Kabul even more powerful and legitimized under a peace deal with Washington. Today’s polarized Afghanistan has multiple power centers while the Islamic State has found dangerous foothold in the country. The tens of billions of dollars spent in the name of reconstruction have had little impact on this landlocked country, which remains weak, impoverished, and straddled between pockets of relative modernity and 19th century tribalism. Fifty-five percent of Afghans live below the poverty line, compared to 38% in 2012.
In a speech to the Case Western Reserve University School of Law in Cleveland, Ohio, on June 23, Sopko said the viability of the Afghan state does not depend upon bullets and bombs alone. “To put it simply, without the financial support of the international donor community, the Afghan government cannot survive.”
International donors provide approximately 75 percent of Afghanistan’s total public expenditures, and the World Bank has estimated that between $4.6 billion and $8.2 billion of donor funding will be required per year through at least 2024 – and that is in a post-peace-settlement environment.
Afghanistan’s economic growth rate averaged close to double digits for the first decade of reconstruction. Reason is pretty known: the development funds pouring into the country and a large international military presence that amounted to a sizable but impermanent fiscal stimulus. However, since the 2014 security transition and drawdown of foreign troops, its war-driven growth has been stuck in the low single digits.
The World Bank recently reported that Afghanistan’s GDP growth in 2019 was 2.9%, the second lowest in South Asia, which, excluding Afghanistan grew by 5.2%. And the COVID-19 pandemic now is dashing hopes for higher growth over the next several years. A panel of experts convened by the Wilson Center last month predicted that the Afghan economy would contract sharply in 2020, perhaps by as much as 10%.
Such gloomy economic forecast means that Afghanistan’s dependence on foreign aid will even increase in the coming months and years. “As my agency has repeatedly reported, despite receiving nearly $35 billion in U.S. assistance for governance and economic development, Afghanistan’s economy is floundering,” Sopko says. He says corruption is undermining the strength and legitimacy of Afghan government and that economic turnaround without tackling the scourge may remain a distant possibility.
Transparency International’s most recent Corruption Perceptions Index ranks Afghanistan as tied for 173rd out of 180 countries, ranking it less corrupt than only Yemen, Syria, South Sudan, and Somalia.
“Let me be perfectly clear here, corruption in Afghanistan is not just a criminal justice issue. Systemic corruption in Afghanistan goes beyond that. As we noted in our 2016 Lessons Learned report, corruption is a strategic threat to our entire mission in Afghanistan,” Sopko said.
He accused the government of President Ashraf Ghani of offering just a lip service to the UN and the rest of the donor community about its anti-corruption commitments. The donors might buy Ghani’s assurances but not the private sector which cares far more about its own bottom line than about Afghanistan’s future.
“Afghanistan’s leaders must come to realize that in the end, private sector investment will matter far more to their country’s future than international donors, because after 18 years of war, foreign governments, including the United States, are growing weary of paying Afghanistan’s bills,” he added.
He said if the rampant corruption was not dealt with, the private sector growth will not materialize, and the donor community will eventually tire of coming to Afghanistan’s rescue. “When that occurs, the country’s economy and government could well collapse and a return to civil war, the rise of new or reenergized fundamentalist movements, or the full transformation of Afghanistan into a narco-state could result.”