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Afghan War News > General Info > Development > Afghanistan's Economy

Afghanistan's Economy

Afghanistan's economy has grown tremendously over the past years since the Taliban have been overthrown. Immense amounts of international aid has been introduced to Afghanistan. This aid decreased in 2014 and will continue to decrease beyond 2014 leaving questions about how much the Afghan economy will contract.

The signing of the the Bilateral Security Agreement (BSA) with the United States has stabilized the economy as well as the election of a new president in the 2014 elections. The receipt of international aid was contingent on a future U.S. presence in Afghanistan beyond 2014; but with the BSA that is now assured. Without the international aid the economic future of Afghanistan looks very uncertain. 1.

Power Needs of Afghanistan. Afghanistan does not have a robust power grid system. In fact, the city of Kandahar - Afghanistan's second largest city - is dependent upon large generators provided by the United States. 2. These generators are subsidized with diesel fuel provided by the U.S. government under an arrangement that will cease in 2015. The long-term power needs of Kandahar are supposed to be met with the electricity generated by the Kajaki Dam.

Foreign Aid. See news reports about foreign aid and Afghanistan.

Videos about Afghanistan's Economy

April 8, 2015. "Afghanistan hit by faltering economy". CNN News. The economy is damaging the publics confidence in the government and the future. The biggest threat to the Afghan government is not the Taliban; it is corruption and lack of revenue.

Papers & Reports about Afghanistan's Economy


IMF, Islamic Republic of Afghanistan: Ex Post Assessment of Longer-Term Program Engagement, International Monetary Fund, February 11, 2016.

Byrd, William A., What Can Be Done to Revive Afghanistan's Economy?, United States Institute of Peace (USIS), February 9, 2016. This report proposes some targeted, near-term measures to increase confidence and stimulate the economy.

UN, State of Afghan Cities: Volume One, UN Habitat, Feb 2016


Muzhary, Fazal. Finding Business Opportunity in Conflict: Shopkeepers, Taleban and the political economy of Andar District, Afghanistan Analysts Network (AAN), December 2, 2015.

Minoia, Giulia and Adam Pain. 90% real - The rise and fall of a rentier economy: Stories from Kandahar, Afghanistan", Afghanistan Research and Evaluation Unit (AREU), November 2015. Working Paper 38.

Byrd, William A., Economic Management in Afghanistan: What worked, what didn't, and why?, Afghanistan Analysts Network (AAN), August 26, 2015. Bryd is senior expert at the US Institute of Peace where he has been working on Afghanistan since April 2012. From 2002 to 2006 he was stationed in Kabul, Afghanistan where he served as the World Bank's country manager for Afghanistan and then as economic advisor.

News Articles about Afghanistan's Economy

March 28, 2016. "Beyond Bullets: The Current Situation in Afghanistan", Linkedin Pulse. Sarah Martin outlines what the US can do to ensure Afghanistan's enduring freedom and improve economic opportunity, despite the threat of ISIS expansion to the country and a growing Taliban presence.

February 8, 2016. "A Way Forward for Afghanistan's Economy", CIPE Development Blog. Article describes CIPE's Provincial Business Agendas (PBA).

December 9, 2015. "Afghanistan Hopes W.T.O. Membership Can Reboot Its Battered Economy", by David Jolly, The New York Times.

May 21, 2015. "Dollars Disappear in Afghanistan with Exiting U.S. Troops". Bloomberg News. The economic forecast is dismal.

April 8, 2015. "Afghanistan hit by faltering economy". CNN News.

October 21, 2014. "With New President, Economic Optimism Returns to Afghanistan". National Public Radio.

August 27, 2014. Afghanistan's Looming Fiscal Crisis: What Can Be Done?. By William A. Byrd, United States Institute of Peace (USIP).

August 4, 2014. "Afghans Feel Bite of Military Pullout". Radio Free Europe. Article addresses the lack of economic future in area of Bagram Air Field (BAF).

March 25, 2014. "Afghan economy at a crossroads". (Germany).

March 14, 2014. "The Missing Piece in Ensuring Afghanistan's Peace". By James Stavridis (retired 4-star admiral) in Foreign Policy. The author believes that the chances of bringing home a limited but sustainable level of stability to Afghanistan ultimately rest on how the economy unfolds. And that will take international, interagency, and private-public collaboration to succeed.

March 14, 2014. "Mining: the new face of Canada's Afghan experience". The Telegram.

December 18, 2013. "Uncertainty Over Security Pact Drives Final Nail into Afghan Bubble". Voice of America.

December 17, 2013. "Afghanistan's Economy Hostage to Aftermath of U.S. Combat". Bloomberg Politics.

October 1, 2013. "Afghanistan economic update". World Bank. "Uncertainty surrounding the political and security transition in Afghanistan has led to a slowdown in the economy in 2013, following strong growth in 2012. After a decade of strong fiscal performance, revenue collection has weakened in 2013 . . . " Read the report here.





1. For more on the Bilateral Security Agreement delay and the Afghan economy read Compounding Uncertainty in Afghanistan: Economic Consequences of Delay in Signing the Bilateral Security Agreement, by the United States Institute of Peace, February 4, 2014.

2. For more info on the projected power needs of Kandahar see "2nd largest Afghan city could go dark when U.S. subsidies end", McClatchy DC, August 5, 2014 at this link.





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