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Edward Corcoran

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Energizing Afghanistan -- Economic First Step

Posted: 10/06/11 11:48 AM ET

Afghanistan is on the verge of blossoming into a modern nation and sweeping the Taliban aside, though almost no one believes this. The central question is, will Afghanistan tip toward development or anarchy? Positive models are Germany and Japan, both crushed by the war but supported by the United States in rebuilding into modern democratic nations. South Korea is an even more pertinent example -- it was not rebuilt, but built. Also a war-torn, miserably poor, agrarian country, with U.S. help it has become an economic powerhouse and a vibrant democracy. In all these cases, the United States helped nations build themselves, with no effort to establish a lasting hegemony; all three are now unquestioned as independent nations.

For this to happen with Afghanistan, three interrelated efforts have to move forward: economic development, Afghan awakening, and discrediting the Taliban.

Economic Development:

Neither of the other efforts can move forward without a solid base of economic development. The major effort in the country has been badly misplaced. It has emphasized a heavy military effort -- very costly in terms of both blood and resources -- in the most difficult areas of the country, while intentionally minimizing resources for development in the quieter areas. Compounding the problem is the fact that available civilian support has been concentrated in areas of poor security, where it is almost impossible to function effectively. This effort has also overemphasized the role of the central government at the expense of traditional regional power centers, exacerbating a sense of individual powerlessness, especially with the experience of corrupt elections. There is a critical need to shift resources from military to development efforts, empowering effective district and provincial leaders, demonstrating the potential for real growth at the grass roots level, and providing a sense of individual contribution to local government.

  • A comprehensive connectivity effort is being developed to provide an internet access web tying together the full range of development efforts nationwide. Community connectivity centers would facilitate transparency (and so minimize corruption) and provide resources for education, health, business development, agriculture, and commerce.
  • Jobs are the most central need and agriculture is the most inclusive sector, the place where employment efforts must be centered. Development must build on successful efforts, like the training and advising programs of the Global Partnership for Afghanistan which works with rural Afghans to create farm businesses. The connectivity effort could provide the backbone for critical agriculture extension services and help integrate Afghan Development Corps (ADC) programs to provide both initial jobs and training for expansion of agriculture and associated light industry (e.g., flour milling, edible oil processing, textiles). This would initially focus in the quieter areas of the country and emphasize revitalizing formerly productive agricultural areas.
  • Mining and minerals can provide another large economic boost, and mineral resources in the ground could be used as collateral to fund initial development work and as resources to attract direct investment. The initial large mining contract, at Aynak, included provisions for local purchasing and development, but little has happened on this. So it is important that future contracts be much more specific on requirements for up front development and job creation. ADC approaches, funded using minerals as collateral, could be very helpful, building infrastructure and training Afghans for the jobs that the development would bring.
  • A regional transport network reinvigorating the historical Silk Road trade routes connecting China with Western Europe is an ambitious $7 billion project. Developing the Afghan segment of this network could provide a significant boost to the Afghan economy, as well as integrating it better with regional efforts, such as expanding the Pakistani port at Gwadar. It would also be another ideal project area for the ADC as it would be developing the infrastructure which would subsequently support many jobs.
  • Urban development is also coming to Afghanistan. An ambitious New Kabul City project will be home to an estimated 1.5 million people. The 4.5 million people now living in the city, initially built for 700,000, are projected to increase to about 7 million in 15 years. The new project will create 500,000 jobs: 100,000 in agriculture, 100,000 in industry and 300,000 in service and other sectors. The first phase will provide 80,000 housing units for 400,000 people with construction starting as early as next year.
  • Investment is a key to Afghan development and there are already several programs working at the grass roots level, in particular the highly regarded National Solidarity Program (now operating in some 28,000 villages and managed by local councils), an Afghanistan Vouchers for Increased Productive Agriculture (AVIPA) program focusing on rural family farm production; and a successful Valued Sustainable Services effort demonstrating local village development in Nangarhar Province. This has to be supplemented by increased Foreign Direct Investment (FDI). The US Department of Commerce is sponsoring several programs encouraging US companies to make small initial investments to get in on the ground floor of future broad development. These efforts need to be significantly expanded, as with joint venture public-private partnerships. Both the US Overseas Private Investment Corporation and the World Bank's Multilateral Investment Guarantee Agency provide risk insurance. A number of organization provide financing to supplement investment, including the Asian Development Bank, USAID's Development Credit Authority and the Afghanistan Investment Support Agency. i>Education and health are critical enablers of development. Widespread efforts in both these areas include government programs, development assistance and dozens of efforts by individual non-governmental organizations (NGOs). All of these efforts would be significantly aided by the connectivity effort, as well as training aspects of the ADC.

Summary

It is not military action but development which will sweep the Taliban aside. As the U.S. military draws down, it is imperative to shift some portion of the resources saved into development support, concentrated at the grass roots level. Two current proposals can be instrumental in bringing development into reality, visibly moving Afghanistan toward modernization: a comprehensive connectivity effort and a widespread Afghan Development Corps (ADC). It is imperative to have results which can bolster political development at all levels while systematically denouncing the Taliban disregard of traditional Islamic norms.