Despite 122 billion aid in last 16 years, Afghanistan economy collapsing: SIGAR

KABUL – *The Afghan economy tanked after large numbers of coalition troopsand the jobs created to support them left the country, indicating a16-year, $122 billion reconstruction effort failed to develop a sustainableeconomic system, according to a U.S. watchdog agency.*

Businesses that boomed in Afghanistan during the height of theinternational mission were in construction and logistics for internationaltroops and aid organizations. Once most of the troops left in 2012, thecountry’s economy, which once enjoyed double-digit growth, stopped growing,according to the Special Inspector General for the Reconstruction ofAfghanistan report released Thursday.

“Any hope that the upward trend would be lasting was an illusion,” SIGARboss John Sopko said Thursday in prepared remarks for a speech at aWashington-based think tank.

The speech coincided with the release of the SIGAR report, which examinedU.S. government’s support to private-sector development in Afghanistansince 2001.

The report cited multiple mistakes made by policymakers. Financial aidoften encouraged corruption, experts lacked expertise in Afghanistan, andthere was not enough aid given at the beginning of the war and too muchmoney given at the height of it, the report said.

Per capita income rose quickly after the invasion, increasing from $117 perperson in 2001 to a peak of $669 in 2012. Growth dropped significantlybeginning in 2013, in parallel with the drawdown of coalition military andcivilian personnel. This “confirmed that much of the growth was drivenlargely by the international presence,” the report stated.

Afghanistan has relied on foreign aid in recent decades. When money fromthe Soviet Union dried up in the early 90s, the Afghan governmentcollapsed, leading to a bloody civil war and the rise of the Taliban.Without a strong economy, the Afghan government continues to depend oninternational money, Sopko said.

“Even if the Taliban signs a peace deal tomorrow, the Afghan governmentstill relies on international donors to cover roughly half of its budget,”Sopko said. “Our soldiers may come home, but our wallets will have to staybehind.”

Experts underestimated the severity of Afghanistan’s economic woes, thereport said, with one estimate in 2001 stating the country would need just$10 billion in developmental aid over a decade.