Things Looking Up in Afghanistan

Not that you'd know it from reading the domestic (U.S.) press. How does Newsweek reconcile its claim that Afghanistan is "sinking deeper into poverty":

For more than a year, Afghanistan has been sinking deeper into poverty, chaos and despair while the White House focuses on Iraq.

with the fact that, as the Economist reports [subscription required]:

The new national currency, the afghani, is widely accepted and stable. The economy grew by 28% last year, according to preliminary IMF estimates.

The Xinhua News Agency, in a August 18, 2003 article titled "Post-war economy grows over 30 percent in Afghanistan" for which I can no longer find a hard link but can still find in the Xinhua archives, provides some detail:

Afghanistan's economy saw a marvelous growth of 30 percent in the first year after the Taliban's ouster, mainly due to the return of refugees and an end of lingering drought, a spokesman said on Monday.

"According to reports by the Finance Ministry and the central bank, the economic growth in last fiscal year was over 30 percent," presidential spokesman Jawed Ludin told reporters at a routine press conference here.

The British weekly Economist has also reported a similar growth of the Afghan economy based on its independent estimates, he said.

Afghan officials and economists earlier estimated that the post-war country would achieve an economic growth of about 10 percent in the 2002 fiscal year ending on March 20.

The spokesman cited the repatriation of nearly 2 million Afghan refugees, end of a four-year-drought across the country and start of the reconstruction process as main reasons for the economic achievement of the country.

I guess Newsweek can be excused for not being aware of the tremendous economic growth Afghanistan has experienced, as I haven't seen it reported anywhere in the U.S. press. But I hardly expect to see the magazine correct the misimpression it has created.

Comments

[Shaun Evans]

Bravo! Good catch.

[Kevin Brancato]

RAND recently released a report America's Role in Nation-Building: From Germany to Iraq .

Chapter 8 discusses Afghanistan:

Opium production and export have resumed in Afghanistan despite
central government attempts to prohibit such activity. Drug smuggling
is thus responsible, in some measure, for such economic
growth as has occurred in a number of regions....

Although there have been numerous achievements during the past
year, aid for Afghan reconstruction has not been nearly as generous
as for other recent operations. For example, per capita external assistance
for the first two years of conflict was $1,390 in Bosnia and $814
in Kosovo but is only $52 in Afghanistan....

International assistance has spurred some growth, particularly in
more-secure urban areas, such as Kabul. However, until entrepreneurs
can travel freely and transport goods across the country
without intimidation or theft, the economic growth of Kabul and
other urban centers is unlikely to spread.

[Dimmy Karras]

From the same Economist article you cite:

"The economy has grown, yes, but any growth looks good when starting from zero; it is still less than half the size it was in 1978. Returning refugees are struggling to make a go of it; many are drifting to slums in Kabul. To say that there is no humanitarian crisis is to miss the point. There is crisis by attrition. Most Afghans still have no access to health care. Rates of maternal and infant mortality remain among the highest in the world. Cholera and other diseases are in the ascendant. As to donors, best not to ask. Well under $1 billion of the $4.5 billion promised at the Tokyo conference last year has shown up (though, to be fair, that sum was to be spread over the next few years). Too much of what does arrive ends up going on fat salaries and snazzy cars for foreigners."

In order to take back 2 million returning refugees and maintain the same standard of living, the economy must grow at an extraordinarily fast rate, and assuming those people are doing something productive, one would expect a high growth rate of output. This does not necessarily mean progress is being made against poverty.

Maybe Newsweek's description is inaccurate that Afghanistan is sinking deeper into poverty, but "Things Looking Up In Afghanistan" (the title of your post) isn't accurate either. I think the truth is somewhere in between.

[Todd Bass]

Dimmy Karras writes:

"In order to take back 2 million returning refugees and maintain the same standard of living, the economy must grow at an extraordinarily fast rate, and assuming those people are doing something productive, one would expect a high growth rate of output. This does not necessarily mean progress is being made against poverty."

The CIA factbook estimates Aghanistan's current (July 2003) population at almost 29 milllion.

http://www.cia.gov/cia/publications/factbook/geos/af.html

Can't be sure of how many of the 2 million Afghan repatriates cited in the Xinhua article returned within the past year as opposed to earlier, or what percentage of them were there for the full year, but even assuming all two million arrived on the first day of the year that's only population growth of 7.5%. Since the GDP grew at around 30%, per capita GDP must have increased.

"Maybe Newsweek's description is inaccurate that Afghanistan is sinking deeper into poverty, but "Things Looking Up In Afghanistan" (the title of your post) isn't accurate either. I think the truth is somewhere in between."

Obviously the main point of my blog entry was to rebut the assertion of the Newsweek reporters that Afghanistan is sinking further into poverty. The title I chose might have better reflected the content and I would agree with you that the overall outlook for Afghanistan is still mixed. That being said, I think that the economic growth, even considering the undoubted contribution from the increase in the drug trade, is good news and reason for guarded optimism. The very fact that Afghan expatriates continue to return in such large numbers suggests they think that the outlook for their homeland has improved. They're voting with their feet, as it were.

Thanks for your comment.

[Sean]

The link is dead, but I have an entry in my weblog dated 1-12-03 that says that, according to Newsweek's "Conventional Wisdom," the dividend tax cut were DOA. The exact title is:

"Even GOPs admit dividend break is DOA."

Here was my reaction:

"Nothing that I have read indicates that the dividend tax cuts are DOA. That doesn't mean it's not so, but I read a lot and if it were "conventional wisdom" I think I would know. I think Newsweek's leftwing bias is showing. Perhaps they will be vindicated in the next few weeks. We'll see."

Why am I not surprised at this attempt to deceive people?