1. Afghanistan: Unsustainable Development?
David Parish

2. A Typical day in the Office

3. Going out of the Office

4. Encouraging Notices

5. Charming decor

6. Unusual Facilities

7. What kills working independent consulting economists?
Sickness, especially malaria

8. What kills working independent consulting economists?
Sickness, especially malaria
Accidents, especially traffic

9. What kills working independent consulting economists?
Sickness, especially malaria
Accidents, especially traffic
Crime

10. Overall Conclusion
Safest place I ever worked

11. Immediately After 2001 Total Absence of Data
World Bank/ADB/UN try to create overview
Conferences begin in Tokyo (January 2002)
Immediate demands for actions
Lots of top down project appraisal
Huge pressure to spend

12. Some Positive results Annual GDP growth averages over 10%
High but controlled inflation
Government revenue up from 3% to 10% of GDP
Some debt relief
Reserves for 7 months imports
Significant natural resources
Private sector growth in telecomms, airlines and media
Donors only doing three things each

13. Kabul Process Agreed at London and Kabul conferences in 2010
Transition: government stabilises security and takes over security spending
Transformation: expected gradual decline in donor support over medium term

14. Major Uncertainties The security outcome
The economic impact of a significantly reduced foreign presence
The level of development assistance from donors
Relations with neighboring countries
Government commitment to and capacity for reform
Enabling environment for the private sector
External sector adjustment

15. Security Outcome
All projections assume security is satisfactory: it may not be
Even with satisfactory security path to sustainability is difficult and uncertainties are huge

16. Foreign troop Withdrawals
IMF estimate the withdrawals will reduce annual GDP growth by 2-3%
Nobody feels at all confident about estimates

17. Level of Development Assistance
Some development spending by military
US has been far and away largest donor (over 50% of total)
Projections assume donor grants fall from over 40% of GDP in 2010/11 to under 30% in 2013/14

18. Relations with Neighbours
Problems over relations with Pakistan
Relations with Iran are up and down
Central Asia and China are fine but a long way to ports.

19. Government Capacity Two and a half civil services
PMUs
Old civil service
New units
Projects completed with development assistance will cost US$1-2 billion a year to maintain, but there is no budget. Some may have to be abandoned

20. Private Sector Worst enabling environment in South Asia
Tax revenue is supposed to grow from 11% to 16% of GDP over five years (introduction of Vat and revenue from mining companies). But mines need infrastructure

21. Example 1: Railway 75km Line built from Uzbekistan
No strategy or appraisal
No capacity to run railway
Uzbeks are running line on a management contract and ADB is subsidising the cost
Lots more lines “planned” and one under development into Iran

22. Example 2: Power Transmission lines built into central Asia
Distribution systems improved especially in Kabul
Power utility created but capacity is very limited
Ability of sector to self finance is uncertain

23. Example 3: Roads Lots of roads built, both military and civil
Negligible maintenance capacity
Tolls were proposed to finance system but have been dropped

24. Conclusion
Even if the security situation is resolved successfully, it will be very challenging for the government to balance needs and resources
Donor funding will be needed to keep what is there operational
Great caution over any future investment