Last week, Peter Bergen wrote an optimistic post titled "The
Afghan Phoenix" over on the AfPak Channel, giving some counterfactuals to
the doom and gloom over the plight of Afghanistan and the U.S. mission there. Five
million refugees have returned to Afghanistan. One in six Afghans owns a cell
phone. And, he notes, "You were more likely to be murdered in the United States
in 1991 than an Afghan civilian is to be killed in the war today." This
statistic struck me most, though: "In 2008, Afghanistan's real GDP
growth was 7.5 percent. Under the Taliban the economy was in free fall."
I won't argue that Afghanistan's economy was anything other
than terrible, and worsening, under the Taliban. It was and remains an
impoverished country with a host of profound basic infrastructure and business development
challenges -- from the lack of roads to the surfeit of bombs to the high
illiteracy rate. It has a massive black-market economy. 80 percent of
working-age men are involved in subsistence farming. A woefully high proportion
of its population relies on the drug trade.
But I still don't find the 2008 GDP growth figure too much of
a reason for optimism. Why? Afghanistan's GDP isn't growing because of booming
Afghan production and consumption, or rising wages. Afghanistan's GDP is growing
because of all the Americans and other foreigners -- around 65,000 troops and
200,000 nongovernmental workers -- building and buying things there (with
dollars, no less), and because of the $57
billion pledged by international donors since 2002.
For an illustration of the phenomenon, see this chart of
Afghan GDP in inflation-adjusted dollars, which I made with UN data. The
Taliban took over in 1996, and Afghanistan's economy dwindled. The U.S. invaded
in 2001, and it boomed. Afghanistan's GDP depends entirely on the armed force
in charge. This isn't to say the local commerce supplying the 265,000 relatively
flush foreigners in Afghanistan isn't real. But were the United States to drawdown,
aid workers and military contractors and commerce would follow. My guess is that much of the GDP growth comes from service-sector jobs, not from new production.
That's the real issue. Foreign spending in Afghanistan is a good thing for GDP.
It's less clear whether it has fostered economically meaningful development.
Dollars are all well and good -- but won't do much unless they help create
businesses, employment, infrastructure development, and longer-term growth. (This is why
Jonathan Zasloff's plan
to hand out cash to Afghans wouldn't do much more than stoke inflation.)
Whether they can remains the question.
Plus, many worry the U.S. troop presence cannot foster the foreign
direct investment, local economic growth, agricultural development, and security
and economic paradigm the country so desperately needs. But the U.S. military is
hoping so. The civil-military
plan by U.S. Ambassador Karl Eikenberry and Gen. Stanley McChrystal Laura Rozen
posted today mentions the Afghan economy, licit agriculture, cross-border
commerce, and reconstruction dozens of times.