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Begin New Search Topic Economics Political Geography Afghanistan Content Type Policy Brief Publishing Institution United States Institute of Peace Publication Year within 25 Years Publication Year within 10 Years

1. Afghanistan's Continuing Fiscal Crisis: No End In Sight

Author:
William A. Byrd
Publication Date:
05-2015
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
For several years, Afghanistan’s economy and public finances have worsened, culminating in a full-blown fiscal crisis in 2014. Political uncertainties, the weakening Afghan economy, corruption in tax collection, stagnant government revenues, and increasing expenditures have contributed to the current fiscal impasse. In the absence of bold actions by the Afghan government along with proactive international support to turn around the fiscal situation, the fiscal crisis and its insidious effects will continue.
Topic:
Conflict Resolution, Corruption, Economics, and Financial Crisis
Political Geography:
Afghanistan and Central Asia

2. The Future of Afghanistan-Pakistan Trade Relations

Author:
Ishrat Husain and Muhammad Ather Elahi
Publication Date:
08-2015
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
Pakistan and Afghanistan are among each other’s largest trading partners. Though an agreement was signed in 2010 to strengthen trade relations and facilitate Afghan transit trade through Pakistan, implementation has been mixed, with many on both sides of the border complaining of continued barriers to exchange. Both nations need to improve trade facilitation through streamlined payments settlement and improved insurance mechanisms, the use of bonded carriers, visa issuance, trade financing, tax collection, and documentation.
Topic:
Economics, Foreign Exchange, International Trade and Finance, and Bilateral Relations
Political Geography:
Pakistan and Afghanistan

3. Reviving Afghanistan's Economy

Author:
William A. Byrd
Publication Date:
10-2015
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
Some say reviving the Afghan economy in a time of intensifying violent conflict and declining external financial inflows will be impossible. Expectations need to be kept modest, and measures must go beyond conventional economic approaches in order to be effective. This brief puts forward some outside-the-box ideas, which, combined with greater government effectiveness and, hopefully, reductions in violent conflict, may help turn the economy around.
Topic:
Conflict Resolution, Political Violence, Development, and Economics
Political Geography:
Afghanistan and Central Asia

4. Afghanistan's Looming Fiscal Crisis: What Can Be Done?

Author:
William A. Byrd
Publication Date:
08-2014
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
Afghanistan faces a fiscal crisis that reflects worsening domestic revenue shortfalls since 2011, which could reach $1 billion in 2014 compared with the 2011 outlook. The massive theft and fraud at Kabul Bank, failure of mining activities to pay taxes and royalties, and mislabeling of some commercial imports as duty-free are among other contributing factors. Turning the fiscal crisis around will take time, but a legitimate, credible new Afghan government coming into office is essential. Quality leadership and management teams in the Ministry of Finance and the Central Bank will be crucial for success. Urgent measures are needed to turn around poor revenue performance, including strong signals from the top, possible exploitation of limited new revenue sources, and cooperation among different agencies to reduce smuggling and contain revenue leakages. Accelerated recovery of stolen and lost Kabul Bank assets should be a priority, which could provide over $100 million per year of extra fiscal space for the budget. Reforms of the revenue system need to be initiated, including introduction of a value-added tax, and possibly reform of the revenue and customs services. Expenditures will need to be cut. This requires the elimination of unnecessary and wasteful expenditures as well as the meaningful prioritization of programs within a tight resource envelope. Additional international fiscal support will be needed to help stabilize the budget in the short run. Linking aid for the Afghan discretionary budget to increases in domestic revenues and Kabul Bank recoveries would make sense.
Topic:
Debt, Economics, Foreign Aid, and Financial Crisis
Political Geography:
Afghanistan

5. Exploitation of Mineral Resources in Afghanistan Without Government Revenues or Development Benefits

Author:
William A. Byrd and Javed Noorani
Publication Date:
12-2014
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
Case studies of five ongoing mining operations show that Afghan mining companies are wantonly exploiting easily extractable mineral resources with little or no taxes and royalties going to the government. Revenue losses from just two sources —royalties and land rent —at the five mines are more than US$50 million per year. Total revenue losses from all sources for the hundreds of mines contracted to different companies easily could be hundreds of millions of dollars annually. The tendering processes, awards, and contents of contracts issued, contract implementation, and actual operations at the mines all showed clear signs of political interference, favoring bidders that often had no prior mining experience. Companies usually began extracting resources soon after mining contracts were awarded, without paying any taxes and royalties —even though the contract called for an initial exploration period. Companies did not provide the legally and contractually required documents, such as exploration reports and environmental and social impact assessments. Effective inspections of mines were not conducted, and companies were not held accountable for payments due. Sometimes mining activities precipitated local conflicts, resulting in violence and deaths; weaker local communities called on Taliban elements for support in one such dispute. Serious reforms are needed to ensure that mining activities are developmentally beneficial and that revenues generated are paid to the government.
Topic:
Economics, Political Economy, Natural Resources, Governance, and Reform
Political Geography:
Afghanistan and Taliban

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