Introduction:

Least developed countries (LDCs) are low-income countries confronting severe

structural impediments to sustainable development. They are highly vulnerable to
economic and environmental shocks and have low levels of human assets.

Characteristics of least developed countries:

1. Low GDP per capita

2. High levels of poverty
3. Dependence of agriculture and the export of primary products
4. Higher rates of population growth
5. Low levels of productivity
6. High levels of unemployment and underemployment

Afghanistan is no exception to being a least developed country, The Islamic State of

Afghanistan is located in South Central Asia. Afghanistan's population was estimated at
26.7 million in 2000, making it South Central Asia's fifth largest populated country, as well
as its fifth largest land area (251,772 square miles). Afghanistan is a land-locked country
surrounded by countries such as Pakistan, India, Iran, Turkmenistan, Uzbekistan, Tajikistan
and China.

Body:

Why is it considered to be a least developed nation?

The reason why we chose Afghanistan was mainly because of Afghanistan’s political
positioning in the world today. Afghanistan has and is still suffering numerous wars and
events, which made us skeptical about the stability and or status of their economic
progress.

Out of the other factors such as location, manpower, politics and the like, the
occurrences of war played a drastic role in the shaping of what Afghanistan and its
economy is today. Some notable wars include the two Afghan Civil Wars that occurred
during 1992-2001. But the current war in Afghanistan began in 2001, when the George
W. Bush administration launched the war in Afghanistan in retaliation for the 9/11 Twin
Tower Bombing which was caused by the al-Qaida. The initial cost the U.S. had to use
estimated up to $950B dollars. In addition to the $975 billion in Overseas Contingency
Operations funds specifically dedicated to the war, the base budget for
the Department of Defense has increased by about $250 billion, and the Department of
Veterans Affairs budget has increased by more than $50 billion. Some of these costs
also are attributable to the War in Iraq.
A breakdown of the funding for the war in Afghanistan as part of overseas contingency
operations for the Department of Defense, according to Brown University research:

FY Cost of Afghanistan War Boots on Ground Comments

2001 $23 billion 9,700 9/11. Taliban falls.
2002 $23 billion 9,700
2003 $17 billion 13,100 NATO enters.
2004 $15 billion 18,300 1st vote.
2005 $21 billion 17,821 Karzai agreement.
2006 $19 billion 20,502 Violence rises.
2007 $31 billion 24,780
2008 $39 billion 32,500
2009 $56 billion 69,000 Obama surge.
2010 $94 billion 96,900 NATO surge.
2011 $107 billion 94,100 Bin Laden killed.
2012 $101 billion 65,800 Troop drawdown.
2013 $86 billion 43,300
2014 $77 billion 32,500 Troops leave.
2015 $58 billion 9,100 U.S. trains Afghan troops.
2016 $50 billion 9,800
2017 $54 billion 9,800
2018 $52 billion 9,800
2019 $52 billion* 9,800
TOTAL $975 billion

Cost to Economy

The war in Afghanistan is second only to the $4.1 trillion dollars (inflation-adjusted) spent
during World War II.

Unlike earlier wars, most American families did not feel impacted by the
Afghanistan War. There was no draft and no tax imposed directly to pay for the
war. Future generations also will pay for the addition to the debt. Researcher Ryan
Edwards estimates that the U.S. incurred an extra $453 billion in interest on the debt to
pay for the wars in the Middle East. Over the next 40 years, these costs will add $7.9
trillion to the debt.
The United Nation's Human Development Office has ranked Afghanistan as 171, out of
188 countries, in the human development index.
The report has measured countries' development based on gender inequality, maternal
mortality ratio, adolescent birth rate, share of seats in parliament, population with at
least some secondary education and the labor force participation rate.
This comes after the input of billions of US dollars into Afghanistan over the past 14 years
but Afghanistan is still among the least developed countries.
Meanwhile the Afghan government gave a number of reasons for this.
"Afghanistan's economy has been dependent on foreign aid over the past 13 years and
the withdrawal of 120,000 [international] troops and 400,000 contractors has suppressed
the country's economy, but what we have struggled to initiate was laying the
foundation stone for permanent economic programs," said Sayed Zafar Hashemi, the
president's deputy spokesman.
The report states that insecurity, poverty, endemic corruption and weak governance
are the main reasons for hampering development in Afghanistan.
"Afghanistan's per capita income is at least $779 USD, and this country is in lower levels
according to investment. Meanwhile, the country's agriculture is dependent on rain
water and it has problems with imports; when these characteristics are measured, they
place Afghanistan on the lowest parts of the list," said Hasib Muahid, deputy head of
Central Statistics Organization.
AFGHANISTAN GDP 2017 – 20.192 billion dollars

AFGHANISTAN GDP 2018 – 19.363 billion dollars

Afghanistan faced severe economic headwinds in 2018, with the economy growing by
an estimated 1.8 percent. Slow growth was driven by two major factors. Firstly, severe
drought had a strong negative impact on agricultural production. Agricultural growth
slowed to 0.8 percent as low snowfall during late 2017 and early 2018 led to the loss of
grain crops and livestock productivity. Secondly, business and investor confidence
deteriorated significantly in the context of elevated uncertainty around: i) the level and
duration of international security assistance; ii) the outcome of upcoming presidential
elections held in 28 September; and iii) peace negotiations with the Taliban.

Growth in 2019 is expected to remain sluggish but slightly recover, largely due to
improved weather conditions. Growth in the industry and service sectors will remain
subdued amidst continued political uncertainty surrounding the presidential elections,
discussions over continued international security support, and a potential peace
agreement with the Taliban. Over the medium-term, growth is projected to gradually
accelerate to around 3.5 percent by 2021, assuming a stable political transition
following the presidential election and subsequent improvement in investor confidence.
Inflation is expected to increase to 3.1 percent in 2019 and will stabilize at around five
percent in the medium term.

Sources:
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https://www.un.org/development/desa/dpad/least-developed-country-category.html

https://www.thebalance.com/cost-of-afghanistan-war-timeline-economic-impact-
4122493

https://tolonews.com/afghanistan/asias-least-developed-country-afghanistan-un-
report

https://www.un.org/development/desa/dpad/least-developed-country-
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