Afghanistan Economy 7th Semester

An overview of Afghanistan Economy
Geography
A landlocked mountainous country with plains in the north and southwest,
Afghanistan is located within South Asia and Central Asia. It is part of the US-
coined Greater Middle East Muslim world, which lies between latitudes 29° N
and 39° N, and longitudes60° E and 75° E. The country's highest point is
Noshaq, at 7,492 m (24,580 ft) above sea level. It has a continental climate
with harsh winters in the central highlands, the glaciated northeast (around
Nuristan), and the Wakhan Corridor, where the average temperature in
January is below −15 °C (5 °F), and hot summers in the low-lying areas of the
Sistan Basin of the southwest, the Jalalabad basin in the east, and the
Turkestan plains along the Amu River in the north, where temperatures
average over 35 °C (95 °F) in July.
The northeastern Hindu Kush Mountain range, in and around the Badakhshan
Province of Afghanistan, is in a geologically active area where earthquakes may
occur almost every year. They can be deadly and destructive sometimes,
causing landslides in some parts or avalanches during the winter. The last
strong earthquakes were in 1998, which killed about 6,000 people in
Badakhshan near Tajikistan. This was followed by the 2002 Hindu Kush
earthquakes in which over 150 people were killed and over 1,000 injured. A
2010 earthquake left 11 Afghans dead, over 70 injured, and more than 2,000
houses destroyed.
The country's natural resources include: coal, copper, iron ore, lithium,
uranium, rare earth elements, chromite, gold, zinc, talc, barites, sulfur, marble,
precious and semi-precious stones, natural gas, and petroleum, among other
things. In 2010, US and Afghan government officials estimated that untapped
mineral deposits located in 2007 by the US Geological Survey are worth at least
$1 trillion.
At 652,230 km2 (251,830 sq mi), Afghanistan is the world's 41st largest country,
slightly bigger than France and smaller than Burma, about the size of Texas in
the United States. It borders Pakistan in the south and east; Iran in the west;
Turkmenistan, Uzbekistan, and Tajikistan in the north; and China in the Far
East.
Al- Taqwa institute of Higher Education Page 1

Demographics
The population of Afghanistan was estimated at 29.2 million in 2017. Of this,
15 million are males and 14.2 million females. About 22% of them are urbanite
and the remaining 78% live in rural areas. An additional 3 million or so Afghans
are temporarily housed in neighboring Pakistan and Iran, most of whom were
born and raised in those two countries. This makes the total Afghan population
at around 33,332,025, and its current growth rate is 2.34%. This population is
expected to reach 82 million by 2050 if current population trends continue.
The only city with over a million residents is its capital, Kabul. Other large cities
in the country are, in order of population size, Kandahar, Herat, Mazar-i-Sharif,
Kunduz, Jalalabad, LashkarGah, Taloqan, Khost, Sheberghan, and Ghazni.
Largest cities or towns in Afghanistan

2012 estimate
Rank Name Province Pop.
1 Kabul Kabul Province 3,289,000
Kandahar
2 Kandahar 491,500
Province
3 Herat Herat Province 436,300
4 Mazar-i-Sharif Balkh Province 368,100
Kunduz
5 Kunduz 304,600
Province
Herat
Kabul Takhar
6 Taloqan 219,000
Province
Nangarhar
7 Jalalabad 206,500
Province
Kandahar Baghlan Mazar-i-Sharif
8 PuliKhumri 203,600
Province
Parwan
9 Charikar 171,200
Province
Jowzjan
10 Sheberghan 161,700
Province

Ethnic groups in Afghanistan
Afghanistan's population is divided into several ethno linguistic groups, which
are listed in the chart below:
World Factbook c. 2013

Ethnic group estimate[2]
Pashtun 42%
Tajik 27%
Hazara 9%
Uzbek 9%
Aimak 4%
Turkmen 3%
Baloch 2%
Others (Pashayi,
Nuristani, Pamiri,
Arab, etc.) 4%
Languages
Spoken languages of Afghanistan

Dari (Afghan Persian) 50%
Pashto 35%
Uzbek and Turkmen 11%
30 others including Balochi 4%
There are a number of smaller regional languages, they include Uzbek,

Turkmen, Balochi, Pashayi, and Nuristani. A number of Afghans are also fluent
in Urdu, English, and other foreign languages.
Religions
Religion in Afghanistan
Sunni Islam 84.7–89.7%
Imamiyyah 7–15%
Ismailism 4.5%
Other religion 0.5%

Over 99% of the Afghan population is Muslim. According to latest estimates, up
to 90% practice Sunni Islam and the remaining 7–15% follow to Shia Islam.
Governance
Afghanistan is an Islamic republic consisting of three branches, the executive,
legislative, and judicial. The nation is led by President Ashraf Ghani with Abdul
Rashid Dostum and Sarwar Danish as vice presidents. Abdullah Abdullah serves
as the chief executive officer (CEO). The National Assembly is the legislature, a
bicameral body having two chambers, the House of the People and the House
of Elders. The Supreme Court is led by Chief Justice Said Yusuf Halem, the
former Deputy Minister of Justice for Legal Affairs.
Administrative divisions
Afghanistan is administratively divided into 34 provinces (wilayats). having a
governor and a capital. The country is further divided into nearly 400 provincial
districts, each of which normally covers a city or a number of villages. Each
district is represented by a district governor.
The provincial governors are appointed by the President of Afghanistan and

the district governors are selected by the provincial governors. The provincial
governors are representatives of the central government in Kabul and are
responsible for all administrative and formal issues within their provinces.
There are also provincial councils that are elected through direct and general
elections for a period of four years.The functions of provincial councils are to
take part in provincial development planning and to participate in the
monitoring and appraisal of other provincial governance institutions.
According to article 140 of the constitution and the presidential decree on

electoral law, mayors of cities should be elected through free and direct
elections for a four-year term. However, due to huge election costs, mayoral
and municipal elections have never been held. Instead, mayors have been
appointed by the government. In the capital city of Kabul, the mayor is
appointed by the President of Afghanistan.

Politics of Afghanistan
The politics of Afghanistan consists of the council of ministers, provincial
governors and the national assembly, with a president serving as the head of
state and commander-in-chief of the Afghan Armed Forces. The nation is
currently led by President Ashraf Ghani who is backed by two vice presidents,
Abdul Rashid Dostum and Sarwar Danish. In the last decade the politics of
Afghanistan have been influenced by NATO countries, particularly the United
States, in an effort to stabilise and democratise the country. In 2004, the
nation's new constitution was adopted and an executive president was
elected. The following year a general election to choose parliamentarians took
place.
Hamid Karzai was declared the first ever democratically elected head of state
in Afghanistan in 2004, winning a second five-year term in 2009. The National
Assembly is Afghanistan's national legislature. It is a bicameral body, composed
of the House of the People and the House of Elders. The first legislature was
elected in 2005 and the current one in 2010. Members of the Supreme Court
were appointed by the president to form the judiciary. Together, this new
system is to provide a new set of checks and balances that was unheard of in
the country.
Brief timeline of Afghan politics

Government operation in Afghanistan historically has consisted of power
struggles, coups ‫ کودتا‬and unstable transfers of power. The country has been
governed by various systems of government, including a monarchy, republic,
theocracy, dictatorship, and a pro-communist state.
 1709 - MirwaisHotak establishes the Hotaki dynasty at Kandahar and

declares Afghanistan (land of the Afghans) an independent state.
 1747 - Ahmad Shah Durrani establishes the Durrani Empire and adds to
it new territories.
 1838 - British India invades the land during the First Anglo-Afghan War
and begins to influence the politics of Afghanistan.
 1919 - King Amanullah Khan takes the throne after the Third Anglo-
Afghan War, British influence ends.
 1973 - Mohammed Daoud Khan, Prime Minister and a member of the
royal family, seizes power while King Mohammad Zahir Shah is visiting
Italy.
 1978 – Daoud Khan and his family are assassinated during the Saur
Revolution, the leftist People's Democratic Party of Afghanistan (PDPA)
seizes power.
 1979 – President Nur Muhammad Taraki, leader of PDPA, is assassinated
and replaced by Hafizullah Amin. Amin is then assassinated and the
Soviet Union invades. BabrakKarmal is installed as the new president.
 1987 - President Mohammad Najibullah replaces Karmal and the country
begins to see some stability.
 1989 – Soviet army withdraws all troops from the country. The U.S.
embassy is closed.
 1992 – President Najibullah resigns and Kabul falls to mujahideen
factions. Burhanuddin Rabbani becomes leader of the new Islamic State
of Afghanistan and a civil war starts.
 1996 – Mohammed Omar, founder of the Islamic Emirate of
Afghanistan, is declared Commander of the Faithful at Kandahar and his
Taliban forces begin conquering the northern parts of the country.
 2001 – United States and coalition forces invade Afghanistan and
overthrow the Taliban government. Hamid Karzai becomes leader of the
Afghan Interim Administration at the International Conference on
Afghanistan in Germany.
 2003 - Loya Jirga adopts new constitution, restructuring the government
as an Islamic republic.
 2004 - Hamid Karzai is elected President of Afghanistan.
 2014 - Ashraf Ghani is elected President of Afghanistan, Abdullah
Abdullah becomes the country's Chief Executive Officer (CEO).
Afghanistan is an Islamic republic consisting of three branches of power

(executive, legislative, and judiciary) overseen by checks and balances. The
country is led by President Ashraf Ghani, who replaced Hamid Karzai in 2014.
Before the election of 2004, Karzai led the country after being appointed as
President of the Afghan Transitional Administration. While supporters have
praised Karzai's efforts to promote national reconciliation and a growing
economy, critics charge him with failing to stem corruption and the illegal drug
production.
The Supreme Court of Afghanistan is led by Chief Justice Sayed Yusuf Halem,
replacing Abdul Salam Azimi in 2014. The Deputy Chief Justice is Bahauddin
Baha.

Judicial branch
The constitution of Afghanistan mandates a Supreme Court. The Supreme
Court is the highest judicial authority in Afghanistan, and is the court of last
resort. Judges are appointed by the President, and confirmed by the National
Assembly. Lower courts included magistrate courts, Courts of First Instance,
and Intermediate Court of Appeals. Intermediate Court of Appeals review
decisions of lower courts, before appeals are sent to the Supreme Court. If an
appeal loses, they can be sent to the Supreme Court. Courts of First Instance
exist in every city. They have several branches which tries all major cases. The
branches include Criminal, Civil, Religious, Administrative, Labor, and Family
divisions. Also in the first instance include military courts, which try military
personals. Magistrate Courts are at the lowest level, which try minor civil and
criminal cases.
Political parties
Political parties in Afghanistan are in flux and many prominent players have
plans to create new ones. Some of the political parties in Afghanistan are as
follow:
 Afghan Social Democratic Party (Afghan Mellat)

 HezbiIslami
 Jamiat-e Islami
 National Islamic Front (Hezb-e-Mahaz-e-MiliIslami)
 Islamic Dawah Organization (TanzimDawat-e-Islami)
 National Movement of Afghanistan (Hezb-e-Nuhzhat-e-Mili Afghanistan)
 National Solidarity Movement (Hezb-e-Nahzat-e-HambastageeMili)
 National Islamic Unity Party (Hezb-e-Wahdat-e-MiliIslami)
 National Solidarity Party (Hezb-e-PaiwandMili)
 Islamic Movement of Afghanistan (Harakat-e Islami-yi Afghanistan)
 National Congress Party (Hezb-e-Congra-e-Mili Afghanistan)
International organization participation

Afghanistan is a member of the following organizations:
 Shanghai Cooperation   International Finance

Organisation (observer) Corporation
 South Asian Association for  International Labour
Regional Cooperation Organization
(SAARC)  International Union of Railways
 Colombo Plan  Interpol
 Organisation of Islamic  International Olympic Committee
Cooperation (OIC)  International Organization for
 Economic Cooperation Migration
Organization (ECO)  International Telecommunication
 Group of 77 Union
 World Bank  Non-Aligned Movement
 Asian Development Bank  Organisation for the Prohibition
(ADB) of Chemical Weapons
 International Monetary Fund  United Nations (UN)
(IMF)  United Nations Conference on
 United Nations Economic and Trade and Development
Social Commission for Asia  United Nations Development
and the Pacific Programme (UNDP)
 Islamic Development Bank  United Nations Industrial
(IDB) Development Organization
 Food and Agriculture  Universal Postal Union
Organization  World Federation of Trade
 International Fund for Unions
Agricultural Development  World Health Organization
 International Atomic Energy  World Meteorological
Agency (IAEA) Organization
 International Civil Aviation  World Tourism Organization
Organization  World Trade Organization (WTO)
 International Criminal Court (initially observer, became
(ICC) member December 2015)z

Second week:
GDP of Afghanistan
The Gross Domestic Product (GDP) in Afghanistan was worth 19.47 billion US
dollars in 2016. The GDP value of Afghanistan represents 0.03 percent of the
world economy. GDP in Afghanistan averaged 6.24 USD Billion from 1960 until
2016, reaching an all time high of 20.54 USD Billion in 2012 and a record low of
0.54 USD Billion in 1960.
Afghanistan GDP Last Previous Highest Lowest Unit
GDP Annual Growth Rate -2.40 2.20 28.60 -2.40 percent
GDP 19.47 19.70 20.54 0.54 USD Billion
GDP per capita 596.30 599.10 630.40 364.10 USD
GDP per capita PPP 1739.60 1748.00 1839.30 1062.20 USD
Afghanistan GDP
The biggest sector of Afghanistan´s economy is services. Wholesale and retail
trade, restaurants and hotels; transport, storage and communications; finance,
insurance and real estate and community, personal, social and government
services account for 49 percent of the GDP. Agriculture creates 26 percent of
the output. Manufacturing and mining constitute 13 percent of the wealth and
construction 12 percent. This page provides - Afghanistan GDP - actual values,
historical data, forecast, chart, statistics, economic calendar and news.

Afghanistan GDP - actual data, historical chart and calendar of releases - was
last updated on January of 2018.
Actual Previous Highest Lowest Dates Unit Frequency
19.47 19.70 20.54 0.54 1960 - 2016 USD Billion Yearly Current USD
GDP - composition by sector:

Agriculture: 22%
industry: 22%
services: 56%
note: data exclude opium production (2015 est.)
Definition: This entry gives the percentage contribution of agriculture, industry,

and services to total GDP.
THIRD WEEK
Afghanistan GDP Annual Growth Rate 2003-2018

The Gross Domestic Product (GDP) in Afghanistan contracted 2.40 percent in
2016 from the previous year. GDP Annual Growth Rate in Afghanistan
averaged 8.78 percent from 2003 until 2016, reaching an all time high of 28.60
percent in 2003 and a record low of -2.40 percent in 2016.

GDP Annual Growth Rate -2.40 2.20 28.60 -2.40 percent [+]
GDP 19.47 19.70 20.54 0.54 USD Billion [+]
GDP per capita 596.30 599.10 630.40 364.10 USD [+]
GDP per capita PPP 1739.60 1748.00 1839.30 1062.20 USD [+]
Afghanistan is one of the poorest and least developed countries in the world.
Since the collapse of the Taliban government and the NATO led invasion in
2001, the economy has been steadily growing due to the influx of foreign aid
and investments. However, security threats, the lack of infrastructure and
endemic corruption have been hampering economic activity. Agriculture (35
percent of GDP) is the most important sector of the economy, as the majority
of the population is dependent on crops. The resurgence of the public sector
has led to growth in services, which now account for around 40 percent of
GDP. Mining has also been growing rapidly due to exploration of the country’s
vast mineral resources, such as lithium, and precious stones.. This page
provides - Afghanistan GDP Annual Growth Rate - actual values, historical data,
forecast, chart, statistics, economic calendar and news. Afghanistan GDP
Annual Growth Rate - actual data, historical chart and calendar of releases -
was last updated on January of 2018.
-2.40 2.20 28.60 -2.40 2003 - 2016 percent Yearly
Afghanistan GDP per capita 2002-2018

The Gross Domestic Product per capita in Afghanistan was last recorded at
596.30 US dollars in 2016. The GDP per Capita in Afghanistan is equivalent to 5
percent of the world's average. GDP per capita in Afghanistan averaged 498.89
USD from 2002 until 2016, reaching an all time high of 630.40 USD in 2012 and
a record low of 364.10 USD in 2004.

GDP Annual Growth Rate -2.40 2.20 28.60 -2.40 percent
GDP 19.47 19.70 20.54 0.54 USD Billion
GDP per capita 596.30 599.10 630.40 364.10 USD
GDP per capita PPP 1739.60 1748.00 1839.30 1062.20 USD
Afghanistan GDP per capita

The GDP per capita is obtained by dividing the country’s gross domestic
product, adjusted by inflation, by the total population. This page provides -
Afghanistan GDP per capita - actual values, historical data, forecast, chart,
statistics, economic calendar and news. Afghanistan GDP per capita - actual
data, historical chart and calendar of releases - was last updated on January of
2018.
596.30 599.10 630.40 364.10 2002 - 2016 USD Yearly

Week four
Nominal vs. Real GDP, and the GDP Deflator

Real Gross Domestic Product (real GDP) is a macroeconomic measure of the
value of economic output adjusted for price changes (i.e., inflation or
deflation). This adjustment transforms the money-value measure, nominal
GDP, into an index for quantity of total output. Although GDP is total output, it
is primarily useful because it closely approximates the total spending:
The sum of consumer spending, investment made by industry, excess of

exports over imports, and government spending. Due to inflation, GDP
increases and does not actually reflect the true growth in an economy. That is
why the GDP must be divided by the inflation rate (raised to the power of units
of time in which the rate is measured) to get the growth of the real GDP.
Example:
Suppose we wish to calculate the real GDP for the year 2001 in terms of 1996
dollars. The value for (note that these values are for illustration purposes only)
1996 price deflator is 100 and the 2001 price deflator is 115. The 2001 GDP in
nominal terms is $10 trillion dollars.
Then: Real GDP year 2001 in 1996 dollars =$10 trillion × (100 / 115) = $8.6 trillion
What is 'Nominal GDP'
Nominal GDP is gross domestic product (GDP) evaluated at current market

prices, GDP being the monetary value of all the finished goods and services
produced within a country’s borders in a specific time period. Nominal differs
from real GDP in that it includes changes in prices due to inflation or a rise in
the overall price level.
The GDP Deflator
The GDP deflator is an economic metric that converts output measured at

current prices into constant-dollar GDP. This includes prices for business and
government goods and services, as well as those purchased by consumers. This
calculation shows how much a change in the base year's GDP relies upon
changes in the price level. If we wish to analyze the impact of price changes
throughout an economy, then the GDP deflator is the preferred price index.
This is because it does not focus on a fixed basket of goods and services and
automatically reflects changes in consumption patterns and/or the
introduction of new goods and services.
Real GDP for a given year, in relation to a "base" year, is computed by

multiplying the nominal GDP for a given year by the ratio of the GDP price
deflator in the base year to the GDP price deflator for the given year.
Difference between Nominal GDP and Real GDP
Basis for
Nominal GDP Real GDP
Comparison
The aggregate market value of Real GDP refers to the value of

the economic output produced economic output produced in a
Meaning in a year within the boundaries given period, adjusted
of the country is known as according to the changes in the
Nominal GDP. general price level.
GDP without the effect of

What is it? Inflation adjusted GDP
inflation.
Base year prices or constant

Expressed in Current year prices
prices.
Value Higher Generally, lower.
Comparison of two or more

Comparison of various quarters
Uses financial year can be done
of the given year can be made.
easily.
Economic Good indicator of economic

Cannot be analyzed easily.
Growth growth.

Fifth week
Afghanistan - Agriculture
Agriculture has traditionally driven the Afghan economy, accounting for
approximately 50 percent of GDP before the Soviet attack in 1979. However,
the agricultural sector has never produced at full capacity.
Before the attack, only 30 percent of the total arable (‫ )کرنیزه مځکه‬land of 15
million hectares was cultivated. At that time the main exports were sugarcane,
sugar beets, fruit, nuts, vegetables, and wool (‫)وړۍ‬.However, the continuing
war reduced production significantly. Soviet troops planted land mines all over
the country, rendering large areas of land useless and forcing large sections of
the population to become refugees.
The resulting cut in production caused massive food shortages. Kabul

University produced a report in 1988 which found that agricultural output was
45 percent less than the 1978 level. The UNDP estimated that in 1992 only 3.2
million hectares of land were cultivated of which only 1.5 million hectares were
irrigated.
In 2001, the principal food crops were corn, rice, barley)‫ (اوربشي‬wheat,
vegetables, fruits, and nuts. In Afghanistan, industry is also based on
agriculture, along with raw materials. The major industrial crops are cotton,
tobacco, castor beans, and sugar beets. Sheep farming is also extremely
valuable. The major sheep product exports are wool and sheep skins.
In 2000, Afghanistan experienced its worst food crisis ever recorded because of
a very severe drought. Such low levels of recorded rainfall had not been seen
in the country since the 1950s. The water used to irrigate the lands comes
from melting snow, and in 2000 the country experienced very little snowfall.
The southern parts of the country were badly affected, and farmlands
produced 40 percent of their expected yields. Half of the wells in the country
dried up during the drought, and the lake feeding the Arghandab dam dried up
for the first time since 1952. The barley crops were destroyed and the wheat
crops were almost wiped out. In the middle of 2000, the drought's
consequences were felt in Kabul, when more and more displaced people were
migrating to the capital.

The prices of staple)‫ (اساسي‬foods have also increased in different parts of the
country because demand is much higher than supply. For instance, in Kabul, a
family of 7 can earn US$1.14 a day if the head of the family is lucky enough to
find employment, whereas a loaf of bread costs US$0.63, roughly half an
individual's income per day.
A large segment of the Afghan population depends on food imported from

abroad or distributed by aid organizations. The civil trouble and drought
increased the country's food import requirements to a record 2.3 million
metric tons in 2000/2001, according to the UN World Food Program. Much of
the needed imports come from the international community and the rest from
Pakistan. The interruption to the flow of this international aid caused by the
2001 war between U.S.-led forces on the Taliban has threatened general
famine ‫قحطي‬and starvation to much of the Afghan population.
The number of livestock was greatly reduced during the years of war. In 1970,
the total livestock population was estimated at 22 million sheep, 3.7 million
cattle, 3.2 million goats, and 500,000 horses. According to a survey carried out
in 1988, the number of cattle had declined by 55 percent, sheep and goats by
65 percent, and the number of oxen used to plow the fields was down by 30
percent. Much of the livestock is malnourished ‫سؤی تغذیه‬and diseased.
Afghanistan in 2000 was the world's largest producer of opium, used to

produce the drug heroin. The total opium production for 1998 was estimated
at 2,102 metric tons against a total of 2,804 metric tons in 1997.
This reduction in the level of poppy production was due to heavy and
continuous rains and hailstorms in some of the major poppy producing
provinces. However, in 1999, the country produced a amazing 4,600 metric
tons. The decaying economy forced farmers to grow the opium poppies as a
cash crop , and this practice was supported by the Taliban until 2001, because
it provided farmers with money that they would otherwise not be able to earn.
However, in 2001, the Taliban ordered the country's farmers to stop growing
poppies following an announcement by Mullah Omar, the supreme religious
leader that opium cultivation is not permitted under Islam.
While analysts contend ‫ ادعا لري‬that the reason had more to do with convincing
the United Nations and the international community to lift sanctions, officials
from various countries argued that this was done in order to boost the market
price for heroin. Heroin still flowed from Afghanistan, only at a much higher

price—after the Taliban's ban on opium growing, the price shot from $44 to
$700 per kilo. This caused speculation that the Taliban had stockpiled a large
supply of the drug, and the higher proceeds allowed them further funding for
military and government operations. With the September 2001 attacks on the
United States, opium production was believed to be resumed.
The agricultural products of Afghanistan

Only a very small share of Afghanistan's land (about 15 percent), mostly in
scattered valleys, is suitable for farming; about 6 percent of the land is actually
cultivated. At least two-thirds of this farmland requires irrigation. Water is
drawn from springs and rivers and is distributed through surface ditches and
through underground channels, or tunnels, which are excavated and
maintained by a series of vertical shafts. Such a tunnel is known as a karez or
qanat. In 1987 about 26,600 sq km (10,300 sq mi) of farmland were irrigated.
Wheat is the most important crop, followed by barley, corn, and rice. Cotton is
another important and widely cultivated crop. Fruit and nuts are among
Afghanistan's most important exports.
Afghanistan is noted for its unusually sweet grapes and melons, grown mostly
in the southwest, north of the Hindu Kush, and in the productive regions
around Herat. Raisins ‫کشمش‬are also an important export. Other important fruits
are apricots, cherries, figs, mulberries,‫ شاه توت‬and pomegranates.
Livestock is nearly as important as crops to Afghanistan's economy. Karakul

sheep are raised in large numbers in the north. The tight curly fleece of Karakul
lambs is used to make Persian lamb coats. Other breeds of sheep, such as the
fat-tailed sheep, and goats are also raised. Afghanistan is a major supplier in
the international drug trade. It is the second-largest opium producer after
Myanmar (formerly known as Burma), with 950 metric tons produced in 1994.
Afghanistan also produces significant quantities of hashish.
Sixth week
Food security
Food security is a condition related to the supply of food, and individuals'
access to it. There is evidence of granaries ‫د غلې انبار‬being in use over 10,000
years ago, with central authorities in civilizations including ancient China and
ancient Egypt being known to release food from storage in times of food
shortage. At the 1974 World Food Conference the term "food security" was
defined with an emphasis on supply. Food security, they said, is the
"availability at all times of enough world food supplies of basic foot products to
sustain a secure expansion of food consumption and to balance fluctuations in
production and prices". Later definitions added demand and access issues to
the definition. The final report of the 1996 World Food Summit states that
food security "exists when all people, at all times, have physical and economic
access to sufficient, safe and nutritious food to meet their nutritional needs
and food preferences for an active and healthy life".
Household food security exists when all members, at all times, have access to
enough food for an active, healthy life. Individuals who are food secure do not
live in hunger or fear of starvation. Food insecurity, on the other hand, is a
situation of "limited or uncertain availability of nutritionally adequate and safe
foods or limited or uncertain ability to acquire acceptable foods in socially
acceptable ways", according to the United States Department of Agriculture
(USDA). Food security incorporates a measure of elasticity to future trouble or
unavailability of critical food supply due to various risk factors including
droughts, shipping disruptions, fuel shortages, economic instability, and wars.
In the years 2011–2013, an estimated 842 million people were suffering from
never-ending hunger. The Food and Agriculture Organization of the United
Nations, or FAO, identified the four pillars of food security as availability,
access, utilization, and stability. The United Nations (UN) recognized the Right
to Food in the Declaration of Human Rights in 1948, and has since noted that it
is vital for the enjoyment of all other rights.
The 1996 World Summit on Food Security declared that "food should not be
used as an instrument for political and economic pressure". According to the
International Centre for Trade and Sustainable Development, unsuccessful
agriculture market regulation and the lack of anti-dumping mechanisms cause
much of the world's food scarcity and malnutrition.
What is food insecurity?

Since we talk about food security and food insecurity quite a bit here at Food
Forward, we thought it would be helpful to define this term, what it means,
and how we measure it. Here’s our definition: food insecurity refers to a lack of
access to enough good, healthy, and culturally appropriate food. There’s a lot
going on there, so let’s unpack it a bit.
Enough: this one’s the easiest. Everyone needs to eat, and we all need to eat a
certain amount to stay healthy, active, and happy.
Good: Good is a relative word. What’s good food for you might not be good
food to your friend, sibling, ‫ هم نژاد‬neighbor, or co-worker. But instead of
ignoring the vagueness of this term, we should embrace it! Everybody deserves
to eat food that they think is good, right? Nobody should have to eat peas if
they hate peas but love carrots.
Healthy: we love healthy food here! Healthy food is nutritious and sustaining.
It’s full of vitamins, minerals, fiber, energy, and all the other things that our
bodies need to be happy.
Culturally appropriate: like “good”, this term brings us back into the subjective
area. Having access to culturally appropriate food means that people have
food that they are familiar and comfortable with. It knows how to shop for it or
select it, prepare and cook it, and how to enjoy it! Part of this is availability of
familiar foods & varieties, but it also could include things like the language of
the label and instructions.
What’s the difference between food insecurity and hunger?

While food security and hunger are related, they are not the same. In fact, the
USDA recently removed references to hunger in their food security
measurements, citing the need for a separate and more detailed study on
hunger. Here are some key differences between the two:
First, food security is socio-economic (financial and cultural), while hunger is

physiological (physical). Studies on food security attempt to measure reliable
access to food, with questions that include anxiety over shopping, budgeting
for healthy meals, and running out of food. Hunger, on the other hand, is a
physical sensation. We could say that hunger is one potential consequence of
food insecurity, but food insecurity does not always result in hunger.
Second, we measure food security at the household level and hunger at the
individual level. A family experiencing food insecurity may have some members
that go hungry and others who do not. For example, parents in food insecure
families might have enough food to feed their children, but might experience
hunger themselves.

How do we measure food insecurity?
So, with all this talk about what it is, how do we actually measure something
like food insecurity? Food Forward and most other hunger-relief nonprofits
rely on measurements that the USDA conducts annually. Every year tens of
thousands of households respond to their short survey, which is added onto
the survey.
There are only 10 questions, and an additional 8 questions for families with
children. The questions ask about various indicators of food insecurity, ranging
from the least severe (“We worried whether our food would run out before we
got money to buy more”) to the most severe (“In the last 12 months did you or
other adults in your household ever not eat for a whole day because there
wasn’t enough money for food”).
Once the answers are collected, the USDA groups households into the 4
classifications of food security: high food security, marginal food security, low
food security, and very low food security. Households are considered to have
low food security if they reported experiencing 3 or more indicators of food
insecurity. Households are considered to have very low food security if they
reported 3 indicators of food insecurity and some degree of eating less than
they should / skipping meals.
This system of measuring food security allows families to self-report their own
experiences, and also keeps the results very clear. It gives us a very simple
measurement to look at: what percent of households reported 3 or more
indicators of food insecurity. This keeps things easy for those of us who care –
individuals, volunteers, policy makers, students, you and me – to understand.
Why talk about food security at all?

Food security and food insecurity are really important concepts for us to think
and talk about. By moving the discussion of food policy beyond hunger (which
again, refers only to a physical sensation), food insecurity captures the reality
of individuals and families who struggle to get enough food.
Finally, these terms give us a working definition and standard for

measurement. This allows community organizers, non-profit leaders, policy
makers, and government officials to talk with each other and work together to
create plans that will improve overall access to food, health, and wellness.

Because even as we dive into definitions, studies, and statistics, the overall
goal is to secure everyone’s right to eat well and be well.
Fighting food insecurity in Afghanistan.
Wheat production
Wheat production in 2013 was the highest the country has experienced in the
past 30 years, with the harvest estimated at around 6.5 million tons, according
to MAIL.
Increased grain production is welcome, but food security is not smooth, with
poor transport links and distribution networks creating continuing challenges,
not least in the winter months, when areas like Badakshan are cut off.
Afghanistan is also prone ‫ متمایل‬to recurring drought and natural disasters.
National grain deficits are in the main filled by commercial imports from
neighboring Pakistan and Kazakhstan. But the global food price hikes of 2008
showed international markets cannot always be relied upon for freely available
and affordable food. That year, wheat flour prices in Afghanistan doubled. The
reserves should also bring greater stability to local grain markets.
weakness
Internally displaced persons (IDPs) and returned Afghan refugees, who
currently number around 536,000, are disproportionally exposed to food
insecurity and malnutrition. According to UNICEF's 2013 mid-year report, the
number of Afghans displaced by conflict increased by 7.4 percent from 2011 to
2012.
A report by the food shortage Early Warning Systems Network (FEWS NET) in
November 2013 raises concerns about increasing food security issues among
IDPs, particularly those in western Herat province, bordering Iran.
Many families struggle during the winter months, when job opportunities are
limited and the prices of necessities such as fuel, wood and oil are at their
highest. The head of the malnutrition ward at the Indira Gandhi hospital, Dr
Saifullah Abasin, says up to 70 percent of the children in the hospital are
underweight, and up to 85 percent are skinny.‫الغر‬

A 2012 World Bank report noted that on average, 29 percent of Afghans were
not able to meet their daily requirement of 2,100 calories.
Children are particularly vulnerable. According to a WFP statement released in

October 2013, 60 percent of children are facing hunger. “While security issues
related to insurgency and foreign aggression monopolize most discourse in
Afghanistan, a lesser noted form of insecurity – food and nutrition shortage –
also threatens the country's prosperity,” said the statement.
Challenges
A functioning Strategic Grain Reserve network will help provide resources to
vulnerable populations, but rising insecurity poses a major challenge for
humanitarians looking to provide food assistance.
“Security impacts us from a construction point of view, for example, access to

supplies, and monitoring activities,” said Keiko Izushi, WFP's Head of Donor
Relations, Reports and Communications. “As of now, we don't see any
complications, but if the situation becomes worse, these things could become
more challenging.”
A growing concern in the aid community is insecurity on roads, which are the
principal means of transporting food. In the first eleven months of 2013, the
UN Office for the Coordination of Humanitarian Affairs (OCHA) recorded 266
incidents against humanitarian personnel, facilities and assets.
Corruption can also be a challenge
“A major problem is that officials at the provincial level give distributions to

their circle of people first, so rich and powerful people get food first and many
times the people who need it, like farmers, do not receive anything,” said an
Afghan government official from Kunduz.
Emergency grain supplies have sometimes disappeared on their way to

starving farmers in the north of the province. In other cases, government
officials have been arrested while diverting food aid to local markets, and
elsewhere leading officials have simply helped themselves to stored grain
supplies.
“We are aware,” said WFP's Izushi. “This is why we involve the government - it
is part of our capacity building and training - but the state also has to take
responsibility.”

Afghanistan - IPC Acute Food Insecurity Situation Overview, Current
Aug-Nov 2017
Report
From Integrated Food Security Phase Classification
Published on20 Aug 2017—View Original
• IPC current post crop analysis show slightly better food security situation
then pre-harvest. Out of 34 provinces 21 were classified in phase 3, one of the
province Badghis is classified in phase 4.
• Out of 21 provinces classified in phase 3, provinces with higher number of

proportions in phase 4 were: Badghis (25%), Bamyan (14%), Daikundi (10%),
Ghor (12%), Saripul( 10%) and Khost (10%).
• Nangarhar and Kandahar are the provinces with lower percentages in crisis
situations, but due to greater population compare to other provinces hosting
highest number of food insecure population in phase 3 or above.
• Due to insecurity incidents enough evidence from northern east province

Badakhshan was not obtained, with support of contributing factors the
province is classified in phase 3 with only 5% of the population in emergency
phase.
• Internally Displaced Persons (IDPs) host communities; undocumented

returnees and land less households are most vulnerable and worst affected by
food insecurity. . Food security assessment by OCHA and food security and
agriculture cluster shows high level of food insecurity in these group crossing
emergency thresholds.
• Conflicts, natural disasters, high rate of documented and undocumented

return, poor livelihoods infrastructure and under development are the major
drivers of food insecurity in Afghanistan.

Seventh week
Afghanistan - Industry
As with other sectors of the economy, Afghanistan's already struggling
industries have been overcome by over two decades of civil fighting and war
that left most of the countries factories and even much of the cottage industry
sector inoperative. Still in an early stage of growth before the outbreak of war,
industry's development has been stunted since; those few industries that have
continued production remain limited to processing of local materials. The
principal modern industry is cotton textile production, with factories at Pol e
Khomri, Golbahar, Begram, Balkh, and Jabal as Saraj, just north of Charikar.
Important industries in 2000 included textiles, soap, furniture, shoes, fertilizer,
cement, handwoven carpets, natural gas, coal, and copper.
Carpet making is the most important handicraft industry, but it has suffered
with the flight of rug makers during the civil war and since the 2001 US-led
bombing campaign. Carpet-making is centered on the north and northwest
regions of the country. Afghan carpets are made of pure wool and are hand-
knotted, and much of the work is done by women. Production has fluctuated
widely from year to year, increasing somewhat during the early 1990s with the
establishment of selected "zones of tranquility" targeted for UN reconstruction
assistance.
Afghanistan Industry Sectors

Afghanistan’s industry sectors are slowly emerging, after more than three
decades of civil fighting and war. Most of the nation’s factories and cottage
industries were rendered inoperative and growth has been hampered since.
However, after the war, industrial development has been slow and limited to
cotton textile production and agriculture. Although the present government
has partnered with India to rebuild its urban infrastructure and
telecommunications, the process has been slow due to continued acts of
terrorism and civil war. Afghanistan in the 2000s had industries that included
textiles, soap, furniture, fertilizer, cement, natural gas and copper.
Afghanistan Industry Sectors: Priority Areas

Agriculture: Agriculture remains the primary means of livelihood in
Afghanistan, generating more than 50% of the country’s GDP. There are more
than one million farms in Afghanistan that contribute much to regional
development and related private businesses. Packaging and processing of
agricultural products are the areas in which the Afghan people can invest.
Production of machinery for the agro-business and agro-processing industries
is another profitable area where there is a potential for procurement of new
machines to replace the Soviet-era ones. Demand for new machinery for grain
cleaning, tractor machinery and ploughs are expected to shape the agriculture
sector in the long term.
Construction equipment: Due to reconstruction initiatives in the nation,

demand for state-of-the-art equipment by both local and state construction
companies will push the demand for procurement of construction equipment.
A new market could potentially take over the wheel from international
organizations on the pricing front.
Telecommunications: As of 2010, four major telecom providers have invested

more than $1 billion in developing comprehensive telecom infrastructure in
the nation. Afghanistan’s mobile phone industry has exploded from zero users
in 2002 to more than 5 million by 2010. Due to the competition, a SIM card
today costs $1 and handsets as less as $10. The number of cell phone users is
expected to more than double by 2011.
Manufacturing: Due to a huge pool of unemployed resources, the need to

create a labor-intensive, cost-effective manufacturing sector will soon be felt.
As labor costs in countries like India and China are increasing steadily,
Afghanistan presents a low cost option for many organizations looking to build
manufacturing facilities in the country. Manufacturing of low-end products,
such as toilet paper, plastic ware, footwear, clothing, tires and tubes, soaps
and detergents, and blankets can offer a viable area of investment.
Week eight
Mining in Afghanistan
Mining in Afghanistan is controlled by the Ministry of Mines and Petroleum,
which is headquartered in Kabul with regional offices in other parts of the
country. Afghanistan has over 1400 mineral fields, containing barite, chromate,
coal, copper, gold, iron ore, lead, natural gas, petroleum, precious and semi-
precious stones, salt, sulfur, talc, and zinc, among many other minerals.

Gemstones include high-quality emerald,‫ شین زمرد‬lapis lazuli, red garnet and
ruby. According to a joint study by The Pentagon and the United States
Geological Survey, Afghanistan has an estimated 3 trillion USD of unused
minerals. There are six lapis mines in Afghanistan, the largest being located in
Badakhshan province. There are around 12 copper mines in Afghanistan,
including the Aynak copper deposit located in Logar province.
Afghanistan's significance from an energy standpoint stems from its

geographical position as a potential transit route for oil and natural gas exports
from Central Asia to the Arabian Sea. This potential includes the construction
of the Trans-Afghanistan Pipeline gas pipeline. The first Afghan oil production
began in October 2012. Afghanistan's resources could make it one of the
richest mining regions in the world.
The United States Geological Survey (USGS) and the British geological survey
were doing resource estimation work in the country. Prior to that work,
Afghanistan's exploration activity had been conducted by geologists from the
Soviet Union who left good-quality geologic records that indicate significant
mineral potential. Resource development would require improvements in the
infrastructure and security in Afghanistan. The government had awarded
contracts to develop the Aynak copper project and the Hajigak iron ore project;
in addition, the government could offer tenders for new exploration, including
exploration of copper at Balkhab, gold at Badakhshan, gemstones and lithium
at nuristan, and oil and gas at sheberghan.
The Ministry of Mines drew up its first business reform plan in a bid to create a
more accountable and transparent mining industry. Afghanistan joined the
Extractive Industries Transparency Initiative as a candidate country. It was
expected that after 5 years, the contribution of royalties from mineral
production to the revenues of the government would be at least $1.2 billion
per year, and that after 15 years, the contribution would increase to $3.5
billion per year. Afghanistan has no local ownership requirements and its
Constitution does not allow for nationalization.
Afghanistan's mining industry was at an ancient artisanal ‫ د پخواني صنعت‬stage of

development; the operations were all low scale and output was supplied to
local and regional markets. The government considered development of the
country's mineral resources to be a priority for economic growth, including
development of the industrial mineral resources (such as gravel, sand, and
limestone for cement) for use by the domestic construction industry.
Investment in infrastructure and transportation projects for mining was a
critical aspect of developing the mining industry.
The government completed Afghanistan's first railway with an investment of

$170 million in 2010. The 76-kilometer (km) route link Mazar-i-Sharif to the
extensive rail networks in Uzbekistan. The new route would allow Afghan
exporters to transport minerals and other goods into Europe. China
Metallurgical Group Corporation (MCC) is building a railroad to transport
copper ore in Afghanistan from Logar to Kabul.
Owing to the lack of mineral production data reported by the miners,

information about Afghanistan's mining activities was not readily available, but
they appeared to be limited in scope. Production of Barite was estimated by
the USGS to be about 2,000 metric tons; chromite, 6,000 tons; and natural gas
liquids, 45,000 barrels. In the process of reconstruction and infrastructure
development, output of construction minerals was estimated to have
increased to meet the domestic requirements. Production of cement increased
by 13% compared with that of 2009.
Privatization of Afghanistan's state-owned companies, which controlled many

of the country's mineral resources, was ongoing but not complete. Investment
in the mining sector by private domestic companies and foreign investors was
encouraged by the government, which had offered the first contract for
development of the Aynak copper project to two Chinese companies in 2007.
The government also issued the tenders for the development of the hajigak
iron ore project in 2009 and tenders for oil and gas exploration in 2010. The
Ministry of Mines is involved in the exploration for and development,
utilization, and processing of minerals and hydrocarbons. The Ministry is also
responsible for protecting the ownership and regulating the transportation and
marketing of mineral resources in accordance with the country's new laws.
Regulations to clarify the country's environmental laws were scheduled for
adoption in 2010.
History of mines in Afghanistan

The last mining boom in Afghanistan was over 2,000 years ago in the era of
Alexander the Great, when gold, silver and precious stones were routinely
mined. Geologists have known of the extent of the mineral wealth for over a
century, as a result of surveys done by the British and Russians. An American

company was offered a mining recognition over the entire country in the 1930s
but turned it down. Despite this historical knowledge, global interest was only
really boosted in 2010 when the Pentagon commissioned a report from the US
Geological Survey (USGS).
Historical mining concentrated mostly on precious stone production, with

some of the oldest known mines in the world believed to have been
established in Afghanistan. Lapis lazuli ‫الجورد‬was being mined in the
Badakhshan province of Afghanistan as early as 8000 BC. In ancient Egypt, lapis
lazuli was a favorite stone for amulets ‫ تعویذ‬and ornaments ‫زیور‬such as scarabs
and was used in Egypt's pyramids; it was also used in ancient Mesopotamia by
the Sumerians, Akkadians, Assyrians, Babylonians for seals and at Neolithic
burials in Mehrgarh.
During the height of the Indus valley civilization in about 2000 BC, the
Harappan colony now known as Shortugai was established near the lapis
mines. Lapis jewelry has been found at digs of the Presynaptic Egyptian site
Naqada (3300–3100 BC), and powdered lapis was used as eye shadow by
Cleopatra. In ancient Mesopotamia, Lapis artifacts can be found in great
abundance, with many notable examples having been excavated at the Royal
Cemetery of Ur (2600-2500 BC).
The mine of Aynak's copper has more than 2,000 years of history, from the
coins and the tools that were found there. The gold of Zarkashan has more
than 2,000 years of history in Ghazni Province.
Afghanistan's ruby/spinel ‫یاقوت‬mines were mentioned in the Arabic writings of

many early travellers, including Istakhri (951 AD), Ibn Haukal (978 AD), al-
Ta'Alibi (961–1038 AD), al-Muqaddasi (ca 10th century), al-Biruni (b. 973; d. ca
1050 AD), Teifaschi (1240 AD), and Ibn Battuta (1325–1354 AD).
The British Empire first initiated resource assessments in Afghanistan in the

early nineteenth century as they searched through pioneering exploration and
military escapades for countries to dominate as markets and trading partners.
From the time of their first geological mapping and mineral resource
assessments in Afghanistan, and on into the twentieth century, the British
maintained a comprehensive interest in resources of Afghanistan.
This was done while also improving their military intelligence on resources and
topographic detail that would be needed in the event of any unrest in the

machinations of their Great Game face-off against the Russian Empire, and as
long as they could maintain their British Raj (rule) of the Indian subcontinent. A
number of other nationalities (German, French, Russian) also looked at geology
and resources in the country from time to time but nothing much seemed to
come of their explorations.
Following the third Anglo-Afghan War in 1919, Afghanistan won its

independence from diplomatic domination by the British and it was not long
after that a Soviet publication on mineral "riches" first appeared, published by
a man who later came to be revered as an early Russian ‘father’ of geologic
studies. Nevertheless, in spite of early attempts by the government of
Afghanistan to entice Americans to become engaged in resource discovery and
extraction in the country, distance from market, economic concerns, and
looming worries about World War II caused rejection of the overtures, much to
the discomfiture of the government of Afghanistan.
In spite of a number of discoveries by the American geologist Fox (1943) and

others, post-war assessment by an American geographer concluded
shortsightedly that there were no useful resources in Afghanistan about which
there should be any diplomatic concern.
With its attention on resources accordingly diverted elsewhere for decades to

come, the US Department of State thus quite missed the resource ball when in
the 1960s and 1970s, as many as ~250 Soviet geoscientists went to work
mapping geology in the country while only one American geologist (John
Shroder) was in the country, plus a few visiting geology attachés from the US
Embassy and USGS seismic specialists who visited from time to time. The
resulting Soviet collaboration with the Afghanistan Geological Survey detailed
a wide store of mineral resources in the country.
The result of this Cold War confrontation between the United States and the
Soviet Union in Afghanistan was that the neighboring USSR was able to fairly
easily sidestep or ignore developing resources in Afghanistan until conditions
were more to its liking as it consolidated its preeminent position in the
country, ultimately leading to its attack in 1979. With its already dominant
roles in the Afghanistan Cartographic Institute, the Afghanistan Geological
Survey, and many other ministries, the USSR was in a position in the early
1980s to completely take over all resource extraction in Afghanistan.

Indeed, they did pump much natural gas across the northern border of the
Amu Darya into the USSR where the gauges ‫مقیاس‬to measure delivered volumes
were located, and plans were made for development of other resources. In
addition, the Aynak copper deposit near Kabul was investigated in detail and a
smelter scheduled for installation in the mid 1980s.
In an interesting sidelight of these times in the early 1980s, a Soviet-Afghan

convoy from Aynak was assaulted by the Mujahideen and the captured
documents that were sent to co-author Shroder by British sources proved that
the Aynak copper lode was one of the largest in the world, as proved by a
plethora of kilometer-deep boreholes that allowed the Soviets to sample the
deposit extensively.
The increasing resistance of the Afghan people and the Mujahideen, in the
final cumulative battles of the Cold War, precluded significant further
development of any resources at that time. Instead the Soviet withdrawal in
defeat occurred in 1988-89. The subsequent invasion of Afghanistan by the
United States and coalition troops in 2001 began a new phase in the history of
Afghanistan, as many old resource projects were assessed again, and new ones
were initiated.
Struggles:
Afghanistan has been occupied by foreign countries ever since minerals were
discovered. In 2001, the September terrorist attack in New York led to
Afghanistan attack by U.S NATO. According to Mark Lander and James Risen, in
2007 U.S government sent geologist to explore the mining potential in
Afghanistan. Using old Soviet maps of mining location, America created a more
precise map of mineral locations.
President Trump has agreed to extent U.S NATO contract to remain in

Afghanistan so USA could be part the Mineral extracting project. He also wants
to make sure that China is not going to extract all the rare-metals. Trumps
official say that extracting minerals generate economic boost and job
opportunities for American people.
Legal framework:
A new mining law was passed in 2006 and as of 2006 regulations were being
developed to provide the framework for more formal exploration for and

mining of minerals. The process of applying for mineral rights was also being
revised as of 2006. All minerals located on or under the surface are the
exclusive property of the Government, except for hydrocarbons and water,
which are regulated under separate laws.
The principal role of the Government with respect to minerals is to promote

the efficient development of the mineral industry by the private sector. The
Ministry of Mines and Industries is responsible for the administration and
implementation of the Mining Law. The Law provides investment security to
the holder of a mineral right. The Government cannot take mineral rights
without adequate compensation in accordance with international norms.
The Law also gives the mineral royalty rates, which range from 5% of gross
revenue for industrial minerals to up to 10% for gemstones. Other changes in
Government policy in 2006 included the legalization of the gemstone trade,
Government control of the gemstone industry, and encouragement of
investment in mining.
Mining locations
Samples of different Afghan marbles at the Doost Marble Factory in Herat,
Afghanistan. Current marble exports are estimated at $15 million per year.
With improved extraction, processing, infrastructure, and investment, the
industry has the potential to grow into a $450 million per year business.
 Badakhshan Province: Badakhshan Gold, gemstones, lapis lazuli.

 Baghlan Province: Baghlan clay and gypsum, Dudkash industrial minerals
 Balkh Province: oil.
 Bamyan Province: Hajigak Mine (iron oxide).
 Daykundi Province: tin and tungsten
 Farah Province in the west: copper, lithium;
 Ghazni Province: Dashti Nawar lithium salts; Zarkashan Mine(copper,
gold).
 Ghor Province: Karnak-Kanjar mercury, Nalbandon lead and zinc
 Helmand Province: Khanneshin carbonatite, gold, rare-earth elements,
possible uranium reserves; Chagai Hills travertine, copper and gold.
 Herat Province: Shaida Copper Mine Dusar tin, Tourmaline tin, Herat
barite and limestone
 Jowzjan Province: Oil and Gas
 Kabul Province: Jegdalek, Surobi District (gemstones).[26]
 Kandahar Province: copper,cement
 Kapisa Province: copper
 Kunduz Province: Kunduz celestite
 Logar Province: copper (Mes Aynak).
 Nangarhar Province: elbaite, Ghunday Achin magnesite and talc.
 Nimroz Province: Godzareh (Gaudi Zireh) lithium salts.
 Nuristan Province: Nuristan pegmatites and gemstones.
 Panjshir Province: Panjshir Valley gemstones e.g. emerald.
 Paktika Province: Katawaz gold and Oil
 Samangan Province: Aybak (copper); Shabashak, Dara-I-Suf District
(coking coal).
 Sar-e Pol Province: Balkhab Copper Mine (worlds largest deposit), Oil
(Kashkari, Angot, etc.).
 Takhar Province: Samti, Panj River Valley (gold), Evaporite.
 Urozgan Province: Bakhud fluorite
 Zabul Province: Kundalyan gold and copper.
Also the following places which have not, as yet, been positively located:
 Southeastern Afghanistan: copper, at the Darband, and the Jawkhar

prospects.
 Anjir, Hasar, and Nooraba Valleys: gold
Commodities
Afghanistan has abundant non-fuel mineral resources, including both known
and potential deposits of a wide variety of minerals ranging from copper, iron,
and sulfur to bauxite, lithium, and rare-earth elements.
It was announced in 2010 that about $1 trillion in untapped mineral deposits

were identified in Afghanistan, enough to fundamentally alter the Afghan
economy. According to other reports the total mineral riches of Afghanistan
may be worth over $3 trillion US dollars. "The previously unknown deposits —
including huge veins of iron, copper, cobalt, gold, and critical industrial metals
like lithium — are so big and include so many minerals that are essential to
modern industry that Afghanistan could eventually be transformed into one of
the most important mining centers in the world".
Ghazni Province may hold the world's largest lithium reserves. The deposits
were described in the USGS report on Afghanistan in 2007. Afghan President

Hamid Karzai remarked "Whereas Saudi Arabia is the oil capital of the world,
Afghanistan will be the lithium capital of the world." Afghanistan invited 200
global companies for the development of its mines.
Copper
No copper mines were active in the country in 2006. In the past, copper had
been mined from Herat Province and Farah Province in the west, Kapisa
Province in the east, Kandahar Province and Zabul Province in the south.
As of 2006, interest was focused on the Aynak, the Darband, and the Jawkhar
prospects in southeastern Afghanistan. Copper mineralization at Aynak in
Logar Province was strat abound and characterized by bornite and chalcopyrite
distributed in dolomite marble and quartz-biotite-dolomite schists of the Loy
Khwar Formation.
Although a resource of 240 million metric tons at a grade of 2.3% copper had
been reported, a number of small ore ‫معدن‬lenses were potentially not
practically and economically minable. Open pit and underground mining would
be needed to exploit the main ore body, and other infrastructure problems,
such as inadequate power and water, were also likely.
The new (2005) Mining Law might favor the development of the deposit by
using public tenders. The Government issued a public tender for the deposit in
2006, and expected the granting of concessions in February 2007. Nine mining
companies from Australia, China, India, and the United States were interested
in the prospect.
China Metallurgical Group won the bidding for a copper mining project in
Aybak, Samangan, Afghanistan. The bidding process has been criticized by rival
Canadian and United States companies alleging corruption and questioning the
Chinese company's commitment to the Afghan people.
In 2007, a 30-year lease was granted for the development of a copper mine at
Mes Aynak in Logar Province to the China Metallurgical Group for $3 billion,
making it the biggest foreign investment and private business venture in
Afghanistan's history.
It is believed to contain the second-largest reserves of copper ore in the world

and the deposits are estimated to be worth up to $88 billion. It is also the site
of one of Afghanistan's most important archaeological‫ لرغون پیژندنه‬sites and,
although there are desperate efforts being made to save as much as possible,
the main Buddhist monastery and other remains are due to be bulldozed to
make way for the mine.
Several new mineral-rich sites, with estimated deposits of about $250 billion,
had been found in six other provinces. Launched in 2006, a US Geological
Survey (USGS), jointly conducted with the Ministry of Mines, was completed
last year. The survey covers 30 percent of the country. "The survey provides
credible information on mines in 28 different parts of Afghanistan.
It showed the world's largest copper deposits existed in Balkhab district of Sar-
e-Pol. The copper mine was discovered near a river, an area which might hold
gold reserves as well. The government launched tenders in late 2011 for the
Balkhab copper deposit, which had reserves of about 45 Mt of copper.
Citing the report, an Afghan government minister said two new copper mines
in Logar Province and Herat Province provinces had been discovered. The value
of the Logar pit, not the Ainak mine, is estimated at $43 billion. Copper and
gold mines worth of $30 billion were discovered in the Zarkasho area of Ghazni
and lithium pits of $20 billion in Farah and Nimroz provinces.
A deposit of beryllium, which is lighter than aluminum and stronger than steel
used in airplanes, helicopters, ships, missiles, and space craft, has been found
in the Khanashin district of southern Helmand province. The reserves are
estimated at $88 billion.
Coal
Afghanistan has rich reserves of coking coal, coal is primarily located within a
Jurassic belt from the northern provinces of Takhar and Badakhshan through
the center of the country and towards the west in Herat, according to Afghan
mines ministry.
In 2014 however, the U.S. Department of Labor has issued a List of Goods
Produced by Child Labor or Forced Labor in which Afghanistan appeared to be
one of the 74 countries with noticeable incidence of child labor in the coal
mining field.

Gemstones
Afghanistan is known to have exploited its precious and semi-precious
gemstone deposits. These deposits include aquamarine, emerald and other
varieties of beryl, fluorite, garnet, kunzite, ruby, sapphire, lapis lazuli, topaz,
tourmaline, and varieties of quartz. Corundum deposits (sapphire and ruby) in
the country are largely exhausted, and very little gem quality material is found.
The four main gemstone-producing areas are those of Badakhshan, Jegdalek,

Nuristan, and the Panjshir Valley. Artisanal mining of gemstones in the country
used primitive methods. Some gemstones were exported illicitly, mostly to
India (which was the world's leading import market for colored gemstones and
an outlet for higher quality gems) and to the domestic neighboring Pakistan
market.
Gold
As of 2006, gold was mined from the Samti placer deposit in Takhar Province in
the north by groups of artisanal miners. Badakhshan Province also had
occurrences of placer gold deposits. The deposits were found on the western
flanks of the mountains in alluvium or sandy fan in several river valleys,
particularly in the Anjir, the Hasar, the Nooraba, and the Panj Valleys.
The Samti deposit is located in the Panj River Valley and was estimated to
contain between 20 and 25 metric tons of gold. The southern region of
Afghanistan is believed to contain large gold deposits, particularly the Helmand
Province. There is an estimated $50 billion in gold and copper deposits in
Ghazni province.
The Afghan government signed a deal with Afghan Krystal natural Resources
Co. (a local company) to invest up to $50 million in the Qara Zaghan Mine in
northern Baghlan Province. Qara Zaghan was the country’s second gold mine,
and production there was planned to begin by 2013. The mine’s gold reserves
were not yet known, but the company intended to spend the next 2 years
exploring the site. Investors from Indonesia, Turkey, the United Kingdom, and
the United States were backing the project. The first gold mine was being
developed by Westland general trading LLC of the United Arab Emirates at Nor
Aaba near the border with Tajikistan in northern Takhar Province. The mine
was expected to provide $4 million to $5 million per year in royalties to the
government.

Iron ore
The best known and largest iron oxide deposit in Afghanistan is located at
Hajigak in Bamyan Province. The deposit itself stretches over 32 km and
contains 16 separate zones, up to 5 km in length, 380 m wide and extending
550 m down dip, seven of which have been studied in detail.
The ore occurs in both primary and oxidized states. The primary ore accounts
for 80% of the deposit and consists of magnetite, pyrite and minor
chalcopyrite. The remaining 20% is oxidized and consists of three hematitic ore
types. The deposit remained unmined in 2006.
The presence of coking coal nearby at Shabashak in the Dar-l-Suf District and
large iron ore resources made the deposit viable for future development of an
Afghan steel industry. Open pit mining and blast furnace smelting operations
were envisioned by an early feasibility study. The Hajigak also includes the
unusual niobium, a soft metal used in the production of superconductors.
Lithium
Lithium is a vital metal that is mostly used in the manufacture of rechargeable
batteries for mobile phones, laptops and electric cars. It is believed that
Afghanistan has plenty of lithium. The country’s lithium deposits occur in dry
lake beds in the form of lithium chloride; they are located in the western
Province of Herat and Nimroz and in the central east Province of Ghazni.
The geologic setting is similar to those found in Bolivia and Chile. The deposits
are also found in hard rock in the form of spodumene in pegmatites in the
north-eastern Provinces of Badakhshan, Nangarhar, Nuristan, and Uruzgan. A
pegmatite in the Hindu Kush Mountains in central Afghanistan was reported to
contain 20% to 30% spodumene.
Marble
Afghanistan also has considerable amount of marble in different parts of the
country. The Doost Marble Factory in the city of Herat began operation in
recent years. According to the U.S. Embassy in Kabul, current Afghan marble
exports are estimated at $15 million per year. With improved extraction,
processing, infrastructure, and investment, the industry has the potential to
grow into a $450 million per year business.

Petroleum and natural gas
Afghanistan has 3.8 billion barrels of oil between Balkh and Jawzjan Province in
the north of the country. This is an enormous amount for a nation that only
consumes 5,000 bbl/day.
The United States Geological Survey and the Afghan Ministry of Mines and
Industry jointly assessed the oil and natural gas resources in northern
Afghanistan. The estimated mean volumes of undiscovered petroleum were
1,596 million barrels (Mbbl) of rough oil, 444 billion cubic meters of natural
gas, and 562 Mbbl of natural gas liquids. Most of the undiscovered rough oil
occurs in the Afghan-Tajik Basin and most of the undiscovered natural gas is
located in the Amu Darya Basin. These two basins within Afghanistan
encompass areas of approximately 515,000 square kilometers.
In December 2011, Afghanistan signed an oil exploration contract with China

National Petroleum Corporation (CNPC) for the development of three oil fields
along the Amu Darya River. Afghanistan will have its first oil refineries within
the next three years, after which it will receive 70 percent of the profits from
the sale of the oil and natural gas. CNPC began Afghan oil production in
October 2012, extracting 1.5 million barrels of oil annually.
Rare-earth elements
According to a September 2011 US Geological Survey estimate, the Khanashin
carbonatites in southern Helmand Province have an estimated 1 million metric
tonnes of rare-earth elements at a potentially useful concentration in the rock,
but of unknown economic value. Regina Dubey, Acting Director for the
Department of Defence Task Force for Business and Stability Operations
(TFBSO) stated that "this is just one more piece of evidence that Afghanistan's
mineral sector has a bright future."
Uranium
The Helmand Province in southern Afghanistan is believed to possess uranium
reserves, according to Afghan Ministry of Mines.

Week nine
Mes Aynak
Coordinates: 34°24′N69°22′ECoordinates:
34°24′N69°22′E
Country Afghanistan
Province Logar Province
District Mohammad Agha District
height 2,120 m (6,958 ft)
Mes Aynak (Pashto/Persian: ‫مس عینک‬, meaning "little source of copper"), also
called Mis Ainak or Mis-e-Ainak, is a site 40 km (25 mi) southeast of Kabul,
Afghanistan, located in a barren region of Logar Province. Mes Aynak contains
Afghanistan's largest copper deposit, as well as the remains of an ancient
settlement with over 400 Buddha statues, stupas and a 40 ha (100 acres)
monastery complex. It is also considered a major transit route for insurgents
coming from Pakistan. Archaeologists are only beginning to find remnants of
an older 5,000-year-old Bronze Age site beneath the Buddhist level, including
an ancient copper smelter.
The site of Mes Aynak possesses a vast complex of Buddhist monasteries,

homes, and market areas. The site contains artifacts recovered from the
Bronze Age, and some of the artifacts recovered have dated back over three
thousand years. The site's orientation on the Silk Road has yielded a mixture of
elements from China and India. The wealth of Mes Aynak’s residents has been
well represented in the site's far-reaching size and well guarded perimeter.
Afghanistan’s eagerness to unearth the copper below the site is leading to the
site's destruction rather than its preservation. Archaeologists have
photographed the site and the relics excavated.
Etymology
The word Mes Aynak (‫ )مس عینک‬literally means "little source of copper"; mis
(‫ )مس‬is "copper", while aynak (‫ )عینک‬is a diminutive form of ayn (‫)عین‬, which
means "source".
History
As the name suggests, the presence of copper at Mes Aynak has been known
about for some time, while the site's archaeological wealth has been known
about since exploration by Russian and Afghan geologists in 1973-4. The
earliest Buddhist remains date from the Kushan era, although these gradually
gave way to T'ang Chinese and Uyghur influences. Mes Aynak was at the peak
of its prosperity between the fifth and seventh century AD. A period of slow
decline began in the eighth century, and the settlement was finally abandoned
200 years later.
Mining contract
In November 2007, a 30-year lease was granted for the copper mine to the
China Metallurgical Group (MCC) for US$3 billion, making it the biggest foreign
investment and private business venture in Afghanistan’s history. Allegations
have persisted that the then-minister of mines obstructed the contracting
process and accepted a large bribe to eliminate the other companies involved
in the bid.
The Afghan Mining Ministry estimates that the mine holds some six million
tons of copper (5.52 million metric tons). The mine is expected to be worth
tens of billions of dollars, and to generate jobs and economic activity for the
country, but threatens the site's archaeological remains. The site is accessed
via a 15 kilometers (9.3 mi) motorable track from the surfaced road between
Kabul and Gardez. The mining lease holders propose to build a railway to serve
the copper mine.
As of July 2012, MCC has not developed an environmental impact plan, and has
remained secretive about feasibility studies, and the plan regarding the
opening and closing of the mine, as well as any guarantees contained in the
contract. International experts have warned that the project, and other similar
projects in Afghanistan, could be threatened because MCC has not fulfilled
promises made to the Afghan government, such as the lack of provision of
proper housing for relocated villagers. Other investments that have yet to be
fulfilled include a railway, a 400-megawatt power plant and a coal mine. A
report by Global Witness, an independent advocacy group that focuses on
natural resource exploitation, said there was a "major gap" between the
government's promises of transparency and its follow-through.

Rescue excavations
Between May 2010 and July 2011 archaeologists excavated approximately 400
items; more than what the National Museum of Afghanistan housed before the
war. The site covers roughly 400,000 square metres (4,300,000 sq ft),
encompassing several separate monasteries and a commercial area. It appears
that Buddhists who began settling the area almost two millennia ago were
drawn by the availability of copper.
More recently, a stone statue, or stele, found in 2010 has been identified as a
depiction of Prince Siddhartha before he founded Buddhism and has been
taken to support the idea that there was an ancient monastic cult dedicated to
Siddhartha's pre-enlightenment life.
In June 2012, a conference of experts in the fields of geology, mining

engineering, archaeology, history and economic development met at SAIS in
Washington, D.C to assess the situation in Mes Aynak. The provisional findings
were tentatively encouraging: because of the length of time before mining can
actually start at the site (approximately five years), it is indeed possible for
collaboration between archaeologists and mining engineers to work to save
Mes Aynak's cultural treasures. The site could either become a positive model
for mineral extraction working to preserve cultural heritage or become an
irreparable failure. However, a number of measures, that are not currently in
place, must be met first. The site is still scheduled for destruction in January
2013.
Excavators at Mes Aynak have been denounced as "promoting Buddhism" and

threatened by the Taliban and many of the Afghan excavators who are working
for purely financial reasons don't feel any connection to the Buddhist artifacts.
Recent developments
The U.S. Embassy in Kabul has provided a million dollars of U.S. military
funding to help save the Buddhist ruins. As of June 2013 there is an
international team of 67 archaeologists on site, including French, English,
Afghans and Tajiks. There are also approximately 550 local labourers, which
are set to increase to 650 in the summer. When this occurs Mes Aynak will
become "the largest rescue dig anywhere in the world". All these personnel are
protected by 200 armed guards. The teams are using ground-penetrating

radar, georectified photography and aerial 3D images to produce a
comprehensive digital map of the ruins.
The rescue work was continuing as of June 2014, in spite of difficulties. There
were only 10 international experts working at the site, and fewer than 20
Afghan archaeologists from Kabul’s Institute of Archaeology. A team of seven
Tajik archaeologists was also helping. Marek Lemiesz, a senior archaeologist at
the site, said that more help was needed. Security was also a concern.
There were also indications that mining plans were being delayed because of
the declining copper prices.
Contract impact
Production in Ainak was supposed to start within five years of the contract
being signed, but that moment passed more than two years ago. There are
also no signs of the planned 400 Megawatt power station needed to run the
copper smelter and a local industrial park, nor of the railway line (it has only
been surveyed).
Only a few of the 3,500 to 4,000 jobs foreseen in the mine for local Afghans
have been created so far. By 31 March 2012, only about 260 Afghans were
employed on full-time contracts. An AAN colleague who has visited the area
repeatedly also reported that local residents of villages who have been
forcefully resettled have been compensated only in part and that the
necessary infrastructure is lacking for those who have agreed to settled
elsewhere.
Security and other delays

One reason for delay that cannot be laid on the Chinese side is the insecure
security situation in the area. Around the mine, and along the planned tracks
for a railway that is supposed to transport the ore abroad, there are still
landmines from the 30 years of war, as well as increased insurgent activity.
In the year the contract was signed, the US defense ministry ranked Logar,
where Ainak is situated, amongst the eight most insecure provinces in the
country. A local tribal elder told AAN in 2012 that 80 per cent of the province
was controlled by the. They attacked the camp with the Chinese engineers’
advance team in 2008 for the first time. A team of deminers was attacked in

the area for the first time in June 2012. The Chinese engineers and technicians
temporarily left their police-protected container camp after repeated rocket
attacks and a Taleban ambush which killed 15 Afghan policemen.
This is somewhat a repetition of history since the Soviets, during their time of
occupation of Afghanistan in the 1980s, had tried to develop the Ainak copper
deposit that they had explored first in 1974–76 and again in 1978–79. But they
saw themselves unable to develop it due to the strong mujahedin activity in
the area. The district of Chahrasyab, halfway between the mine and the capital
Kabul, was then the headquarters of Hekmatyar’s Hezb-e Islami, the strongest
mujahedin organisation at that time.
In the summer of 2013, Beijing intervened directly with President Karzai and
demanded he strengthen security measures further in Ainak. As a result, the
provincial government established 20 more police posts in the area – in
addition to the already existing 1,700 Afghan Local Police and army soldiers.
Reportedly, the Chinese consortium also has its own security service. (3)
The situation deteriorated further. On 27 September 2014, Taleban fighters

attacked a clinic in Ainak’s district centre Muhammad Agha in broad daylight
and killed one patient and two staff members, as AAN heard when visiting the
area. A few days earlier, Taleban had abducted two young men from a local
mosque during evening prayer and executed them as alleged government
spies. Muhammed Agha is situated along a route the insurgents use when they
move from their safe havens in Kurram Agency in Pakistan on their way to
Kabul. Several villages which AAN had been able to visit in 2013 were not
accessible one year later because of the Taleban activity.
Ainak’s economic importance

Saba’s statement regarding one of the key projects deemed essential for
generating revenues for Afghanistan’s economy, while the country is
chronically dependent on external resources, is quite different in tone from
how President Ghani has previously related to the Ainak project. Ghani, while
visiting the mine area in March this year, called it “an important economic
resource for the country.” In his speech before the US Congress in March 2015,
he had reiterated that he aspires for Afghanistan to be “self-reliant” by the end
of the 10-year “transformation period” in 2024.

According to the presidential website, Ghani seemed to put the main
responsibility for solving the issues of the delays in Ainak on the Afghan side,
saying that “the friendly country of China who has won the contract is
concerned about security of the mine” and that, in order “to start the mine’s
extraction at the soonest time possible, it is necessary for Afghan security
forces to ensure protection of this key mine.”
Together with the iron mine of Hajigak, the Ainak copper deposit is one of two
major mining projects that are supposed to generate domestic revenues from
Afghanistan’s immense mineral resources. These resources have been
estimated by the US government’s Geological Survey (USGS) in 2010 at a value
of 908 billion US dollars.
They include not only copper of copper and iron but also coal (also in Hajigak,
among other places), oil, gas, gold, cobalt, chromium and so-called ‘rare earth’
metals like lithium. (The Karzai government’s mining minister Wahidullah
Shahrani, during one of his marketing tours abroad, finding the USGS’s
estimates too “conservative”, singlehandedly tripled the estimate to three
billion USD worth of minerals.)
From Ainak and its estimated 6 to 13 million metric tonnes of mineable copper
with an estimated value of up to 43 billion US dollars, according to the Afghan
mining ministry, the Afghan government had hoped to gain revenues of 300 to
400 million US dollars annually once the mine reached top output.
The Chinese consortium had agreed to three up-front payments of together

808 million US dollars to the Afghan government (80.8 million upon award of
the contract; 161.6 million when the feasibility study was approved – these
have already been paid – and 565.6 million when commercial copper
production starts and promised 2.9 billion US dollars of investment, including
funds for a railway line that is supposed to link Ainak – via the Khaibar Pass – to
what is called a “new silk road” of roads, railways and pipelines with the
markets of the region and the wider. The World Bank estimated that the mine
could generate an annual revenue of 250 million dollars and create more than
70,000 jobs in supply and services and 5,000 directly at the mine.
Afghanistan needs revenues from Ainak urgently. The country still belongs to
the category of the Least Developed Countries (LLDC) despite an average
annual economic growth of nine per cent between 2002 and 2012 and a climb
on the UN Human Development Index from 192 (third last) to 169 (2013). It

remains overly dependent on external financial resources. In 2010, the World
Bank estimated that foreign aid constituted 97 percent of the Afghan GDP.
Growth stopped and the economy started to deflate during the withdrawal of
western combat troops. The large contracts handed out by the western
militaries on services from security provision, to construction, and logistics
have ended. The overall volumes of aid have slumped – mainly due to the main
donor US halving its contributions twice, from 4.5 to 1.8 billion dollars between
2010 and 2012. Also, countries like Australia, Denmark and the Netherlands
have cut their Afghanistan budgets. The ‘growth’ rate slumped to 3.4 per cent
in 2013, and with only 1.5 per cent (according to the International Monetary
Fund; the World Bank has 2.0 per cent) in 2014 sunk below the population
growth rate, which amounts to a decline.
As a result, domestic revenues have dropped. The 2014 target for their
collection has not been met. According to the finance ministry, of the 132
billion Afghanis envisaged, only 109 billion were collected. This represents a
shortfall of eight percent. The World Bank, in its economic update on
Afghanistan for the third quarter 2014, talked of a “sluggish revenue
performance,” indirectly indicating that the problem is in the system and is
caused not so much by the political and security situation.
After a further drop over the first three months of this fiscal year when the
Ministry of Finance reported that revenue collection was still lagging behind its
original projections by seven percent (2 billion Afghani, around 34.5 million US
dollars), the minister, Eklil Hakimi, claimed in parliament in early June that the
trend has been reversed: “Our domestic revenues have increased by five per
cent in the first month of the current financial year”. This would mean that
revenue collection must have been improved drastically in April and May,
making good also on the drops between January and March.
however, the government has faced insolvency several times. Parts of the
public sector remained without pay over months. The same was true for many
units of the 30,000-strong Afghan Local Police. This has undermined its resolve
to fight the Taleban and induced some to sell their weapons to the Taleban or
even to change sides. Only emergency transfers from some western donors
kept the regular armed forces at least paid and most of them loyal to the
government.

The long-winded counting process after the April 2014 election and the
cabinet-building process paralysed the government for a full year and has
further undermined trust in the country’s stability. This, too, exacerbated the
negative economic trend. Businessmen brought out their money to the Gulf or
Turkey, and figures of those migrating to Europe climbed up again.
According to the latest World Bank economic update, from April 2015, the
Afghan government was “still grappling with containing a fiscal crisis,” while
the “growth outlook for 2015 remains weak.” Meanwhile, the Afghan
government had based its economic programme over the 2014-24 “decade of
transformation” on the optimistic assumption that revenues would increase by
25 per cent from 2014 onwards.
Week ten
Communications in Afghanistan
Communications in Afghanistan is under the control of the Ministry of
Communications and Information Technology (MCIT). It has rapidly expanded
after the Karzai administration took over in late 2001, and has embarked on
wireless companies, internet, radio stations and television channels.
The Afghan government signed a $64.5 billion agreement in 2006 with China's
ZTE on the establishment of a countrywide optical fiber cable network. The
project began to improve telephone, internet, television and radio broadcast
services throughout Afghanistan. About 90% of the country's population had
access to communication services in 2014.
Afghanistan uses its own space satellite called Afghansat 1. There are about 18
million mobile phone users in the country. Telecom companies include Afghan
Telecom, Afghan Wireless, Etisalat, MTN, Roshan, and a few others. Over 50%
of the population have access to the internet.
Telephone
There are about 32 million GSM mobile phone subscribers in Afghanistan as of
2016, with over 114,192 fixed-telephone-lines and over 264,000CDMA
subscribers. Mobile communications have improved because of the
introduction of wireless carriers into this developing country. The first was
Afghan Wireless, which is US based that was founded by Ehsan Bayat. The

second was Roshan, which began providing services to all major cities within
Afghanistan. There are also a number of VSAT stations in major cities such as
Kabul, Kandahar, Herat, Mazari Sharif, and Jalalabad, providing international
and domestic voice/data connectivity. The international calling code for
Afghanistan is +93. The following is a partial list of mobile phone companies in
the country:
 Afghan Telecom
 Afghan Wireless, provides 4G services
 Etisalat, provides 4G services
 MTN Group
 Roshan, provides 4G services
 Salaam Network
 Wasel Telecom
All the companies providing communication services are obligated to deliver

2.5% of their income to the communication development fund annually.
According to the Ministry of Communication and Information Technology there
are 4760 active towers throughout the country which covers 85% of the
population. The Ministry of Communication and Information Technology plans
to expand its services in remote parts of the country where the remaining 15%
of the population will be covered with the installation of 700 new towers.
Internet
Afghanistan was given legal control of the ".af" domain in 2003, and the
Afghanistan Network Information Center (AFGNIC) was established to
administer domain names. As of 2016, there are at least 55 internet service
providers (ISPs) in the country. Internet in Afghanistan is also at the peak with
over 5 million users as of 2016.
According to the Ministry of Communications, the following are some of the

different ISPs operating in Afghanistan:
 TiiTACS Internet Services

 AfSat
 Afghan Telecom
 Neda
 CeReTechs
 Insta Telecom

 Global Services (P) Limited
 Rana Technologies
 Global Entourage Services
 LiwalNet
Television
There are over 106 television operators in Afghanistan and 320 television
transmitters, many of which are based Kabul, while others are broadcast from
other provinces. Selected foreign channels are also shown to the public in
Afghanistan, but with the use of the internet, over 3,500 international TV
channels may be accessed in Afghanistan.
Radio
There are an estimated 150 FM radio operators throughout the country.
Broadcasts are in Dari, Pashto, English, Uzbeki and a number of other
languages.
Radio listeners are generally decreasing and are being slowly outnumbered by
television. Of Afghanistan's 6 main cities, Kandahar and Khost have the
maximum number of radio listeners. Kabul and Jalalabad have moderate
number of listeners. However, Mazar-e-Sharif and especially Herat have very
few radio listeners.
Postal service
In 1870, a central post office was established at Bala Hissar in Kabul and a post
office in the capital of each province. The service was slowly being expanded
over the years as more postal offices were established in each large city by
1918. Afghanistan became a member of the Universal Postal Union in 1928,
and the postal administration elevated to the Ministry of Communication in
1934. Civil war caused a disruption in issuing official stamps during the 1980s-
90s war but in 1999 postal service was operating again. Postal services to/from
Kabul worked remarkably well all throughout the war years. Postal services
to/from Herat resumed in 1997. The Afghan government has reported to the
UPU several times about illegal stamps being issued and sold in 2003 and 2007.
Afghanistan Post has been reorganizing the postal service in 2000s with
assistance from Pakistan Post. The Afghanistan Postal commission was formed

to prepare a written policy for the development of the postal sector, which will
form the basis of a new postal services law governing licensing of postal
services providers. The project was expected to finish by 2008.
Satellite ‫مصنوعي سپوږمکۍ‬

In January 2014 the Afghan Ministry of Communications and Information
Technology signed an agreement with Eutelsat for the use of satellite
resources to enhance deployment of Afghanistan's national broadcasting and
telecommunications infrastructure as well as its international connectivity.
Afghansat 1 was officially launched in May 2014, with expected service for at
least seven years in Afghanistan. The Afghan government plans to launch
Afghansat 2 after the lease of Afghansat 1 ends.
Afghanistan - Telecoms, Mobile and Broadband - Statistics and

Analyses
Afghanistan continues to be confronted by the challenges. The political and
civil stability of the country is a dark cloud hanging over the country; and is a
particular threat to the effectiveness of the telecommunications network and
the viability of the telecommunications sector.
By 2017 despite the positive signs of a civil society taking shape, the country
was still suffering from the ongoing conflict and multiple difficulties in
administering the nation. After many years of war and civil strife, an
encouraging aspect of the country’s efforts to rebuild has been the
considerable success evident in the creating of a functional
telecommunications sector virtually from nothing.
Internet penetration in Afghanistan remains very low although has increased

significantly over the past five years, increasing from 3% in 2011 to 13% in
2016. Penetration is predicted to increase to over 15% by 2018. Fixed
broadband penetration remains very low in Afghanistan at less than 0.1%
Afghanistan has a highly competitive mobile market that continues to flourish

despite the background of the ongoing conflict throughout the country. The
mobile sector has been boosted by the absence of effective fixed-line
alternatives. There are five mobile operators competing in Afghanistan’s
telecom sector. Between them they claimed a total of more than 25 million
subscribers, with an overall mobile penetration of 80% The market is predicted

to grow moderately over the next five years to 2021 increasing to reach
penetration of between 86% and 95%.
By 2017, there were over two million 3G mobile broadband subscribers in the
country. In mid-2016 the MCIT reduced the cost of international bandwidth by
20%, in a move to lay the groundwork for the introduction of 4G services in the
future.
Key developments:
 ATRA urged mobile providers to introduce biometric verification for SIM
registration as soon as possible.
 Speed Cast partnered with local mobile operator Wasel to roll out
connectivity to 200 of the country’s most remote villages
 ATRA enlisted local ISP Ariana Network Services (ANS) to provide
broadband connectivity to 16 universities nationwide.
 Fixed broadband penetration remains very low in Afghanistan.
Companies mentioned in this report:

Afghan Telecom/Aftel/Salam Telecom/Networks, Afghan Wireless
Communications Company/AWCC, Roshan/ Telecom Development Company
Afghanistan Ltd (TDCA), Etisalat Afghanistan, MTN Afghanistan, Wasel
Telecom, Ericsson, ZTE.
Week 11
Balance of trade
The balance of trade, commercial balance, or net exports (sometimes
symbolized as NX), is the difference between the monetary value of a nation's
exports and imports over a certain period. Sometimes a distinction is made
between a balance of trade for goods versus one for services.
If a country exports a greater value than it imports, it is called a trade surplus,

positive balance, or a "favorable balance", and conversely, if a country imports
a greater value than it exports, it is called a trade deficit, negative balance,
"unfavorable balance", or, informally, a "trade gap". As of 2016 Afghanistan
had a negative trade balance of $3.29B in net imports. As compared to their

trade balance in 1995 when they still had a negative trade balance of $196M in
net imports.
Afghanistan Balance of Trade 2003-2018

Afghanistan recorded a trade deficit of 7151 USD Million in 2016. Balance of
Trade in Afghanistan averaged -4318.48 USD Million from 2003 until 2016,
reaching an all-time high of -1660.92 USD Million in 2005 and a record low of -
8654 USD Million in 2013.
Afghanistan Trade Last Previous Highest Lowest Unit
Balance of Trade -7151.00 -7159.00 -1660.92 -8654.00 USD Million
Exports 571.41 570.50 571.41 69.10 USD Million
Imports 7722.80 7729.00 9069.00 1966.07 USD Million
Current Account -595.20 -1097.09 -595.20 -7558.00 USD Million
Current Account to GDP -20.00 -22.00 -20.00 -75.20 percent
Gold Reserves 21.87 21.87 21.87 21.87 Tonnes
Terrorism Index 9.44 9.44 9.44 5.70

Afghanistan exports 2001-2016
Afghanistan is the 104th largest export economy in the world. In 2016,
Afghanistan exported $482M and imported $3.77B, resulting in a negative
trade balance of $3.29B.
The top exports of Afghanistan are Grapes ($96.4M), Vegetable Saps ($85.9M),
Other Nuts ($55.9M), Knotted Carpets ($39M) and Tropical Fruits ($33.9M),
using the 1992 revision of the HS (Harmonized System) classification. Its top
imports are Wheat Flours ($664M), Peat ($598M), Ornamental Trimmings
($334M), Inedible Fats and Oils ($316M) and Petroleum Gas ($296M).
The top export destinations of Afghanistan are India ($220M), Pakistan

($199M), Iran ($15.1M), Iraq ($10.1M) and Turkey ($9.1M). The top import
origins are the United Arab Emirates ($1.6B), Pakistan ($1.37B), the United
States ($912M), Kazakhstan ($486M) and India ($472M).
Afghanistan borders China, Iran, Pakistan, Tajikistan, Turkmenistan and

Uzbekistan by land and Afghanistan by sea.
Exports in 2016
In 2016 Afghanistan exported $482M, making it the 104th largest exporter in
the world. During the last five years the exports of Afghanistan have decreased
at an annualized rate of -15.486%, from $531M in 2011 to $482M in 2016. The
most recent exports are led by Grapes which represent 20% of the total
exports of Afghanistan, followed by Vegetable Saps, which account for 17.8%.
8.1% Knotted Carpets, 4.5% Tomatoes Dried Legumes, 12% Other Nuts 7.0%
Tropical Fruits ,20% Grapes, 1.5% Pitted Fruits ,5.1% Spice Seeds Spices ,6.8%
Sorghum ,3.8% Linseed ,4.2% Other Oily Seeds, 1.7% Sowing Seeds, 2.7%
Forage Crops, 18% Vegetable Saps ,1.1% Marble,...Total: $483M
Afghanistan’s Imports from 2001-2016

In 2016 Afghanistan imported $3.77B, making it the 93rd largest importer in
the world. During the last five years the imports of Afghanistan have decreased
at an annualized rate of -51.126%, from $12.5B in 2011 to $3.77B in 2016. The
most recent imports are led by Wheat Flours which represent 17.6% of the
total imports of Afghanistan, followed by Peat, which account for 15.9%.

1.7%Shaped Paper 8.9%, Decorative Leather, 3.7% Curbstones Iron Blocks
Aluminum Pipe, Pad locks 6.1% Stone Processing Machines1.7% Vehicle, 1.0%
Eggs Dried Legumes, 2.4%Tea,18% Wheat Flours, 8.4% Inedible Fats and Oils,
1.6% Raw Sugar, 4.2% Chocolate Rolled Tobacco, 16% Peat, 2.6% Coke, 7.9%
Petroleum Gas, 1.4% Industrial Fatty Acids, Oils and 1.9%Used Rubber Tires
Total: $3.77BS2
Afghanistan trade destinations

Export destinations
The top export destinations of Afghanistan are India ($220M), Pakistan

($199M), Iran ($15.1M), Iraq ($10.1M) and Turkey ($9.1M).
By percentage:
1.7%United Arab Emirates, 46%India, 3.1% Iran , 2.1% Iraq, 41% Pakistan, 1.9%
Turkey, Total: $483M
Import destinations of Afghanistan

The top import origins of Afghanistan are the United Arab Emirates ($1.6B),
Pakistan ($1.37B), the United States ($912M), Kazakhstan ($486M) and India
($472M).
Kenya 2.8%, United Arab 14%, China 2.0%, India 22%, Iran 1.9%, Japan 13%,
Kazakhstan, South Korea 6.7%, Malaysia 17%, Pakistan 7.7%, Turkmenistan
Turkey 3.4%, Uzbekistan 1.2% Total: $3.77B.
Ministry of commerce and industries

History & Background
Ministry of Commerce and Industries of Afghanistan is one of the major and
basic organs of the government and has ancient history. His Excellency Ghazi
Amanullah Khan after the declaration of independence in the year of (1298 H
1919), took step for pervasive reforms. Shah Amanullah made the government
of independent Afghanistan basis on the constitution and the bylaw of
organizational structure, and thus for the first time fundamental organization

of Afghanistan was conducted base on the law and regulations that was
published on (15 Jawza 1302 h).
After the declaration of independence from the Shah Amanullah, bylaw of
Execution was created and in the primary reign and government of that period
Sardar Ab. Qudos was nominated as the prime minister and Ghulam Moh.
Khan Wardak was avowed as the minister of Commerce.
Ministry of Commerce between the years of (1317 to 1337 H) was called
ministry of national Economy And on the basis of organizational structures of
past years was part of Commerce, agriculture, Industries and Customs of
administrative affairs, and in the year of (1316 H) base on the development of
economic affairs General Management offices promoted to presidencies.
Certain new offices e.g. authority of hand crafts, machine crafts, transport
authority, in the presidency of Industries and authorities of independent tariff,
authority of Law management, authority of domestic markets, statistics of
domestic and foreign authority, delicacy and observations authority in the
presidency of trade was view pointed and in the year of 1317 in the presidency
of trade authority of Exports and Imports were established.
After remission of the years mentioned administration disjoined from the
ministry of national economy and started to activation as new units, and then
promoted into independent ministries.
In the year of 1318 office of trade related in India and Deputation of Trade of
Afghani inaugurated in Peshawar. And in the late of 1328 to 1329 in
organizational structure of ministry of national economy got some changes,
some presidencies were created and some wasted and their affairs were given
to the other offices.
But base on the needs of daily improvements, some other corporations and
professional ministries created, a number of offices were disjoined from the
ministry of national economy and promoted into independent corporations
and administrations, and at last in the year of (1335 H Aqrab month) again
called ministry of Commerce in the organizational structure of the
government, and after the mentioned date with having various organizational
structures and is doing different implementation of Trade stirs and activities.

In current situation Afghanistan government must be committed to “free
economy market” and advocacy of private sector as effective way for the
welfare and serendipity of Afghanistan.
Economy of Afghanistan has stably improved and this improvement exists as
unequal and affected Afghans specially who lives in the rural areas. Majority of
the people are not believing on the welfares of free market, especially when
they face to the increase of rapid rates of primary needs e.g. petroleum and
wheat.
It’s needed that the people of Afghanistan must know about the benefits of
free economy market and have to be persuaded toward this issue,
opportunities of economic growth, and the country which the private sector is
the key of its economic movement, cognize and take the advantages of it.
This issue inclusive with a commitment with a move of growth in small and big
interventions, current or prevalent Industries, noncurrent industries, and also
increase of rivalry for the believing of private sector is beneficial for all. To
achieve these goals Ministry of commerce and Industries is the only and
unique key.
This ministry has passed long destinations for its capacity buildings to play its
new role actively and straightforward, in the mentioned ministry, one separate
(presidency of Human Resource) established and started to a complete
program of administration reform through collation of (Rutub and Ma’ash
system), in addition ministry of commerce and Industries had improvements in
many fields as, basic and major fields, Policy configurations, easiness and
adjustment of Trade affairs.
Vision & Mission

The vision and mission statements for MOCI reflect the aims of the Afghan
constitution and ANDS, as follows:
Vision: “A socially responsible market economy in Afghanistan, in which
sustainable and equitable growth is private sector led and leads to increased
employment, higher living standards and the reduction of poverty, in which
competition operates for the benefit of all.”

Mission: “To encourage growth through the development of appropriate
policies and regulations, and the facilitation of private sector production and
trade.”
Summary of Strategic Objectives

As the main thrust of the Strategic Plan, the Ministry has identified the
following Strategic Objectives for developing the Afghan Economy:
1. Improve the Enabling and Regulatory Environment for Business and
Afghanistan’s DBI Ranking;
2. Improve International Competitiveness and Trade;
3. Industrialize Afghanistan through Increased Exports and Import Substitution;
4. Ensure the Private Sector Operates Fairly and Equitably;
5. Ensure Pro-Poor Growth; and
6. Promote the Market Economy and Increase Understanding of How it
operates. The Ministry has identified a seventh supporting strategic objective:
7. Ensure that MOCI has the Capacity to deliver on its Role
Ministry of commerce and Industries of Afghanistan as a facilitator
administration, ministry efforts to make queue and row of the related offices
e.g. Donors, non-government organizations, Trade unions, investors, foreigner
trade shareholders, and further offices which can assist interventions.
This role of the ministry also included with the direct activities of interventions
in order to realize the difficulties and obstacles which is laid in our path in the
current and future through the creation and persuading of communion of
government and private sector, also suitable rules and regulations must be
collocated and prepared in order to be used and completely applied the
existence resources for better movement.
There is a long distance laid in our path to be a prosperous facilitator for
growth and improvement of private sector.
In the trade arena, ministry needs to improve the application of agreements of
trade and transit of Afghanistan-Pakistan and also secure the relation with
world trade organization (WTO) and the endorsing and implementation of
agreements with the key shareholders of Middle East.
In many places, ministry of Commerce and Industries outlined and prepared a
sound policy of rivalry, policy of supporting customers and an administration
guidance for guide and support from the activities inside the ministry. Added
to this, ministry also started a process of scrutiny of its policy on Industrial
Parks as the first step towards reforming of the mentioned theme.
Rules and regulations of Afghanistan as situated in a manner of well
development, despite Afghanistan has been surveyed 25ft country from 183
countries by World Bank for establishing of an intervention, located, and now
ministry is about applying the program of licensing reform to create a
perspicuous, correlate, and comprehensive licensing system.
Ministry created an authority of conduction of petroleum and natural Gas
affairs for the improvement of administration, regulations, and activity of craft
of petroleum and natural Gas inside Afghanistan and by doing such rates has
been decreased and that the retail prices are proper.
Afghanistan chamber of commerce and industries

Established in 1931, Afghanistan Chamber of Commerce & Industries (ACCI or
“Chamber”) is an independent organization that is serving the advocacy and
business facilitation needs for a burgeoning private sector economy. Currently,
the Chamber represents over 90 % of the total Afghan work force.
Today, ACCI is uniquely positioned to influence the pace of economic growth

and reform. Strategically nestled at the nexus of public, investor, donor,
academia, media, and foreign channels, the Chamber is facilitating the
interests of the Afghan private sector to a diverse audience.
Through its business advocacy, the Chamber is seeking a balance between

regulation and revenue. As a vehicle for promoting trade and investment, it is
opening new markets for Afghan products, matching potential buyers with
potential sellers, and advancing the investment narrative of the nation. From
access to networks of global partners, the Chamber is acquiring valuable
market information and international lobbying services on behalf of the Afghan
business community.
Chamber Law, 2009, established the framework for a unitary chamber

structure with a head office in Kabul and branch chambers in the provinces.
This is a common-sense approach to growing organizational competencies,

allowing fledgling provincial chambers to leverage the expertise and access of
their recognized national counterpart for promulgating common interests.
Vision and Mission:
The vision of ACCI is to be the leading voice of a dynamic, competitive, and

rapidly growing Afghan private sector.
ACCI seeks to accomplish this mission by providing leadership and services to

foster an enabling private sector environment that generates employment and
creates wealth for local and international businesses.
Strategic Objectives:
In order to achieve its vision and implement its mission, ACCI has adopted four
strategic objectives in the next five years.
 Consolidate ACCI as the premier voice of business and economic
development in Afghanistan;
 Win the confidence, support and participation of businesses in every
sector of the economy and represent their interests in a reliable and
sustainable manner, in accordance with their membership category;
 Attain a level of influence to shape the enabling environment for doing
business in Afghanistan, across its borders, and to nurture public and
private strategic partnerships in the interest of economic growth and
employment creation; and
 Enhance and sustain organizational, managerial, technical, and financial
capacity of the chamber system by establishing clear roles and functions
in its structure and operation at national, regional and provincial levels.
Organization Profile
ACCI is headquartered in Kabul and operates branch chambers in 21

provinces. Its current membership exceeds 37,000 private sector organizations
which include 25 major business associations who represent a vast majority of
the total Afghan workforce.
At the helm of ACCI is an elected governing board who supervise the strategic
direction of the organization and is responsible for approving administrative
policy issues. A Chief Executive Officer is the primary interface between ACCI
headquarters and the governing board. Additionally, 20 sector study

committees advise the ACCI Board of Directors on issues specific to a given
sector. Operationally, there are 9 functional departments at ACCI, overseen by
a Chief Operations Officer. Provincial chambers are governed by their
respective boards and operated by senior managers and a team of clerical
staff.
International affiliate offices of ACCI have been opened in the USA,

Netherlands, UAE, Canada, UK, Russia, Turkey and Kazakhstan. The chamber
has also signed Memorandum of Understanding with Iran, Pakistan and China
for joint chambers to promote trade and strengthen the economic relationship
between these countries.
Our Role in Growing the Economy a key to Afghanistan’s transition to

economic self-dependence is premised on public-private policy initiatives that
stimulate domestic production and encourage foreign direct investment. The
Chamber uses its considerable reach to influence inclusive, pro-growth, and
pro-business policies.
During our regular meetings with the Presidency and Cabinet, the Chamber
and influential members of the business community, express concerns and
articulate solutions to domestic economic policy
Our direct and regular interaction with investors and international trade
officials remain the most important conduit for conveying policy solutions and
incentives to encourage the investment community
In the complex world of cross-border trading cooperatives, ACCI has

established its credentials by:
 Providing trade documentation services, a function commonly

associated with chambers
 Pursuing market penetration strategies ahead of full implementation of
trade agreements
By our actions, ACCI is proving that the private sector is taking the initiative to
address challenges facing the Afghan economy while advocating for open
markets and rule-based trade and investment.

Private Sector Challenges
A gradual switch to a less subsidized market economy requires the private

sector to lead growth in output, productivity, reinvestment, education,
employment, and innovation. Accordingly, it will need to,
 Apply innovations in marketing and modern management practices to
compete for market share in a discriminating global consumer economy
 Forsake near-term gains for long-term profitability by reinvesting in
capital assets to raise production and productivity levels
 Prioritize the development of its human capital by building a new
generation of Afghan knowledge workers and systems inextricably linked
to the global information economy
Recognizing these challenges, ACCI is working with the government, private

sector, and international partners to fashion effective responses to these
issues. We understand the scale of the enterprise, the time it will take, and the
resources needed to affect the country’s ambition for economic self-
reliance.
Ultimately, replacing the development mindset with a focus on unbridled

Afghan entrepreneurship, replete with its dynamism, astuteness, and self-
motivated incentives, remains our collective vision
Week 12
An overview of the National budget
What is budget?
A budget is a financial plan for a defined period of time, usually a year. It may
also include planned sales volumes and revenues, resource quantities, costs
and expenses, assets, liabilities and cash flows. Companies, governments,
families and other organizations use it to express strategic plans of activities or
events in measurable terms.
A budget is the sum of money allocated for a particular purpose and the
summary of intended expenditures along with proposals for how to meet
them. It may include a budget surplus, providing money for use at a future
time, or a deficit in which expenses exceed income.

Origin
A budget (derived from old French word bougette, purse) is a quantified
financial plan for a forthcoming accounting period.
A budget is an important concept in microeconomics, which uses a budget line

to illustrate the trade-offs between two or more goods. In other terms, a
budget is an organizational plan stated in monetary terms.
Purpose
A budget helps in planning actual operations by forcing managers to consider
how the conditions might change and what steps should be taken now, and by
encouraging managers to consider problems before they arise. It also helps to
co-ordinate the activities of the organization by compelling managers to
examine relationships between their own operation and those of other
departments. Other essentials of budget include:
 To control resources
 To communicate plans to various responsibility center managers
 To motivate managers to strive to achieve budget goals
 To evaluate the performance of managers
 To provide visibility into the company's performance
 For accountability
In summary, the purpose of budgeting tools:
1. Tools provide a forecast of revenues and expenditures, that is, construct

a model of how a business might perform financially if certain strategies,
events and plans are carried out.
2. Tools enable the actual financial operation of the business to be
measured against the forecast.
3. Lastly, tools establish the cost constraint for a project, program, or
operation.
Afghanistan national budget

Afghanistan has two parallel budgets: a core budget comprised of all domestic
revenue and the portion of donor financing managed by GlRoA. And an
external budget, disbursed directly by donors. Overall, nearly two-thirds of the

international aid that flows into Afghanistan does so off budget, according to
the Afghanistan Reconstruction Trust Fund (ARTF). According to GIRoA, donors
cover 100% of Afghanistan ’5 development budget and 35% of operating
expenses. Foreign Assistance accounted for 43% of Afghanistan '5 GDP in 2008.
The Afghan budget cycle follows the solar year (SY), which begins on 21 March
of the Gregorian calendar. The current budget, for SY 1388, runs through 20
March 2010. The SY 1389 budget has not yet been presented to parliament.
Assessment is that it may be passed in April.
Core Budget
The core budget consists of an operating budget, covering current expenditure,
and a development budget detailing reconstruction costs. The Cabinet and
Parliament must approve the core budget, which is subject to public financial
management mechanisms. The Ministry of Finance (MoF) annually publishes
the Afghan national budget on a public website
(http://www.budgetmof.gov.at) in English, Pashto, and Dari. In addition, the
MoF posts mid-year reviews of the national budget (reconcilingexpenditures
With the budget ceiling), the MoF's Treasury Department execution and
disbursement reports, and end-of-the-year closing account and audit reports
on its website.
The core budget is funded by revenue collection and contributions from the
international donor community. Donor contributions are largely funneled
through the ARTF, administered by the World Bank to increase the availability
of un-tied donor money for the Afghan government. ARTF funds both
operating and development budgets, contributing $310m to wages and
operations & maintenance (0&M) expenses, and $251m to development
projects in SY1388. ARTF funds about half of the civilian wage bill for GIRoA,
and one-quarter of core development spending. The core operating budget
consists primarily of wages and salaries (approximately 500,000 people work
for the Afghan government, with 80% accounted forby staff in the security and
education sectors). Other operating budget items include 08.)", capital, and
others. In terms of operating budget execution, the line ministries (lie, the
primary budgetary units) prepare quarterly allotments (i.e., share of the
operating budget assigned) for their provincial departments. The MoF then
pays these upon approval. The security and education sectors account for 65%

of the operating budget (45% and 20% respectively). The operating budget is
usually fully spent (i.e. executed) byline ministries.
The core development budget, which accounts for about 45% of the core
budget, funds development projects. External donor assistance accounts for
more than 90% of the core development budget (the discretionary fund was
7.2% in 1387). These funds are funneled through one of the Afghan National
Development Strategy (ANDS) programs, and are thus part of the national
budgeting process. However, these funds are earmarked (by donors) on a
project basis, and therefore not subject to discretionary allocation by GIROA.
Infrastructure (26%), agriculture/rural development (20%) and security (19%)
account for the bulk of the development budget. As of 22 Sep 09, ARTF
invested 47% of its development funds in agriculture and rural development,
18% in private sector development, and 11% in energy.
Persistent low disbursement rates remain a key problem. Disbursement rates
improved from 41% of budgeted development expenditures in 2005/6 to 54%
in both 2006/7 and 2007/8 before dropping to 43% in 2008/9. Key reasons for
the low disbursement rates include a) low absorptive capacity in implementing
line ministries, b) mismatch in financial years of donors and GIROA (which
means the money does not arrive when needed), c) weak budget formulation
by implementing line ministries and d) bottlenecks in donor and GIROA
procurement.
External Budget
About half of development spending is on-budget aid, funneled through the
governmental budgeting process. The other half, referred to as the external
budget, is Spending by international donor organizations that is not routed
through the government’s budget or treasury system. Because they are
directly disbursed, rather than passing through the government’s single
treasury account (STA), these Expenditures are not under government control,
and are not captured in the government’s budget numbers. Examples of
external budget items include Provincial Reconstruction Team (PRT) and Civil-
Military Cooperation (CIMIC) efforts, as well as USAID funds, quick-impact
projects like CERF, and direct investments by donor nations. Two of the most
important funds are or the Asian Development Fund (ADF) with average
pledges of $300M per year. The 008 quick response fund (QRF) is a funding
method for PRTs using the economic Support fund. The external development
budget breakdown is similar to that of the core development budget, with
infrastructure and natural resources (45%), agriculture/rural devel0pment
(20%), and health and education (15%) accounting for the majority of
spending.
The Budget Process

1. Ministry of finance calculates available resources( how much money we
will have for the budget) Jun- oct( Jawza- Meezan) and ministries and
agencies define their priorities and make funding requests, Apr-
Oct(Sawr- Meezan)
2. Ministry of finance writes draft budget, which allocates limited funds to
requests, OCT- Dec(Aqrab- Qaws)
3. Parliament reviews budget for approves or reject, Jan-Feb (Jadi-Dalwa)
4. President officially approves budget, Feb ( Hoot)
Tax revenue
Afghanistan's Domestic Income Rises for last Third Year
Afghanistan earned 87 billion Afghanis from internal sources last year, an

increase on the previous two years.
According to Revenue Department of government's domestic income for 1391

(March 2011-March 2012) has increased in the past three years with a new
target of 127 billion Afg for domestic revenue of 1392."Last year, the was 87
billion Afghanis. The target for this year is 127 billion Afghanis, Internal or
domestic revenue includes company tax, tariffs, income tax, sales tax, and
fines.
The income increase was boosted by greater capacity for tax collection and
more education among people of tax payments, officials said.
Non-tax revenue or non-tax receipts are government revenue not generated

from taxes.

Examples
 Aid from abroad (foreign aid)

 Tribute or indemnities paid by a weaker state to a stronger one, often as
a condition of peace after suffering military defeat. The war reparations
paid by the defeated Central Powers after the First World War offer a
well-known example.
 Loans, or other borrowing, from monetary funds and/or other
governments
 Revenue from state-owned enterprises (for example, revenue from
Public Sector Unions)
 Revenues from sales of state assets.
 Rents, concessions, and royalties collected by the state when it contracts
out the right to profit from some good or service to a private
corporation. An example are contracts for resource extraction (for such
natural resources as minerals, timber, petroleum and natural gas, or
marine resources) collected privately under license from state-owned
lands
 Fines collected and assets forfeiture as a penalty. Examples include
parking fines, court costs levied on criminal offenders
 Fees for the granting or issuance of permits or licenses. Examples include
vehicle registration plate permits, vehicle registration fees, watercraft
registration fees, building fees, driver's licenses, hunting and fishing
licenses, fees for professional licensing, fees for visas or passports, fees
for demolition, rezoning, and land grading (which causes silt), and
sometimes for increasing storm water runoff, destroying native
vegetation, and cutting-down healthy trees.
 User fees collected in exchange for the use of many public services and
facilities. Tolls charged for the use of toll roads are an example
 Donations and voluntary contributions to the state.
Foreign aid to Afghanistan:

Phantom aid is aid that never reaches the intended recipient countries. It is aid
that gets looted in many ways such as tied aid and domestic refugee spending
in donor countries. One of the countries affected by phantom aid is
Afghanistan. It has received approximately $35 billion of international aid
between 2002 and 2009. However, much of this aid has not helped ease
poverty or improve economic and living conditions, as originally intended, in
the nation.
Afghanistan
Afghanistan is a low-income country with GDP per capita of US$501 in 2010.
The country currently ranks 172 in the Human Development Index (HDI). It is
heavily reliant on foreign aid and aid accounts for more than 90 percent of the
national budget. Many of the nation's sectors are currently poorly developed.
The country's infant mortality rates are high at 16.7 percent, literacy levels are
low at 18 percent and unemployment levels are high at 35 percent.
Donors
Donor countries for Afghanistan include the United States and Canada. The aid
provided under guidelines of the Development Assistance Committee of the
Organisation for Economic Co-operation and Development is known as Official
Development Assistance (ODA). This form of aid has to be undertaken by the
donor country's official sector, with promotion of economic development and
welfare as the main objective and concessional financial terms.
Currently administered aid is inadequate as it has fallen short of the amount

initially promised, 0.7% of the donor countries' GNI.
There are also problems with how the given aid is utilised. A form of phantom
aid is conditional aid or tied aid. This happens when aid is tied to the purchase
of products such as armaments. Expenditure on foreign technical assistance,
inflated salaries of foreigners to work in Afghanistan and home office expenses
in U.S are other examples of how aid has been mislabeled. Donor countries,
prioritizing their national reputation over helping Afghanistan overcome its
development and growth challenges, have built ‘quick impact projects’ like
cheap roads and buildings in the recipient country. Such inconsequential uses
of aid have accounted for 86 percent of total American aid.
This has also been the case with Canada's aid scheme. 60 percent of Canadian
aid has been restricted to the purchase of Canadian products only. This is an
example of tied aid. Such practises have caused food produce from Canada to
arrive several months later than usual, leading to a reduction in sale prices for
local farmers.
Private enterprises from donor countries have been looting much of the aid.
This has resulted in bad usage of 35 to 40 percent of total international aid. An
Afghan-American expatriate who has worked with foreign contractors in

Afghanistan said, "The international companies are more corrupt than the local
companies because they’re here short-term, tax-exempt, make a profit and
leave." Dictation by foreign institutions, such as the World Bank, IMF and
UNDP, and donor countries on how aid should be spent has led to the
democratically elected Afghan government losing control over aid distribution.
Effects
Afghanistan's economy or living standards have not improved despite donor
countries claiming that they have poured sizable foreign donations and
investments into Afghanistan. For example, the country’s health condition
remains a serious poverty issue and has seen a fall in annual health
expenditure from 2005. The long timings for the arrival of food products from
Canada has been detrimental to the nation’s economy as agriculture
constitutes 31.6 percent of total GDP. As reported by Norah Niland, the
representative for UN High Commissioner for Human Rights in Afghanistan,
"Patronage, corruption, impunity and over-emphasis on short-term goals
rather than targeted long-term development are exacerbating a situation of
dire poverty."
Foreign loans
Afghanistan owes $2.5bn in loans from foreign countries, According to Afghan

Ministry of Finance officials, Afghanistan owes USD 2.5bn in loans from foreign
countries and financial firms during the past 14 years.
The loans were taken from Iran, the Czech Republic, the World Bank, the Asian
Development Bank and the Russian Federation and are not due in 40 years.
Head of the funds department Mohammad Aqa Kohistani said Afghanistan

obtained USD 970mn in loans from the Russian Federation.
He added that negotiations were underway with the Russian government and
other loan providers to forgive the loans. The loans were needed to complete
some of the infrastructure projects in the country.

References:
Website, ministry of commerce and industries.
Website, Afghanistan chamber of commerce.
Website, ministry of mines and petroleum.
Google Wikipedia.
Nominal GDP
https://www.investopedia.com/terms/n/nominalgdp.asp#ixzz54E4EvUPI
Investopedia on Facebook
Nominal vs. Real GDP, and the GDP Deflator
https://www.investopedia.com/exam-guide/cfa-level-
1/macroeconomics/nominal-real-gdp-deflator.asp#ixzz542aYGpBR

Afghanistan Economy 7th Semester

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Afghanistan Economy 7th Semester

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An overview of Afghanistan Economy

Al- Taqwa institute of Higher Education Page 1

Largest cities or towns in Afghanistan

1 Kabul Kabul Province 3,289,000

Al- Taqwa institute of Higher Education Page 2

World Factbook c. 2013

Spoken languages of Afghanistan

There are a number of smaller regional languages, they include Uzbek,

Al- Taqwa institute of Higher Education Page 3

The provincial governors are appointed by the President of Afghanistan and

According to article 140 of the constitution and the presidential decree on

Al- Taqwa institute of Higher Education Page 4

Brief timeline of Afghan politics

 1709 - MirwaisHotak establishes the Hotaki dynasty at Kandahar and

Afghanistan is an Islamic republic consisting of three branches of power

Al- Taqwa institute of Higher Education Page 6

 Afghan Social Democratic Party (Afghan Mellat)

International organization participation

Al- Taqwa institute of Higher Education Page 7

 Shanghai Cooperation   International Finance

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Afghanistan GDP Last Previous Highest Lowest Unit

GDP Annual Growth Rate -2.40 2.20 28.60 -2.40 percent

GDP 19.47 19.70 20.54 0.54 USD Billion

GDP per capita 596.30 599.10 630.40 364.10 USD

GDP per capita PPP 1739.60 1748.00 1839.30 1062.20 USD

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Actual Previous Highest Lowest Dates Unit Frequency

GDP - composition by sector:

Definition: This entry gives the percentage contribution of agriculture, industry,

Afghanistan GDP Annual Growth Rate 2003-2018

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GDP 19.47 19.70 20.54 0.54 USD Billion [+]

GDP per capita 596.30 599.10 630.40 364.10 USD [+]

Actual Previous Highest Lowest Dates Unit Frequency

-2.40 2.20 28.60 -2.40 2003 - 2016 percent Yearly

Afghanistan GDP per capita 2002-2018

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GDP Annual Growth Rate -2.40 2.20 28.60 -2.40 percent

GDP 19.47 19.70 20.54 0.54 USD Billion

GDP per capita 596.30 599.10 630.40 364.10 USD

GDP per capita PPP 1739.60 1748.00 1839.30 1062.20 USD

Afghanistan GDP per capita

Actual Previous Highest Lowest Dates Unit Frequency

596.30 599.10 630.40 364.10 2002 - 2016 USD Yearly

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Nominal vs. Real GDP, and the GDP Deflator

The sum of consumer spending, investment made by industry, excess of

What is 'Nominal GDP'

Nominal GDP is gross domestic product (GDP) evaluated at current market

The GDP Deflator

The GDP deflator is an economic metric that converts output measured at

Real GDP for a given year, in relation to a "base" year, is computed by

Difference between Nominal GDP and Real GDP

The aggregate market value of Real GDP refers to the value of

GDP without the effect of

Base year prices or constant

Value Higher Generally, lower.

Comparison of two or more

Economic Good indicator of economic

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The resulting cut in production caused massive food shortages. Kabul

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A large segment of the Afghan population depends on food imported from