The recent release of the United Nations Development Program (UNDP)’s Human Development Report 2020 is another reminder for Afghans to think more deeply about the country’s development modalities and economic prosperity.
Human development is a less discussed concept in Afghanistan, both conceptually and as a policy measure in government circles. While defined as the process of widening people’s freedoms and opportunities, and improving human wellbeing, the concept is not even introduced in the country’s education system.
As Afghanistan moves into the future against the backdrop of the ongoing peace negotiations, this opens a new window to discuss critical questions. What kind of economic growth and prosperity would the country like to embark upon? How to make it sustainable? The release of the updated 2020 HDI report is therefore both timely and relevant.
National policy papers such as the National Development Strategy (ANDS) and Afghanistan National Peace and Development Framework (ANPDF) lay out Afghanistan’s official narrative with regard to prosperity and wellbeing. In a nutshell, the development approach in these papers, and for the last 20 years, has been one of needs-based, short-term remedies for catching low hanging fruit. This is often blamed (and sometimes rightly so) on a lack of security, low levels of human capital, and conflict in aligning donor interests with priorities in Afghanistan.
While it is important to learn from international best practices, they cannot replace the need for Afghan voices and discussions on development. These strategies and frameworks fall short of a long-term (even a medium-term) vision for the country’s development path. With investments in human development and capacity building programs over the last 20 years, it’s time for Afghans to initiate their own discussions on such questions.
What is important for these discussions is to recognize the realities and constraints before proposing solutions. Among the constraints facing most of the less developed countries, we can name four in the case of Afghanistan:
First, failing to mobilize domestic resources due to security issues, a large informal economy, and inefficient revenue collection. Second, limited economic diversification. The COVID-19 pandemic stands as a testament that the Afghan economy is heavily dependent on whether the Torkham border crossing with Pakistan is open or closed. As result, this situation makes the Afghan economy heavily dependent on external factors. Inflation is determined by the level of imports; export markets lack comparative or competitive advantage to compete at regional or international levels; and with heavy reliance on the primary commodities market’s total productivity remains as vulnerable as ever.
Third, unrealistic and high expectations from the private sector. There is no or little incentive for the private sector to enter markets where insecurity and corruption are very high and legal disputes take decades (if not centuries) to resolve. Such conditions are detrimental to investment and cash flows. It is very optimistic and naïve to anticipate that the private sector will replenish the gap in financing created by ever-declining official development assistance (ODA) grants.
And finally, Afghanistan suffers from a proliferation of goals, targets, conventions, frameworks, and conditionalities imposed on government agencies by international donors. Line ministries in the Afghan government have become active agents in meeting the targets and triggers imposed upon them to ensure the flow of grants to their respective offices. Basic service delivery has been sacrificed at the expense of meeting foreign-set targets and managing the cumbersome administrative work that they ensue.
With these constraints and conditions on aid spending, the list of National Priority Programs (NPPs) seems like a wishful laundry list.
What Afghanistan needs at this juncture is a hybrid and future-needs oriented approach. First, Afghan leaders need to identify realities and practices in the country that have survived the test of time. Second, Afghanistan needs to learn from international best practices in order to plan for the future. So far, the approach taken by many international partners has been one of dismissing domestic and contextual solutions — bottom-up approaches — that can be drawn from Afghan society.
Afghanistan’s future approach must question the route taken toward prosperity since 2001. Major side effects of a narrow focus on achieving GDP growth have led to catastrophic levels of income inequality and poverty in the country. Afghanistan witnessed an average growth rate of 9.6 percent between 2003-2012, and 2 percent since 2013. Poverty rates have increased from 39 percent in 2012 to 54 percent in 2017. Preliminary official figures from the National Statistics and Information Authority (NSIA) state that poverty has dropped to 47.2 percent in 2020 — still very high — but most non-official estimates, for example Biruni’s Afghanistan Economics Outlook, the World Bank’s IFC survey, and others, show the opposite given the recent economic recession and COVID-19 pandemic.
This average figure means very little in the context of human development when we have high levels of disparity in several dimensions (including gender, income, and the environment). These dimensions directly affect Afghans’ freedoms, opportunities, and wellbeing.
The global discussion on human development is one more suited to advanced economies. It involves two fronts: ecological and social boundaries. Social boundaries covers food security, health coverage and access to basic health services, housing, justice, energy, and so on. As economies become more advanced, access to and the boundaries of these issues expand too. Current development models have all been achieved at the expense of the environment. Ecological boundaries include climate change, threats to biodiversity, contamination of underground water reserves, greenhouse emissions, and carbon footprints.
As part of the discussion in Afghanistan, we must understand that while these two competing objectives require a balanced approach, Afghanistan is not an industrial economy and remains a victim of global interconnectedness. The current threats to the ecological boundaries mentioned above in Afghanistan stem from a policy failure rather than industrial action. One example is the air pollution in Kabul city.
Most economic activities and administrative offices are centered in Kabul, this has attracted urban migration and created an ever-increasing pressure on the limited resources in the city. Little or next to nothing has been done by the authorities to reduce this pressure. Not only that, but in a city that is already overpopulated more houses are being built or planned.
This is not sustainable. As such, the pressures on the ecological boundaries in Kabul and in general in Afghanistan are simple policy failures, not the products of a industrialization-driven catastrophe. To reduce the extreme rural-urban migration into Kabul city, Afghanistan needs to disperse the economic and administrative burden across the country, perhaps to six different major cities. This will solve the immediate issue in Kabul city and ease the economic and ecological pressures.
However, long-term planning requires a different approach to the current dominant needs-based thinking practiced by the government and international partners in Afghanistan. We need a hybrid futuristic thinking to better prepare for the future. The Human Development Index (HDI) provides a natural starting point to take into account other dimensions of development as well GDP growth.
2020 HDI Report on Afghanistan
The report releases figures for different indices for Afghanistan in 2019. The human development index (HDI) ranked Afghanistan 169th out of 187 countries and the gender development index (GDI) places Afghanistan in group five, which is the lowest group of countries in terms of gender equality. In addition, the gender inequality index (GII), reflecting inequalities between men and women, ranks Afghanistan 157th out of 162 countries globally. The comparison dimensions include political participation, attained education levels, morality rates, and labor market participation. Finally, in the multidimensional poverty index (MPI), measuring the share of the population that is MPI poor, Afghanistan scores 0.272.
The figures in the report adjust economic growth rates for inequality of income, poverty levels, gender parity, and a new index of planetary pressures adjusted-HDI, which focuses on environmental factors. These are better representations of the human development situation in any given formulation than the average GDP growth figures cited far more frequently.
Dr. Lutfi Rahimi has a Ph.D. in economics from the University of Exeter, U.K. Currently he works as a Head of Research at Biruni Institute and is Assistant Professor of Economics at the American University of Afghanistan.
This article first appeared in The Diplomat in November 2020.