Growth and security are inextricably linked in Afghanistan, with economic growth being meticulously driven by developments in security environment and changes in political stability. Global indicators on conflict and political stability, such as the Fragile States Index, World Governance Indicators, or others, employ a universal definition for political stability for all countries. Yet, global indicators may fail to account for the complexities of local political, institutional and historical contexts.
The Biruni Institute will thus develop a composite index of political stability and leading economic indicators, defined for local context and political dynamics, to be a more relevant and more meaningful indicator to track political stability and economic growth in Afghanistan.
Lack of high-frequency economic data, as well as poor quality of annual national accounts data, make economic analyses and policymaking extremely difficult. Hence, the very reason why a simple proxy indicator, yet robust enough to accurately reflect market conditions, business sentiment, consumer confidence, political uncertainty, violence, and fragility, is strongly needed in Afghanistan.
The Biruni team of economists and statisticians believe that a tractable yet more meaningful composite indicator can be compiled using simple proxy indicators for which data is either readily available or can be easily collected and compiled, on quarterly basis, without significant costs.