The history of the state of Afghanistan begins in 1747, when Ahmad Shah Durrani united the Pashtun tribes. The territory of the country has long been the arena of struggle between the Russian and British empires. British influence ended in 1919 when the creation of an independent country was proclaimed. From 1978 to 1989, the country was in the zone of influence of the Soviet Union, with ongoing hostilities. In 2001, US troops and allies invaded the country. In 2004, the first democratic presidential elections in Afghanistan were held, which were won by Hamid Karzai. During the years of ongoing civil war, the Afghan economy has fallen into complete decline. In terms of GDP, the country is in 210th place out of 217, in 2017 this figure was $ 21.06 billion.
General overview. Stages of development
The development of the Afghan economy is usually divided into two large periods - before the war of 1978-1989 and after. During the Afghan war, the economy as a whole fell significantly. Was almost completely destroyedindustry, production volumes decreased by 45%. In 2001, GDP growth was 65%, which is associated with large international assistance. Literacy, income and life expectancy have improved slightly since then, but the country remains one of the world's poorest countries.
The Afghan economy has begun to recover from a low base, GDP growth in recent decades has ranged from 2.3% to 20.9% per year. High growth rates were stimulated by international assistance and the deployment of 100,000 foreign troops. In 2014, artificial economic growth slowed down after the withdrawal of the bulk of US and allied troops.
A large part of the population suffers from a lack of housing, clean water, he alth care and jobs. Last year, the country's economy grew slightly, by 2.5%. The government is aware of the problems and prospects for creating the competitiveness of the Afghan economy. The reform of the budget process has begun in the country, measures are being taken to increase tax collection and fight corruption, however, this territory will depend on international assistance for many years to come.
International assistance
Repeated invasions of foreign troops, continuous civil war have destroyed the country's economy. The latest invasion and the presence of US troops has reoriented much of the trade and services sector. The withdrawal of the international contingent, which began in 2012, left this new sector of the country's economy without work.
Without reliable sources of income, the Afghan economy at the present stage cannot do without international assistance. Between 2003 and 2016, at ten donor conferences, the international community pledged $83 billion for the development of the country. In Brussels in 2016, donor countries decided to allocate an additional 3.8 billion annually - from 2017 to 2020 - for the development of state potential and the economy.
International economic assistance and politics in Afghanistan are directly linked. Major donors are countries that invaded or supported the US intervention.
The economy is still there
Afghanistan has been and will continue to be an agrarian country for a long time, although only 10% of the land is cultivated. Irrigation systems have been largely destroyed, and much arable land is dangerous due to mines left over from the civil war. The main agricultural products are cereals, nuts, fruits, vegetables and nuts. The country is the largest producer of opium and hashish, made from cannabis (hemp) and poppies grown in southern Afghanistan. Drugs are also the largest item in the smuggling trade, which, among other things, goes through the countries of Central Asia to Russia and further to Europe.
Animal husbandry is important - raising sheep, cattle, oxen. On the territory of the country there are significant deposits of natural resources, which, with the exception of natural gas, are almost not developed. The industry is represented mainly by the production of textiles.and other processing of agricultural raw materials. The infrastructure is poorly developed, partially destroyed by the fighting. The competitiveness of the Afghan economy is extremely low, the country exports only agricultural products, as well as handmade carpets.
Agriculture
The industry accounts for approximately 22%, according to others (38%) of the Afghan economy, excluding opium production. The area of arable land is 12.3% of all land suitable for agricultural use. Currently, 2.7 million hectares of land are under grain crops, of which 1.2 million hectares are artificially irrigated. Production volumes have decreased by 30-45% compared to pre-war times. Since mountains occupy a large area in the country, the type of crop grown depends on the height of the sea level. Rice and corn are cultivated at the foot of the mountains, wheat is cultivated higher, and barley is even higher. More than 87% of arable land is devoted to grain. Other cultivated crops include sugar beets, cotton, oilseeds and sugar cane. Grapes, nuts, fruits are also grown in commercial quantities. Fresh and dry fruits, raisins and nuts are traditionally exported.
Drug production
The country is the largest producer of heroin and hashish in the world, with about 300 thousand hectares allocated for the cultivation of cannabis and poppy. The opium poppy became the main cash crop as a result of the interplay of economic and political factors in Afghanistan in the 20th century (1980-2000). The destruction of the country, where one of the main typesbusiness has become a cross-border smuggling trade, made it easy to establish the transit of drugs. The Taliban and other groups encouraged poppy cultivation by peasants. Great corruption also contributed to the development of illegal business. In some years, Afghanistan accounted for up to 87% of the world's opium production. Revenues in some years were estimated to be up to $2.8 billion.
Livestock
Sheep breeding is the most important industry, providing the country's population with leather and wool for the production of clothing, meat and fat for food. In northern Afghanistan, astrakhan breed of sheep is grown from the skins of which smushki are dressed. Before the war, the country was the world's third largest supplier of astrakhan skins. Goats, horses, cattle (zebu and buffalo), camels and donkeys are also traditionally bred. Wool is used for spinning and carpet making, which is an important export item. According to some estimates, the number of the main types of livestock - cattle, sheep, oxen has decreased by 23-30% compared to the pre-war period.
Industry
Afghanistan has never been industrialized, until 1930 there were several arms factories operating in the country. Until the 70s, the industry for processing agricultural raw materials developed: cotton, sugar factories, weaving and wool-spinning factories. The level of economic development of Afghanistan has always been not very high. The Soviet Union built many industrial facilities, which inmost of them were destroyed. Deposits of oil, iron, copper, niobium, cob alt, gold, and molybdenum have been explored and are not being developed.
The light industry is mainly developing - enterprises for the primary processing and processing of cotton, wool and imported artificial fiber. There are small enterprises producing carpets, furniture, shoes, fertilizers, processing medicinal herbs in the country. The food industry, the second largest, produces food for the population: oil mills, enterprises for cleaning, drying and packaging fruits, sugar factories. There are also several slaughterhouses, elevators, mills and a bakery in the country. The largest investment project is the construction of a Coca-Cola plant on the outskirts of Kabul. The food industry produces a significant proportion of export goods.
Foreign trade
Of course, Afghanistan sells heroin the most on the foreign market, according to some estimates, drug sales are 4-5 times higher than the entire official export of the country. In 2017, the country sold $482 million in the vast majority of agricultural products. The top export commodities are grapes ($96.4 million), herbal extracts ($85.9 million), nuts ($55.9 million), carpets ($39 million).
The main imports are wheat and rye flour ($664 million), peat ($598 million), decorative finishing materials ($334 million).
Top export destinations: India ($220 million), Pakistan ($199 million), Iran ($15.1million). The top import origins are the United Arab Emirates ($1.6 billion), Pakistan ($1.37 billion), the United States ($912 million), Kazakhstan ($486 million). Afghanistan has a negative trade balance of $3.29 billion with imports of $3.77 billion.
Main issues
The main problems in Afghanistan are the ongoing civil war and terrorist attacks by Islamic State extremist groups. The Taliban continues to be present in many regions of the country, considering themselves the legitimate government of Afghanistan. The main condition for the Taliban to start a dialogue is the withdrawal of foreign troops from the country. However, the presence of a foreign contingent is largely tied to international assistance. In addition, the country has problems with high corruption, poor governance and poor public infrastructure.
Prospects
So far no one gives rosy forecasts for the Afghan economy. The country will remain dependent on international aid for a long time to come. The government has begun to carry out reforms in the public sector, customs legislation, attract investment, which can create conditions for economic growth. If it is possible to establish control over the entire territory of Afghanistan, then it will be possible to use geographical advantages to organize the transit of goods.
