AFGHANISTAN: THE FAILED STATE SCENARIO

How will the Taliban govern and what can be done to protect the nearly 38 to 40 million people that will now remain in Afghanistan under the Taliban’s rule. The Taliban are inheriting a failed state in a deep economic crisis.

1. 4 million out of the country’s population of 36 million are displaced persons;  3 million people are living in internal displacement as a result of violence and another 1 million because of natural disasters; 2,5 million Afghans have already fled the country in search of security, with the majority settling in Iran and Pakistan;
2. Half the population lives below the poverty line. The country remains among the poorest in the world. United Nations (UN) estimates more than 18 million Afghans, more than half the total population – are ‘in humanitarian need’ and, in 2019, Afghanistan ranked 169 out of 189 countries and territories on the UN Human Development Index (HDI).
3. 5,5 million people are experiencing emergency level food insecurity, with an additional 17,6 million expected to face acute food insecurity;
4. Structural trade deficit, equal to around 30 percent of GDP, financed almost entirely from grant inflows.
5. Government is dependent on outside aid for 80% of its funds.
6. GDP per capita is one of the lowest in the world (ranking a low 213th out of 228 rated countries). Only six countries worldwide- among them Burundi, Somalia and Sierra Leone have a lower GDP per capita.
7. Unemployment, and particularly youth unemployment are critical problems.
8. Public debt has reached one of the highest percentages of any country (202nd out of 228).
9. Drought and narcotrafficking are  critical problems.
10. The private sector is extremely narrow, with employment concentrated in low-productivity agriculture, which makes up around half of the economic activity in Afghanistan, while it also accounts for at least half of all employment in a country where two in five people are jobless. 
11. Private sector development and diversification is constrained by insecurity,  weak institutions, inadequate infrastructure, widespread corruption, and a difficult business environment (Afghanistan was ranked 173rd of 190 countries in the 2020 Doing Business Survey). Credit to the private sector equal to only three percent of GDP.
12. Grants continue to finance around 75 percent of public spending.
13. Security expenditures (national security and police) are high at around 28 percent of GDP in 2019, compared to the low-income country average of around three percent of GDP, driving total public spending of around 57 percent of GDP.

Note

1. The Taliban has no cadres that have practical experience in dealing with the problems in today’s Afghanistan
2. The illicit economy accounts for a significant share of production, exports, and employment, and includes opium production, smuggling, and illegal mining. At least a fifth of Afghan GDP is reckoned to come from the opium trade, much of which has been controlled by the Taliban.
3. The long-term development of Afghanistan will depend on accountability, good governance, the sustainable provision of human security, including the reduction of poverty and the creation of job opportunities, access to social and health services, education, and the protection of fundamental freedoms and human rights. The support and positive cooperation from neighbouring central-Asian countries and regional powers, in particular China, Iran, India, Russia and Pakistan, are essential to the stabilisation, development and economic viability of Afghanistan