The Asian Development Bank (ADB) forecasts that Afghanistan’s gross domestic product GDP growth will increase by 3% in 2021 and 4% in 2022 after the normalization of business activity and market sentiment.
In its Asian Development Outlook (ADO) 2021 released on Wednesday, the ADB stated that Afghanistan’s economic growth is expected to recover this year and accelerate next year after a sharp decline in 2020 from the coronavirus disease (COVID-19) pandemic and continued violence and instability.
“Afghanistan’s economy experienced unprecedented disruption in 2020 due to COVID-19 pandemic, political instability and continued violence, which cut remittances, trade, and revenue,” said ADB Country Director for Afghanistan Narendra Singru.
“With a successful COVID-19 vaccine rollout and post-pandemic recovery, the country should be on track to achieve economic growth this year and in 2022 as business activity and market sentiment normalize,” Singru said.
According to the report, inflation more than doubled from 2.3% in 2019 to 5.6% in 2020 driven by higher food prices. Food price inflation in 2020 was estimated at 10% with the highest spike recorded in April when border closure and panic buying propelled it to 16.6%. Inflation is projected to moderate to 5.0% in 2021 and 4.0% in 2022 as food supplies improve.
However, risks remain, including implementing vaccinations in remote and insecure areas, conflict, criminality, corruption, political instability, and broader social fragility. If unaddressed, these could weigh heavily on the economy and impede recovery.
“Supporting the recovery of micro, small, and medium-sized enterprises (MSMEs) hard hit by the pandemic is pivotal to safeguarding workers’ incomes and livelihoods, according to the report. Before the pandemic, MSMEs were estimated to provide nearly 1.6 million service and industry jobs. The government approved a 2-year support package worth $295 million in October 2020 to improve business conditions and implemented countercyclical measures that include support for MSMEs,” the report read.
The ADB suggests that Afghanistan should facilitate MSME access to markets by developing infrastructure, improving security, combating corruption, simplifying regulation, strengthening property rights and contract enforcement, and promoting innovation and better labor skills in order to improve the business environment.
“Increasing access to credit and further expanding the formal bank sector is also crucial,” the organization said.
“ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region,” the report concluded.
Government to build four dams in Zabul
The Afghan government said Friday that four dams would be constructed in Zabul province in order to help manage waters in the country, local officials said.
According to the officials, the dams – Mizan, Markok, Qaria Aja, and Allaudin – would be constructed at a cost of 132 million AFN.
The officials stated that the dams will be used for hydroelectric and irrigation purposes once the projects are implemented.
Ahmad Gul Rasouli, Governor of Zabul, stated that the dams could also produce between 61 to 77 MW of electricity.
The development comes as the government last month promised to begun constructions of 44 across the country this month.
According to the National Water Affairs Regulation Authority (WARA), the following dams, at an estimated cost of $600 million, would be contracted in 21 provinces.
Aghan Jan in Uruzgan; Mizan, Markok, Qaria Aja, and Allaudin in Zabul; Zardalo, Mullah Cheragh, and Chard in Ghazni; Gromby, Gorbat and Jalrez in Maidan Wardak; Gomal, Gomal Dowom, Zama, and Rustai Mirza in Paktika; Domand in Khost; Kharwar in Logar; Sori Khola in Paktia; Sultan Ibrahim and Qale Sokhta in Sar-e-Pul; Almar and Khisht Pol in Faryab; Rustai Aab in Samangan; Kantiwa and Kala Gosh in Nuristan; Aab Lory in Kandahar; Shoray, and Buzbai in Badghis; Wursaj Socha Maagh in Takhar; Dahane Mohammad Gicha in Bamiyan; Dare Bamsir in Daikundi; Shina, Zardag Bam, and Khair Maidanak in Ghor; Noor Gul and Qata Qala in Kunar; Pang Ziyan, Dare Shrasta, and Surkh in Nangarhar; Buzban in Ghor; Talkhak in Parwan; and Watan Gat in Laghman.
WARA stated that the dams, which will be used for hydroelectric and irrigation purposes, could store around 1,200 million cubic meters of water once the projects are implemented.
Once construction is complete, these dams will also irrigate an estimated 320,000 hectares of land, WARA said.
The Afghan officials said that the projects would also provide employment for thousands of people.
ADB committed to assisting Afghanistan post troop withdrawal
The Asian Development Bank says it will continue its economic programs in Afghanistan after US and NATO troops have withdrawn.
Officials at the bank said that although the withdrawal of foreign troops from Afghanistan will create an economic vacuum, the bank is working to continue its development plans for Afghanistan.
Officials added that they are continuing their projects in the sectors of electricity, transport and agriculture.
“We have a large number of infrastructure projects, and the security of these projects is provided by the Afghan Public Protection Forces, we will continue to work,” said ADB’s Country Director for Afghanistan Narendra Singru.
On the other hand, the Afghan Chamber of Commerce says that there are economic-related concerns about the withdrawal of foreign troops from Afghanistan, and some problems will remain in this area.
However, economists say continuing ADB projects in Afghanistan could address some of the economic challenges posed by the withdrawal of foreign troops.
Public Works on track with new road linking Badakhshan to China
The Ministry of Public works said Tuesday that construction of a road, connecting Afghanistan’s Badakhshan province to China, is underway and 15 percent of the project has been completed.
The Ministry said in a statement, the construction of a 49.7km unpaved road has started from Bozhai Gonbad Khord Pamir in Badakhshan and extends to the end of the Wakhan corridor close to the border with China.
The Ministry stated that the project is part of the government’s future plan for boosting regional transit that “brings Afghanistan steps closer to regional connectivity and economic policy.”
The project, at a cost of more than 369 million AFN, will be funded by the government, the statement said.
According to the statement, the impassable mountainous Wakhan corridor, which is a narrow strip of territory in Badakhshan province that extends to China and separates Tajikistan from Pakistan and Kashmir, would be connected to China via the road.
The Ministry of Public Works stated that the road, which will eventually be paved, will be the Wakhan Route and will “not only be a shortcut between China and Afghanistan…but will also help tourists reach Wakhan National Park.”
Historically, Badakhshan is a region comprising parts of what is now north-eastern Afghanistan, eastern Tajikistan, and the Tashkurgan county in China. However, the name is retained by Afghanistan in Badakhshan Province.
Located in northeastern Afghanistan, Badakhshan is bordered by Tajikistan, Pakistan and China.
Most of the province is occupied by the Hindu Kush and Pamir mountain ranges.
Once Badakhshan was a stopover on the ancient Silk Road trading path but the Wakhan corridor has been closed to regular traffic for over a century as there is no modern road.
There is a rough track for a few dozen kilometers that was built in the 1960s, but for much of the way, to the Chinese border, there are only rough paths.
The remoteness of the region has meant that, despite the long-running wars of Afghanistan since the late 1970s, the region has remained virtually untouched by conflict and many locals, who are mostly composed of ethnic Pamir and Kyrgyz, are not aware of wars in the country.
Day 3 of ceasefire: MoD accuses Taliban of violating ceasefire
Atmar conveys condolences to Palestine just hours before media offices bombed
Israel-Gaza conflict rages on, diplomacy yet to gain traction
Taliban faction’s deputy dies in Kabul from injuries sustained in Herat skirmish
India’s daily COVID-19 deaths near 4,000 as WHO flags concern
Russia ask 10 US diplomats to leave in retaliation against Washington
Iran nuclear chief says 60% enrichment has started at Natanz site
Chad President Idriss Deby killed in battle
Putin warns West of harsh response if it crosses Russia’s ‘red lines’
In Mexico, ancient Maya cave reveals mysterious painted hand prints
Tahawol: Efforts underway for holding Istanbul peace summit
Zerbena: Weekly economic news in Afghanistan
Morning News Show: Second day of Afghan ceasefire discussed
Sola: the three-day Eid ceasefire across Afghanistan discussed
Tahawol: President Ghani says current peace process opportunity must be seized to end war
Latest News4 days ago
US destroys unwanted gear and sells it as scrap
World5 days ago
Palestinian rocket fire, Israeli strikes in Gaza run into second day
World4 days ago
35 killed in Gaza, 5 in Israel, as violence escalates
Latest News5 days ago
Khalilzad calls for peace talks; warns against military solution
Latest News5 days ago
Qureshi says hopes for peace ‘high’ after Ghani, Bajwa meeting
Latest News2 days ago
Day 2 of ceasefire: blast hits Kabul mosque during Friday prayers
Latest News4 days ago
China calls for ethnic inclusion and moderate Islamic policy in ‘new’ govt
Latest News5 days ago
Saleh accuses US of legitimizing Taliban which he says are ‘terrorists’