KABUL, Afghanistan — Poverty in Afghanistan takes on many forms. As more citizens deal with droughts and gaps in critical supplies, the UN recently requested a humanitarian budget of $730 million. It is essential that the UN and the U.S. government invest in poverty eradication in Afghanistan for the 9.4 million Afghani citizens who ended up requiring food and housing in 2020.
However, there is still hope. While the World Bank estimates that one in every three Afghani citizens live in extreme poverty, strategic investments in climate-resistant agriculture and inclusive financial policies should unlock pathways for a better future for Afghanistan.
Afghanistan has three critical factors causing its poverty levels to increase. These include:
- Inadequate infrastructure
- An urban-rural socioeconomic divide
- A dwindling agricultural sector
It is imperative that Non-governmental Organizations (NGOs), International Institutions (IGOs) and Community Based Organizations (CBOs) address the aforementioned areas if they want to make a real impact in fighting Afghanistan’s poverty crisis.
Lack of Adequate Infrastructure
Infrastructure is essential to poverty reduction plans because it is a stepping stone for sustainable development. Unfortunately, in Afghanistan, urbanized development (the construction of sustainable infrastructure and modernized markets) has only grown by a mere 22.4% since 2015. When compared with over 65 other countries worldwide, Afghanistan is one of the slowest in infrastructural development.
Infrastructure is essential for poverty eradication in Afghanistan as Samuel Tumiwa, Asian Development Bank Director for Afghanistan, explained that “Better infrastructure can strengthen economic growth, enlist improved mobility to energize commerce and agriculture, and boost government revenues available for development spending.”
Infrastructure Development could increase access to electricity, combat hunger with sustainable farming alternatives and prevent illnesses by increasing access to clean water. However, solving the problem is not as simple as it appears.
Afghanistan is a largely rural country reliant on a centralized power grid. This means that in order for Afghanistan to have electricity, the private and public sectors have to make hefty investments in an unreliable grid prone to violent non-state actor attacks.
Electric infrastructure is crucial because, without a sufficient source of power, businesses cannot run and dams and septic systems cannot function. Moreover, power is critical to connecting the Afghani people with NGOs, CBOs or anyone else who could help spur innovation in poverty reduction.
For years, NGOs and the Afghanistan government have struggled with the persistent wealth gap between the urban and rural populations. Currently, 80% of Afghanistan’s population lives in rural areas with the minority being those who can afford to live in densely populated cities such as Kabul.
Nevertheless, this gap stifles potential innovations in poverty reduction. According to Kabul University professor Mohammad Azimi, “Afghanistan [has]the highest rate of poverty globally; only one-tenth of the Afghan population has access to financial services that are mostly localized within the capital and regional cities.”
With limited access to banks, financial aid groups and development-oriented NGOs, it becomes impossible for the Afghani people living in rural areas to receive opportunities, such as education, which can be key to escaping poverty.
The Dwindling Agricultural Sector
While farming only makes up 22% of Afghanistan’s annual economic growth, nearly 80% of the population relies upon it as a source of income.
Current aid packages and policies keep failing in Afghanistan because none of them focus extensively on expanding the struggling agricultural sector.
Natural disasters, arid temperatures and restricted markets are strangling Afghanistan’s agriculture. If policymakers could find a way to combat them, agriculture could be a key solution to poverty in Afghanistan.
Revitalizing the Energy Sector
If policymakers are serious about innovations in poverty eradication for Afghanistan, a good first step would be to revitalize the energy sector and decentralize it.
In the summer of 2019, the International Finance Corporation (IFC) signed a multilateral energy deal for Afghanistan worth $89 million to finance a gas-to-power plant. The deal, known as The Mazar Power Project, will coordinate with Afghani energy officials to generate an estimate of 400 GWh of energy in impoverished northern districts.
According to recent reports, the project will improve domestic energy needs and “be the source of empowerment for Afghanistan’s health, education and industrial sector.”
The production of decentralized grids can draw in international investment in infrastructure projects for water systems, roads and green energy.
Modernizing the Agricultural Sector
Another essential innovation in poverty eradication in Afghanistan is the modernization of the agricultural sector. In 2009, the U.S. Department of Agriculture spent $27.5 million on food assistance and rural development projects to reduce Afghanistan’s dependence on opium poppy production. After 10 years, the U.S. has evolved its efforts. For example, since 2018, the U.S. Agency for International Development (USAID):
- Supported more than 2,200 agricultural enterprises and farmers and over 190,000 households with targeted agricultural interventions to increase productivity and incomes.
- Rehabilitated 277 kilometers of irrigation canals, which improved irrigation on almost 30,000 hectares of farmland.
- Facilitated over $201.4 million in domestic and international sales of agricultural goods.
Moreover, USAID assisted with the creation of the Agricultural Development Fund which has provided Afghan farmers access to special credit lines and resources for future innovations in farming and agri-business. This stands alongside USAID’s Catalyzing Afghan Agricultural Innovation (CAAI) plan, which strives to increase training and female inclusion in farming. It is also working to expand agriculture trade and supply chains by 2023.
Nevertheless, there is always room for improvement. Farmers in Afghanistan have cited a favorable response towards aid proposals such as diversification of crops, advanced-environmental resilient training by NGOs/CBOs and new water conservation methods. By doing this, farming in Afghanistan will be more sustainable and more accessible, thus drawing in more government and private investment.
Increasing Financial Resources
Finally, if any progress in poverty eradication in Afghanistan is to occur, the Afghan government needs to work with international and regional partners to increase financial resources. With more than 85% of the population lacking access to financial resources, the Kardan Journal for Economics argues that “Factors like infrastructure, technology, and financial literacy can reduce poverty through financial inclusion. Financial awareness campaigns should be conducted to educate poor and underserved populations from the benefits of financial services. “
Thankfully, both the Afghan Government and the United States Institute for Peace (USIP) are taking concrete actions regarding financial inclusivity. In September 2019, the Afghanistan Central Bank, otherwise known as Da Afghanistan Bank, launched its revolutionary Afghanistan Financial Inclusion Strategy. The initiative aims to increase access to finance in critical areas and promote formal financial services for households and the private sector, including introducing more Afghan citizens to digital payments and services.
Furthermore, the USIP implemented similar policies since reforms from 2015 resulted in a general revenue increase of nearly 14%, showing that persistence and consistent support from American policymakers is key to increasing financial resources.
In conclusion, it is the duty of not just the Afghanistan government to increase access to critical education and banking resources, but also IGOs, NGOs, CBOs and neighboring nations. Innovations in poverty reduction are real if only those in power are willing to take them on.
– Juliette Reyes