Afghanistan will need annual aid of $7bn after foreign troops’ pullout

PanARMENIAN.Net - Afghanistan will need $6-7 billion a year in aid over the next decade to help grow the economy, the head of the central bank said on Tuesday, June 19 on top of a $4.1 billion bill for security forces to keep the peace once foreign troops leave in 2014, Reuters reported.

In the run-up to a conference with donors in Tokyo, the government repeated a long-standing call for foreign assistance to be routed through Afghan government entities rather than international organizations, governor Noorullah Delawari said.

That could complicate discussions with foreign backers who are worried about misuse of funds.

More than 90 percent of Afghanistan's $17.1 billion national budget comes from foreign donations but the economic crisis in Europe, shrinking budgets in the United States and voters weary of the nearly 11-year war, that assistance has looked in peril.

"I have heard from Afghan government ministers, somewhere from 6 to 9 billion assistance is required. I think, I see it at about $6-7 billion a year without military, it's just economic assistance, that should help us to go over, and continue our economic growth," Delawari said in an interview.

The World Bank last November warned that Afghanistan will suffer a recession in 2014 and beyond after foreign troops leave and aid is cut back substantially. It forecast a $7 billion deficit in the national budget each year through 2021.

Delawari said Afghanistan had made headway since 2001 and the economy was expected to expand 7.4 percent this year because of a good agriculture crop, but it was hard to see aid vanishing because the country was not yet out of the woods.

"I think the way it is, on the same basis Afghanistan received assistance during the past 10 years that will continue because the underlying problems have not been changed. Terrorism, those issues are still there."

Landlocked Afghanistan is hoping that its underground reserves of copper, iron ore and oil will help make up some of the shortfall, but Delawari said the revenues from the extractive industries were "five to 10 years away if not more".