Troop withdrawal could trigger economic depression in Afghanistan

Expensive nation-building efforts have had limited success in Afghanistan, and without proper planning, a troop withdrawal in 2014 could set off "a severe economic depression," according to the conclusions of a two-year congressional investigation from Senate Democrats released Wednesday.

"A precipitous withdrawal of international support, in the absence of reliable domestic revenue and a functioning market-based economy, could trigger a major economic recession," says the report, which was prepared by the majority Democratic staff on the Senate Foreign Relations Committee.

World Bank data estimates that 97 percent of Afghanistan's gross domestic product comes from spending related to the military and donor community presence, according the report, which warns that a withdrawal could pull the rug out from under the Afghan economy.

As President Obama prepares to begin drawing down troops next month, the report says that the administration should reassess its costly assistance strategy.

The study details how the majority of aid money in the region has been used for short-term stabilization programs, as opposed to long-term development projects, and questions the efficacy of both.

"The evidence that stabilization programs promote stability in Afghanistan is limited," the report says.

In fact, the study notes that at times, the money flowing into local governments can actually "fuel corruption, distort labor and goods markets, undermine the host government's ability to exert control over resources, and contribute to insecurity" without the proper oversight.

The report advises that additional planning is necessary to facilitate a smooth transition and says that the administration should "standardize Afghan salaries," which it notes are currently "inflated" and have created "a culture of aid dependency."

As next month's troop withdrawal looms, the administration has yet to make a decision on how many troops will be coming home. President Obama will hold a video conference on Wednesday with Afghan President Hamid Karzai to discuss the drawdown.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

    Download
  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

    Download
  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

    Download
  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

    Download
  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care

    Download

When you download a report, your information may be shared with the underwriters of that document.