Interview with Kabir Khan Isakhel on Afghanistans Economic Prospects in 2015 Posted by: admin Afghanistan is a land of considerable potential, though its future rests on trade and transit and the extractive industries. The December 2014, the London Conference provided the opportunity for the new President to present his plans, with a much stronger focus on practical reforms. As a Senior Legal Advisor to the Special Representative Ahmad Zia Massoud, who leads on Governance and Reform, we maintain a clear focus on improving the investment and business climate, to drive growth and employment. In 2015, both political and security uncertainties continue to weigh heavily on Afghanistan’s economic performance, and the government again faces another fiscal crisis, made worse by the challenges of establishing a new cabinet. The leadership has however worked hard to identify the proposed cabinet, with the aim of combating corruption and increasing the technical capabilities of Government. Afghanistan had maintained macroeconomic stability from 2002 to until 2013, when the economy began to slide. I have no doubt that political and security uncertainties have however weakened investor confidence, hurt economic activity and led to the emergence of macroeconomic vulnerabilities. Provided that a common understanding is reached on the 2015 budget, the macroeconomic framework will maintain buffers of low debt, a comfortable international reserves position, and the current account should continue to be financed by donor grants. However, should the emerging situation with ISIS begin to erode donor confidence, 2015 could emerge as a year with another fiscal crisis, impacting national development and the real economy. Exchange rate flexibility will also help protect competitiveness and the international reserves position, though again if inflation increases further, the costs of import will become more expensive undermining international reserves. In relation to structural issues, the Government has reached an understanding with the Government on measures to safeguard financial sector stability and strengthen the financial sector as well as increasing domestic revenue mobilization. We also plan to further combat money laundering and the financing of terrorism framework and step-up anti-corruption efforts. Our Government has made considerable progress in regional trade and good neighborly relations, and discussion with the Chinese Government on the New Silk Road and ADB on CAREC provide the foundation for long term economic security and improved integration. Physical integration – roads – transport – ports and other value chain infrastructure is key to our long-term future. The immediate business outlook for Afghanistan is probably similar to 2014, though as rates of construction increase, much will depend on the outcome of the winter snow, upon which agriculture is made possible. Late snow brings some immediate concerns, however this may be offset by Afghanistan’s private sector, which has emerged as a champion of growth, albeit in a difficult context. Mining, high value agricultural products and energy are key growth areas in 2015 and beyond. - See more at: arabianmonitor/blog/interview-with-kabir-isakhel-khan-on-afghanistan-s-economic-prospects-in-2015/#sthash.6EzxTFfu.dpuf
Posted on: Wed, 21 Jan 2015 08:05:11 +0000
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