Afghan anti-poor policies

This video says about itself:

Poverty in Afghanistan is driving some families to take desperate measures.

They are sending boys as young as five across the border into Pakistan, to buy cheap flour, and smuggle it back home.

But the youngsters are risking injury, even death.

Al Jazeera’s Zeina Khodr reports.

George W. Bush‘s and now Barack Obama‘s occupied ‘new’ Afghanistan is the hungriest country in the world.

The United States and NATO-sponsored ‘democratic‘ (elected with a million and a half fake votes, the European Union says) regime in Kabul seems to think there is not yet enough starvation in Afghanistan.

By Khan Mohammad Daneshju in Kabul:

Afghan Taxes Squeezing Poorest

Import duties simply translate into punitive prices while local businesses get away with unpaid taxes, experts say

By Khan Mohammad Danishju

As the Afghan government prides itself on boosting budget revenues, it has been accused of using methods that hurt people on modest incomes while letting large businesses off some or all their taxes.

In an interview for IWPR, finance ministry spokesman Aziz Shams said domestic revenues reached 1.8 billion US dollars in the last fiscal year, which runs from March to March. That represents a 25 per cent increase on the previous year’s figure of 1.4 billion dollars, although it would be less with inflation taken into account.

Shams said around 50 per cent of government revenues came from customs duties and other import-related levies.

The Afghan government operates two fiscal accounts known as the operating and development budgets. While the latter is funded almost entirely by international donors, the operating budget – for wages and running costs – comes partly from domestic revenues. (See Afghan Government Has Cash, Won’t Spend for more on the development budget.)

Last year, domestic revenue was equivalent to 59 per cent of the operating budget, while this year it is forecast at a similar 62 per cent. The Afghan government is under pressure to increase this proportion so as to reduce its reliance on donor funding.

An IMF statement in February, noted that “tax collection has been growing at about 32 per cent per year, a commendable achievement for almost two years of impressive gains”, while noting that the government should be “pressing ahead with revenue reforms to ensure continued sizable increases in tax collection in coming years”.

The finance ministry’s draft budget statement for the current year said the planned revenue increase would come from macroeconomic policies designed to growth and thus the tax base, more efficient collection, rising customs receipts thanks to increased demand for imports, efforts to identify non-paying businesses, and in the long run, the development of mineral extracting industries. (See Oiling Wheels in Afghanistan on the latter.)

Critics of the system say more efficient but indiscriminate taxation of goods means the final price is passed onto consumers – very often the poorest sections of society in one of the world’s most impoverished nations.

“Prices at the market increase on a daily basis. When I ask the shopkeepers about it, they say it’s because taxes have gone up,” manual labourer Ezatullah said.

Ezatullah earns about eight US dollar weeks by hiring himself out as a day labourer on Kabul’s Hajji Yaqub Square. He manages to get work about three days in every seven.

“Why in God’s name are they trying to collect taxes out of our pockets?” Ezatullah asked. “It is shameful for the government to be announcing that its revenues have gone up.”

Public sector employee Gol Ahmad expressed cynicism about the tax system.

“The increase in revenues is indeed a matter of pride for government officials, because they collect them from the pockets of the poor and put them in their own pockets. Why shouldn’t they be happy?” he asked.

Ibrahim Zarif, a trader, confirmed that he and his colleagues passed on all costs including tax hikes to the customer.

“When we import something, we include all the costs such as transport, taxes, illegal extortion by the police and bribes into the prices, and then we add on our percentage profit,” he said. “It’s the public that has to pay for all our costs and profits.”

Khan Jan Alokozay, deputy chairman of Afghanistan’s Chamber of Commerce and Industry, blamed a policy of raising import taxes on everything from cars to essentials like blankets, rice, cooking oil and sugar.

“When taxes go up, traders have to increase retail prices. This is a problem which ordinary people are having to deal with at a time when many can’t afford the bare essentials because of unemployment and low incomes,” Alokozay said.

He cited an increase on the duty payable on flour last year – later lowered when it resulted in retail prices more than doubling – as an example of a misconceived attempt to boost local production.

“The government didn’t make accurate calculations on this. It thought it could increase the price of locally-produced wheat by increasing taxes on wheat flour imports, but it hadn’t reckoned with the fact that Afghanistan doesn’t produce enough wheat to be self-sufficient, so it has to import it from abroad.”

The opening up of the Afghan economy after the Taleban government was ousted in 2001 resulted in a flood of imports rather than the growth of local production. Businesses preferred the quick returns of trade over investment, and the government refrained from intervening in the belief that markets would regulate themselves. Afghanistan’s exports remain limited to a few items – handmade carpets, karakul lambskins and dried fruit and nuts.

The article forgets the most important item: hard drugs, traded by President Karzai’s brother and others.

Afghanistan to be handed over to gangsters. The Afghan economy now runs on opium sales and foreign aid: here.

Afghan child brides: here.

Mood in Northern Afghanistan Shifts against German Troops: here.

Hope in Afghanistan: An Interview With Malalai Joya: here.

David E. Sanger, Eric Schmitt and Thom Shanker, New York Times News Service: “President Obama’s national security team is contemplating troop reductions in Afghanistan that would be steeper than those discussed even a few weeks ago, with some officials arguing that such a change is justified by the rising cost of the war and the death of Osama bin Laden, which they called new ‘strategic considerations.’ These new considerations, along with a desire to find new ways to press the Afghan president, Hamid Karzai, to get more of his forces to take the lead, are combining to create a counterweight to an approach favored by the departing secretary of defense, Robert M. Gates, and top military commanders in the field”: here.

64% of Americans want to see troop levels in Afghanistan reduced: here.

USA: Delta charges U.S. troops returning from Afghanistan $2800 in baggage fees, soldiers capture it on video: here.

The Guardian has reported that Britain and the US are pressing for the lifting of UN sanctions against 18 former senior Taliban figures: here.

Karen J. Greenberg, TomDispatch: “In the seven weeks since the killing of Osama bin Laden, pundits and experts of many stripes have concluded that his death represents a marker of genuine significance in the story of America’s encounter with terrorism. Peter Bergen, a bin Laden expert, … wrote, ‘Killing bin Laden is the end of the war on terror.’… We can just sort of announce that right now.’ Yet you wouldn’t know it in Washington where, if anything, the Obama administration and Congress have interpreted the killing of al-Qaeda’s leader as a virtual license to double down on every ‘front’ in the war on terror”: here.

16 thoughts on “Afghan anti-poor policies

  1. Lagarde lobbies for IMF position

    INDIA: French Finance Minister Christine Lagarde met top officials in New Delhi today to canvas for her candidacy for the International Monetary Fund’s top job.

    Mexican Central Bank governor Agustin Carstens and Ms Lagarde are the only two declared candidates to replace Dominique Strauss-Kahn, who quit as IMF head on May 18 after he was accused of sexually assaulting a New York hotel maid. He has denied the allegations.

    India and other developing states have called for an end to the unwritten convention that requires the IMF head to be from Europe.

    However, they have not come together with a common candidate.


  2. Kerry pans U.S. handling of aid to Afghanistan

    Last Updated(Beijing Time):2011-06-09 11:41

    U.S. Senator John Kerry on Wednesday panned the government’s handling of foreign aid to Afghanistan, saying the billions of aid resulted in minimal gain.

    Speaking at a confirmation hearing for Ryan Crocker, President Barack Obama’s nominee to serve as ambassador to Afghanistan, Kerry said the policy of sending aid to Afghanistan to deny al- Qaida and the Taliban safe haven is failing, as militant groups simply move to neighboring Pakistan.

    “We’ve spent 20 billion dollars in a country where there is no safe haven,” he said.

    Kerry’s comments came after the release of a Congressional report highly critical of U.S. efforts to support and build the Afghan government. The report concluded the United States was spending 320 million dollars a month on aid with limited success.

    “We need to take a closer look at how we are spending money in Afghanistan and the impact it is having on the Afghan state,” the report said.



  3. U.S. aid to Afghanistan not wisely spent: report

    Last Updated(Beijing Time):2011-06-09 08:50

    The U.S. aid to Afghanistan are mostly being used for short-term stabilization programs instead of longer-term development projects, a congressional report said Wednesday, urging the administration to spend the funds in a more effective and sustainable way.

    “We believe the administration can be more effective in how it spends aid in Afghanistan,” the U.S. Senate Foreign Relations Committee’s Democrats said in a report after a two-year investigation. “U.S. assistance should meet three basic conditions before money is spent: our projects should be necessary, achievable, and sustainable.”

    The State Department and USAID are spending approximately 320 million dollars a month on foreign aid in Afghanistan, according to the report.

    The report was released at a critical time when President Barack Obama is just weeks from making a decision on the pace of U. S. military withdrawal from Afghanistan. Obama planned to start withdrawing troops from the war-torn country in July, with the goal of handing lead security responsibility to Afghan forces by the end of 2014.

    However, no consensus has been reached at this point as to how many troops will be ordered back home at the first phase of military drawdown. Some anti-war liberals asked for a robust reduction of troops citing fiscal constraint and the public anti- war sentiment, while others warned a precipitous withdrawal might undermine the security gains that coalition troops have already achieved.

    “The administration is understandably anxious for immediate results to demonstrate to Afghans and Americans alike that we are making progress. However, insecurity, abject poverty, weak indigenous capacity, and widespread corruption create challenges for spending money,” said the report.

    The study also warned that Afghanistan might suffer economic recession after foreign troops leave the country, as approximately 97 percent of Afghanistan’s gross domestic product (GDP) is derived from spending related to the international military and donor community presence.



  4. In Kabul, air pollution a bigger killer than war

    June 9, 2011 by Mustafa Kazemi

    Signs of pollution are everywhere on Kabul’s chaotic streets

    A general view of Kabul city horizon shows the blanket of haze from air pollution. War may kill thousands of civilians a year in Afghanistan, but choking air pollution in the capital Kabul from old cars, poor quality fuel and people burning trash is even more fatal, experts say.

    War may kill thousands of civilians a year in Afghanistan, but choking air pollution in the capital Kabul is more deadly, experts say.

    Signs of the silent killer — pollutants emitted by old cars, poor quality fuel and people burning trash — are everywhere on the city’s chaotic streets.

    Men walking or cycling usually cover their mouths with masks or scarves to keep out the dust. Women clasp blue burkhas to their faces.

    “It’s not possible to stay healthy without a mask,” said Ahmad Wali, a pharmacist who wears his every day, even when working in his store.

    “People are stuck with a very big problem. It’s difficult to reduce pollution quickly. We have to breathe this air.”

    The city’s primitive and over-stretched hospitals are forced to treat ever increasing numbers of people with respiratory problems.

    “I’ve been sick for three years,” said Malalai, an Afghan mother of nine being treated at the Jamhuriat hospital, one of the city’s biggest.

    “When I talk, I get breathless after two or three minutes. I have chest pains when I try to breathe. I can’t walk or stand for a long time and I have no energy.”

    The figures are stark. Around 3,000 people per year die of air pollution in Kabul, the National Environment Protection Agency said last year.

    By comparison, the United Nations says that 2,777 civilians were killed in the war across Afghanistan in 2010.

    There are several main causes of air pollution, but underpinning them all is Kabul’s rapid expansion as people fled to the capital in search of relative stability amid fighting in many rural areas.

    The city was designed for about one million people but is now home to around five million, a figure which the Kabul municipality says has doubled in six years.

    Many of the new arrivals live in illegally built slum homes and Kabul’s infrastructure struggles to cope.

    The city’s roads are usually jammed with old and poorly maintained cars imported illegally from countries like Canada, Germany and the United States, often spewing out fumes which are the by-product of poor quality fuel.

    Many of the roads are unpaved, meaning that when the cars can move, they throw up dust which adds to the poor air quality.

    Households often rely on diesel generators for electricity, while businesses like brick factories and public baths also use them.

    During bitterly cold winters, local people often burn anything they can get hold of, including old tyres and plastic, as they struggle to keep warm.

    The health ministry estimates that the number of Afghans suffering from respiratory problems has trebled over six years to around 480,000.

    Officials admit they are finding it hard to get on top of the problem given the magnitude of issues facing Afghanistan after three decades of war and nearly 10 years after the 2001 US-led invasion brought down the Taliban.

    Last year, they made Thursdays official holidays in Kabul — in addition to Fridays — in a bid to reduce air pollution. A resolution has also been passed to ban businessmen importing old cars.

    The mayor’s office insists the move has had a “very good effect” in stopping pollution getting worse but could not provide any figures.

    “Government vehicles are not allowed to (be used) on holidays and that prevents all the vehicles from moving and is a big help for decreasing the pollution,” said spokesman Mohammad Ishaq Samadi.

    But Ghulam Mohammad Malikyar, a senior advisor to the National Environment Protection Agency, said: “We’re still struggling to put environmental issues and the environment as a priority in national and international strategies.

    “The country was at war for the past 30 years and there was very little control over the environment, there was no environmental protection at all.”

    Doctors warn that unless action is taken, Kabul faces serious problems.

    Erfanullah Shifa, a doctor at the Jamhuriat hospital, said up to 20 people a day were registering with respiratory problems.

    “If air pollution keeps rising the way it is now, Afghan people will face a health disaster in the near future,” Shifa said.

    (c) 2011 AFP


  5. ‘Give military aid to ordinary people’

    Pakistan: The billions of dollars that the Obama administration sends to Islamabad in military aid every year should be diverted to help ordinary Pakistanis, the country’s military chief has declared.

    General Ashfaq Parvez Kayani told a meeting of his top commanders on Thursday that US military assistance should now “be diverted towards economic aid to Pakistan which can be used for reducing the burden on the common man.”


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