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Troop drawdown and housing market slump

As foreign troops have already started drawdown, its implications on Afghan economy have started showing signs. As a first sign there was a sharp decline in foreign donations. And now as a second symptom of the crisis, housing market in the country has started declining. Given the pace of government’s cabinet formation, and deterioration of economic growth and security, soon the government will find itself on the edge. As foreigners are withdrawing, hundreds of houses have been evacuated. This is happening only in Kabul. If the number of houses (emptied) is added from the provinces, it will reach to thousands. When then government of Hamid Karzai locked its horn with the United States over the bilateral security agreement (BSA) and highly controversial nighttime raids by foreign forces, capital flight started. Domestic investors were hit by a constant fear of loss. However, after the National Unity Government signed the BSA, national economic growth should have rebounded. Strangely enough, it didn’t happen. Even though the US hinted its withdrawal plan is open for review but despite that hundreds of houses are being emptied. Many foreign civilians have also left the capital city. Just a walk in the Sherpur area is enough to see the effects of the withdrawal. If the government fails in coming up with an alternative plan, reducing the pace of capital flight, soon people will think the war was good and its recession ominous. If people build such a notion at any point of the time in future, it will be a biggest failure of the current government. People will start missing Afghanistan’s brief experiment with war economy. Though, practically, Afghanistan’s war economy started taking its shape back in 90s which is still going on as it is the war brought billions of dollars into the war-wracked country. Now this economy needs to be integrated into peace economy.

The government will have to spend its energies into identifying and supporting structures which tend to invigorate and solidify economic growth, peace and security in order to avoid a relapse into conflict. The government’s unintentional and unfelt refusal to reform national economic paradigm will lead the country to economic chaos. It doesn’t mean the current government is led by incompetent leadership but their internal bickering is the main driving force towards failures on many fronts. Because of the internal rupture, the institutions of economic management, budget formulation, tax collections, and resources allocations are visible nowhere. Currently the government looks gotten away from what its two leaders had vowed during their election canvassing. It did more harm than good when the US vowed in mid 2011 that it will begin a gradual withdrawal. For the US, it took so long in realizing that the very act of executing the exit strategy creates dynamics that will spur insurgency. It’s good that the US announced its drawdown plan is open for review. But what is the action or plan of Kabul? How it will cope with the economic crisis which is in offing and whose signs have already started showing? It needs mastering a daunting agenda, but the question is who will master it when the government couldn’t form its cabinet despite repeated calls from the Wolesi Jirga, the Meshrano Jirga, civil society, and international organizations. As smooth seas don’t make skillful sailors so does smooth governance doesn’t make astute and shrewd leaders, therefore, the two leaders should turn the challenges into opportunities.

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