Editor in Chief: Moh. Reza Huwaida Friday, April 26th, 2024

Fleeing Cash and Sleeping Government

Foreign and domestic investments are considered the lifeblood of an economy. Keeping the economic vulnerability of Afghanistan and its dependency on foreign aids, investments are more than lifeblood to this country. But due to worsening insecurity in Afghanistan, not only Foreign Direct Investment (FDI) but also investment by Afghans themselves have significantly gone low with passage of each year. In 2003, when Afghanistan Investment Support Agency (AISA) was established in order to facilitate foreign and national investments, hopes and expectations were high.

However, failure of government to tackle the security condition and ensure safety to entrepreneurs and investors, no major firm seems interested in investing in Afghanistan. The contracts of iron and copper mines won by Indian and Chinese firms are also dependent on security and will take long terms to initiate and start giving benefit and employment opportunities to Afghans.

Amid NATO country's plan to withdraw their full troops from Afghanistan by the end of 2014, huge amount of cash money is leaving Afghanistan every year with government having no control and restrictions until current year. The transfer of cash from Afghanistan to UAE and other countries with stable security if on the one hand devalues Afghanis (AFS) and reduces foreign exchange reserves on the other leaves a damaging impact on the overall health of Afghanistan's economy. But, the government has been sleeping like a log.

According to Da Afghanistan Bank (DAB), yearly about $800 billion in cash are taken out of Afghanistan which is double of the total asset of DAB and also twice the total amount of Afghanistan's last year national budget. DAB has recently restricted the amount of cash Afghans can carry while travelling abroad to AFS 2 million ($20,000). But DAB Deputy Governor, Khan Afzal Hadawal said, "The measures will not stop the money from going out." "We definitely prefer them to invest inside the country. Everything depends on security. If it doesn't improve, nobody will invest their money where there is no security."

With the withdrawal of international troops from Afghanistan, the country is to face severe economic crises besides deterioration of security condition. It is a great failure for Afghan government that has awfully failed to wisely make uses of the golden opportunities made available to it by the international community.