The much-anticipated Tokyo Conference for Afghanistan has opened in the Japanese capital. High on the agenda are the deliberations over the fate of the international assistance to Afghanistan over the critical period beyond 2014. The 2015-2025 decade is what has kept busy the foreign pundits and the Afghan authorities alike. Afghan Finance Minister, Omar Zakhilwal, prior to his departure for the conference, spoke of Afghan government's ambitious plans to secure a fair deal for Afghanistan.
Going by his statements, the government of Afghanistan will be satisfied with no less than $4 billion in annual aid pledges over the first few years of this period. While it is unlikely that the international community will consent to pledging a figure as high as this, their approach would be conservative, avoiding the euphoric figures that once characterized such "fund-raising" events for Afghanistan.
Over this period, Afghanistan will need foreign aid more than ever. The results of inaction and apathy could be already visible: catastrophe and a reverse of hard-earned gains. The fact that the ailing economy of Afghanistan desperately needs its lifeline of incoming dollars whether military or humanitarian has been mercilessly on display over the past two weeks in Kabul and other major Afghan cities: a rise in the exchange rate of Afghani/dollar to 51.5 from 50 has proved to be nearly devastating for the shaky economy here.
The spike in the exchange rate has made prices of essential commodities such as food items shoot through the roof. Staple food, already difficult to come by for a majority of Afghans, has become yet more inaccessible. There has been a 20% rise in prices of essential commodities and staple food. For common Afghans this is intolerable. As perfectly put on display, the economy remains vulnerable to shocks both from outside and inside the economy. Ask about the reasons of the slide in Afghani/dollar exchange rate: Nurullah Delawari, the governor of Afghan Central Bank, Da Afghanistan Bank, has attributed the exchange rate shock to the approaching Hajj season when many to-be-Hajis flock to currency markets to buy dollars and prepare for the pilgrimage.
If the Afghan economy of today and its fundamentals are so frail that a few thousands of Hajis buying dollars can so easily wreck the prices and the livelihoods of hundreds of thousands of people, then what can we expect to happen to the economy when larger and more significant events, such as a drop in foreign military spending due to a partial military withdrawal, will eventually happen? This recent episode should be rather a wake-up call.
It is under such circumstances that Afghanistan and its international partners sit at the table in Tokyo. The government of Afghanistan had announced far and wide that it has done its homework for the conference. During days and weeks before the conference, Afghan authorities were all over the ubiquitous Afghan TV channels boasting about the plans and proposals they said they would put before the international community in Tokyo. The plans and proposals supposedly prepared by the Afghan government include a focus on the rehabilitation of agricultural sector while pitching for massive foreign investment in the country's mines and minerals sector. These two sectors form the two pillars of the Afghan government's strategy for pulling off a long-term economic revival in the country. The recent controversies surrounding the northern oil blocks have tarnished the image of the government at quite the wrong time.
The government of Hamid Karzai would try hard to impress the international community with a long list of "gains" and yet a longer list of supposed miracles that are bound to befall Afghanistan, should the international community stay generous for one more decade. The international community has a hard time believing the cacophony of noises that will come out of the Afghan representation at the conference. Confidence in the Afghan government and in the person of President Hamid Karzai is at a historical low.
"On the record", you might still see and hear the Western leaders being all praise and admiration for the Afghan leader and his team. They all speak in one voice of the "challenges" ahead and the multitude of problems that "success" in Afghanistan still encounters. "On the record", the Afghan leader and his team are partners in a treacherous journey against all odds –rarely would you come across open expressions of dismay at the leader and his team. "Off the record", however, things, attitudes and views are quite different. "Off the record", the person and his team are widely regarded as being unable to "deliver"; brief and simple – period!
The bitter fact has been that the frustration with how the government in Afghanistan has dealt with the widespread failures in governance and administration has been overflowing. We are going to see this fact reflected in the way the international community would approach the Tokyo Conference. It is only natural to expect the international community and the donor countries to have stronger-than-before strings attached to their pledges of aid and support to Afghanistan beyond 2014.
If these countries were more liberal in their hand-outs over the past many years, we are clearly witnessing a trend towards demanding more accountability and more realism in how much money and where they are willing to pour in. It is certain that the government of Afghanistan will have a hard time turning these pledges of aid into hard cash when the time comes due. For the majority of donor countries, the roadmap ahead is clear and definite: pledges are to be made good and promises made into cash only once the government in Kabul keeps good its end of the bargain; otherwise, many of these pledges will go unfulfilled.
The incentives for the international community to keep pouring funds into this seemingly endless pitare are fast diminishing. Unlike the 2001-2014 period when foreign aid was largely meant to work as a reinforcement of the military efforts, beyond 2014, there would be no such incentive for the international community. If the government of Afghanistan is to see the $4 billion in annual aid turn into a reality, it must do a lot to meaningfully address some genuine concerns of the international community. However, with things in Afghanistan turning worse by day, as of now, it is unlikely that that this government can deliver on this.