Afghanistan's Economic Situation

The economy of Afghanistan was paralyzed following Soviet invasion and the war that followed.  Prior to the war, Afghanistan's economy had been
starting to grow, and was considered to possess good economic potential just before the April 1978 coup. 
   As a direct result of the Soviet's presence in Afghanistan, the country has been left with no economic infrastructure, and the economy continues to
be supported by international aid.  The price of bread in Kabul (capital of Afghanistan) has risen 40% in one day because of local food shortages.
As a result, close to 300,000 of Kabul's residents rely on a project sponsored by the WFP (World Food Programme).  The project runs subsidized
bakeries that sell bread with 95%+ subsidy.  WFP supports about 25-30% of Kabul's population this way, as well as through food-for-work schemes
and hospitals.  The price of food in Jalalabad is also increasing and the inflation rate in the Herat region was estimated to be 400% at the start of the current
reporting period.  Due to the present deplorable economic conditions, many people are living solely on bread and tea.  The increase in food prices can be 
attributed to the closing of the border between Uzbekistan and Afghanistan that occurred in June 1997.  
  The Administrator of the United Nations Development Programme (UNDP), James Speth, visited Afghanistan in September of 1997, and recognized
that the world was prepared to offer major assistance for the reconstruction and development of Afghanistan's economic infrastructure.  However, not until
a cease fire was declared and peace was established.  The 1997 appeal for assistance totaled $133 million, but the nation only received 29% of this because 
the international community was fearful of making large investments because any gains could potentially be lost.  Once Afghanistan's economic problems are solved, 
it is believed that it would lead to the further amelioration of other problems facing the country.



Some helpful and informative sites about Afghanistan's economy:

The Political Economy of War and Peace in Afghanistan
The ABC Country Book of Afghanistan




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