Afghanistan: Down the Rabbit Hole: A Problem of Economics, not War (blog post)

Article I wrote a while ago on Afghanistan, finally getting around to uploading it. Comments and opinions most welcome:


Afghanistan: Down the Rabbit Hole.
Operation Enduring Freedom: A Problem of Economics, not War


Historically speaking.

Shortly after September 11, 2001, The United States launched Operation Enduring Freedom, along with the British Armed Forces and the Afghan-based Northern Alliance. The stated goal was the capture of Osama bin Laden and the destruction of a safe-haven for Al Qaeda – ending its use of Afghanistan as both a location for training camps, and for launching operations around the World. The secondary goal was that of the removal of the Taliban, an Islamist militia group that had ruled Afghanistan since 1996, and the creation of a viable democratic state.

With overwhelming military might, the United States and its allies moved swiftly into Kabul, and the Taliban and Al Qaeda – now a singular entity, retreated to the hills and to safe havens across the border in the Northwest Frontier Province of Pakistan. And the status quo has centered on this rearrangement since.


Re-framing the debate.

Some of the statistics on Afghanistan are just astonishing. Afghanistan has, for instance, its median population age just squeaking up to 18. Compare that to India, which, with its huge population boom, has a median of 26, or the United States, with a more stable population, with a median of 36. Life expectancy is at 44 years, compared to 66 for India or 76 for the US.

 Freedom and democratic rights are nice, but the mental model for what that means, in the sense of Charlemagne, Franklin and Rousseau doesn’t exist in Afghanistan And freedom and democracy aren’t necessarily things you celebrate or think about much when your life expectancy is 44, and the median age of your countrymen is 18. Afghanistan’s GDP (nominal) is $14bn – $7bn less than Apple’s fourth quarter revenues in 2010. Even adjusted for purchasing power parity, its GDP clocks in at $29bn, or, IBM’s earnings in the quarter ended Jan 2011.

78% of the Afghanistan’s labor force is involved in agriculture. Opium is Afghanistan’s #1 crop. Afghanistan is the #1 producer of opium in the World. The US has rightly focused some of its efforts on fighting the production of Opium – because (a) it’s in the general interest of the World, and (b) Opium production is the Taliban’s greatest source of revenue today. But what about the people who rely on cultivating opium for their livelihood? What’s on offer to them to make opium-farming less attractive to them? Opium production dropped significantly last year due to a naturally occurring crop fungus. But that seems to have driven up prices and increased profitability instead, making it an even more attractive alternative to many.

The Financial Times was looking at the revolutions in Egypt and Tunisia and recently stated that, “The wealth of a society matters a lot to the sustainability of democracy. One study suggested that democracies rarely fail in countries with a per-capita gross domestic product of $6,000 or more, but rarely survive when per-capita income is below $1,500. If Egypt is lucky, the country’s future may look most like Turkey – a functioning democracy with a strong Islamist party and a booming economy. If things go really badly, Egypt’s future might look more like Pakistan – an impoverished and dysfunctional democracy, torn between fundamentalists, secularists and a powerful military. Egypt has not yet achieved the wealth of Turkey, but it is significantly richer and less rural than Pakistan. Perhaps its future will lie somewhere in between.”

And this is the real war being fought everywhere – that of economics. There are few systems in place in Afghanistan that can make use of the skills of its population in productive ways – and no one seems to be talking about it. When we talk about development, we end up talking about girls being able to go to school (VERY important, but more high-level symbolism than immediate solution – that change will come when more women are a part of a professional workforce – which will happen when there’s enough of an economy for it.) – we need to figure out ways to engage the population that can and will work with jobs that help build Afghanistan, backed up by an economic framework that makes it more attractive than selling opium. (Creative investment-banking economics would be helpful here, in creating (for now) artificially high valuations that meet expectations. Banks and bankers, are you listening?)


The only way out is through.

When we first started looking at Afghanistan here on TNGG, we specifically pondered what, with this millennial generation coming to the fore, taking over the prosecution of these “wars” and the leadership of democracy over the next decade, is our solution to problems like this one?

Egypt and Tunisia, and the shockwaves rippling across the surface of the Middle East, are proof-of-concept of WikiLeaks – the first pillar of the new world order – the opening up of governments and stripping away much of the artifice with a new radical and militant transparency. What comes after? How will governance evolve? How will international politics deal with the new status quo? (collaboratively, constructively, we hope).

Afghanistan clearly needs better policing and Human Rights development, which is the natural territory of the United Nations. But as importantly, it needs rapid development and innovation in business infrastructure that pulls people out of poppy fields and into organized sectors that can lead to better lives. While there is some thrust from microfinance institutions in the country, where is the Afghan version of Kickstarter, or OpenIDEO, or other innovation engines that will harness the abilities of the people today, and help build for tomorrow?

Nation-building implies government-building, and also economy-building. All the effort seems to have been focused on the former. We now need more of the latter if we’re to turn Afghanistan around over the next decade. (Yes, it will take that long, if not longer.)

If you’re still framing Afghanistan in terms of a war or an occupation, in netspeak, YOU’RE DOING IT WRONG