Afghanistan to need billions in aid for years, World Bank says

KABUL — The World Bank warned Tuesday that any abrupt cut in foreign aid to Afghanistan over the next several years could destabilize the country and prevent the government from providing basic services and paying for its soldiers and police.

Concern has been growing in Kabul about how the Afghan economy will weather the withdrawal of U.S. and NATO troops starting this year and adjust to lower levels of the foreign aid that now props up the state. This year, Afghanistan received $15.7 billion in aid, most of it from the United States — an amount that accounts for 92 percent of all public spending.

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The new analysis by the World Bank and Afghanistan’s Finance Ministry estimates that foreign donors would have to pay about $7 billion a year for the next decade to cover the Afghan government’s expenditures on its security forces, basic services such as health and education, and development projects. The bulk of the money will be needed for an army and police force that NATO has been building toward a goal of a 352,000-member force. That annual price tag could grow if Afghanistan cannot implement some of its ambitious copper and iron ore mining projects, World Bank officials said.

“When aid declines in these conflict countries, it’s really very important that the decline is gradual and predictable,” Josephine Bassinette, the World Bank’s country director for Afghanistan, told reporters in Kabul. “Any sort of aid shock, where it drops precipitously, or there’s a big cutoff of aid, almost always destabilizes a country.”

Because of its shaky economy and political system, Afghanistan cannot issue bonds to raise funds to cover a fiscal shortfall the way other countries could. The World Bank estimated that the gap between Afghanistan’s expenditures and its revenue will amount to 25 percent of its gross domestic product a decade from now.

“There’s going to have to be a sustained engagement by the international community after the troop withdrawal,” which is expected to be largely complete by the end of 2014, Bassinette said.

The World Bank report estimated that total U.S. spending in Afghanistan over the past decade was as much as $444 billion, including $118.6 billion in fiscal 2011. Most of that is spent on military equipment or U.S. troops’ salaries, but the effect of any drop is still expected to be enormous.

In comparison to what the United States spends now on the war, the $7 billion annual price tag is a small number. But there is growing political pressure among foreign donors for a lessening of the commitment to Afghanistan at a time when their own economies are struggling. Some U.S. military officials and others predict that the Afghan security forces will shrink in coming years in order to lower the financial burden.

White House spokeswoman Caitlin Hayden described the World Bank’s analysis as “very useful,” adding that it would “inform our discussion with the Afghan government about its assistance needs and what will be possible for the U.S. and other international donors.”

The amount of future U.S. funding in Afghanistan is central to the ongoing political battle over the proposed strategic partnership between the two countries. Both sides want to reach an agreement that would keep the United States involved in Afghanistan in the decade after 2014 — and avoid the type of collapse and civil war that followed the Soviet occupation — but the Afghan government wants firm commitments on how much Washington will spend on the Afghan security forces. U.S. officials have said they cannot commit future Congresses or administrations to foreign aid targets.

The World Bank report has been circulated among embassies in Kabul, and officials plan to discuss future funding at the upcoming NATO conference in Bonn, Germany. A U.S. Embassy spokeswoman said the mission had no comment on the report.

 
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