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Economy of Afghanistan PDF Print E-mail
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Thursday, 26 May 2011 08:57

Afghanistan is an impoverished and least developed country, one of the world's poorest. In 2010, the nation's GDP exchange rate stood at $16.63 billion and the GDP per capita was $1,000. Its unemployment rate is 35% and roughly 36% of its citizens live below the poverty line. About 42 percent of the population live on less than $1 a day, according to USAID.

However, due to the infusion of multi-billion dollars in international assistance and investments, as well as remittances from expats, the economy has steadily improved, growing at approximately 12 percent per year during the past six years. It is also due to improvements in agricultural production, which is the backbone of the nation's economy since over 75% of its citizens are involved in this field.

One of the main drivers for the current economic recovery is the return of over 5 million Afghan expatriates, who brought with them fresh energy, entrepreneurship and wealth-creating skills as well as much needed funds to start up businesses. The Afghan rugs have become a popular product again and this gives the large number of rug weavers in the country a chance to earn more income. While the country's current account deficit is largely financed with the donor money, only a small portion is provided directly to the government budget. The rest is provided to non-budgetary expenditure and donor-designated projects through the United Nations system and non-governmental organizations.

The Afghan Ministry of Finance is focusing on improved revenue collection and public sector expenditure discipline. Since 2003, over 16 new banks have opened in the country, including Afghanistan International Bank, Kabul Bank, Azizi Bank, Pashtany Bank, Standard Chartered Bank, First Micro Finance Bank, and others. Da Afghanistan Bank serves as the central bank of the nation and the "Afghani" (AFN) is the national currency, with an exchange rate of 50 Afghanis to 1 US dollar.

Afghanistan is a member of the SAARC, ECO and the OIC. It is known for producing some of the finest pomegranates, grapes, apricots, melons, and several other fresh and dry fruits, including nuts. According to the World Bank, "economic growth has been strong and has generated better livelihoods" since late 2001. Opium production in Afghanistan has soared to a record in 2007 with about 3 million Afghans reported to be involved in the business but then declined significantly in the years following. The government started programs to help reduce cultivation of poppy, and by 2010 it was reported that 24 out of the 34 provinces were free from poppy grow.

 

Last Updated on Tuesday, 26 July 2011 08:43