The Economics of Peace in Afghanistan

In settling the Afghan war, the government and donors should seek to eschew the pattern of unkept promises that has bedeviled reconstruction of the country in the past. Only then will Afghanistan be able to break out of its decades-long vicious circle of violence, insecurity, corruption, unemployment, drug trafficking, and aid dependency.

KABUL – Suicide bombings, assassinations of top Afghan leaders, brutal attacks on Charikar and other places close to Kabul, Afghanistan’s capital, and a rapid increase in civilian deaths from drone attacks are jeopardizing the withdrawal of American and NATO forces from the country. So pervasive has the violence become that Ahmed Rashid, the renowned expert on the Taliban, has concluded that speeding up the peace process through dialogue with the insurgents is the only option.

The economics of what an Afghanistan at peace would look like must be a critical part of any negotiations. But what, precisely, does the economics of peace entail, and why is it so important?

One main objective should be to transform Afghanistan’s vast underground economy, which has thrived, despite the large number of NATO forces, by creating profitable opportunities for Taliban and other groups involved in the fighting. To reintegrate these fighters into the productive economy will require a change in policies, including a rapid reactivation of rural development schemes and the promotion of local entrepreneurship, public works, and other legal activities.

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