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Afghanistan Afghanistan

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Afghanistan

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EconomicPoliticalStructural

Euromoney Country Risk editor’s view

Since the beginning of the 20th century Afghanistan’s history has been characterized by conflict, tribal warfare, political and ideological struggles. In December 2004 Hamid Karzai became the first democratically elected president, since the fall of the Talban regime in 2001. Efforts by the Afghan government to create a stable political and economic environment on a national level has been continuously undermined by a resurgent Taliban and continuing provincial instability, particularly in the south and east of the country.

Afghanistan’s booming opium industry can be directly linked to illicit drug trade and production and the funding of insurgency efforts. This remains a significant challenge for long-term security, effective governance and economic development. Afghanistan’s economy was left in ruins after decades of conflict and is on the UN list of least developed countries. Aid and development assistance have helped economic conditions especially in the agriculture and service sector, however high poverty levels and lack of basic infrastructure still make them highly dependent on aid.

The government is faced with the major challenge of overcoming low revenue collection, an anemic job market, high levels of corruption, a weak government capacity, a poor infrastructure and achieving long term political stability.

Afghanistan – Quick View
ECR score23.65 (Mar 2011)
ECR rank151 (Mar 2011)
Economic
GDP, 2009-10USD 13.49 billion
GNI per capita PPP, 2008USD 860
FDI inflow, 2009USD 185 million
Inflation, 2009-10-4.5%
Central bank assets, 2010USD 4,647.34 million
Unemployment rate40%
Government deficit, 2010USD 157.63 million
Tax revenue, 2009-10USD 864.28 million
Political
Government typePresidential System
Recent political crisisWar (2001 to present)
Economic freedom score, 2011NA
Freedom of information score147th
Corruption perception index176th
Structural
Birth rate, 200846.5 per ‘000
Population balanceBelow 14 years – 46.1%
Population balanceAbove 65 years – 3.7%
Life expectancy yearsMales – 43.9 years
Life expectancy yearsFemales – 43.8 years
Mortality rate, 200819.6 per ‘000
Literacy rate, 201028%
Internet access, 20081.8 per ‘00

[Top] Economic Overview

Gross Domestic Product 

Afghanistan's Gross Domestic Product at market prices is estimated at AFN 627.39 billion in 2009-10, an increase of 15.9% compared to the previous year. The real GDP growth rate declined to 2.3% in 2008-09 and is estimated to increase by 17.1% in 2009-10. The agricultural sector accounted for 32.5% of total GDP, followed by industries sector which contributed to 22.1% of total GDP and the services sector accounted for 45.4% of GDP.

Afghanistan GDP and Real GDP growth rate 

(Source: National Statistics, National Statistics1)

GDP per capita in 2009-10 was USD 500 compared to USD 426 in 2008-09.

Gross National Income (GNI)

Afghanistan’s GNI per capita at PPP in the year 2010 was USD 1,419 compared to USD 973 in the year 2005.

(Source: UNDP)

Income Tax Rate

The highest tax rate on individual income is 20%.

(Source: heritage.org

Corporate Tax Rate

The standard corporate tax rate in the country is 20%. 

Tax  Rate

Tax Contribution

StatutoryTax

Sales tax

2%

Road toll tax

AFN 7,500

Fuel

5%

 
Inflation Rate
 
Inflation rate in 2009-10 was recorded at -4.5% compared to 4.9% in 2008-09.

Afghanistan inflation rate

(Source: National Statistics)

Foreign Direct Investment Inflows

Foreign Direct Investment Inflows in 2009 amounted to USD 185 million compared to USD 300 million in 2008.

(Source: UNCTAD)

Bank Sector Assets 

The bank sector assets increased by 7.5% in March 2010 as compared to previous year amounting to AFN 216,110 million.

Bank Assets (AFN ‘000)

Assets

March 2010

Gold Reserve

37,611,073

Foreign currency cash reserve

9,364,304

Due from banks and financial institutions

92,128,701

Investments

59,823,491

Advances and other receivables

100,648

Investment property

4,800

Property and equipment

4,030,361

Intangible asset

13,073

Other assets

13,033,560

Total Assets

216,110,011

(Source: Central Bank)

[Top] Financial Indicators & Government Financial

Consumer Price Index

Consumer Price index was registered at 156.4 in March 2010 compared to 158.6 in April 2009.

Afghanistan consumer price index

(Source: National Statistics)

Interest Rate

The interest rate on overnight deposits was 6.33% in March 2009 compared to 13.53% in March 2008.

 (Source: Central Bank)

 Money Supply

Narrow money (M1) amounted to AFN 214,354 million and Broad money (M2) amounted to AFN 230,439 million in Q1 2010.

(Source: Central Bank page: 31)

Afghanistan money supply

(Source: Central bank, page: 49)

Government Expenditure

The government’s expenditure in the year 2010 is estimated at AFN 171.24 billion compared to AFN 135.05 billion in 2009.

Afghanistan government expenditure

(Source: IMF)

Exchange Rate

Exchange rate AFN/USD in 2009-10 was registered at 49.16 compared to 50.85 in 2008-09.

Afghanistan exchange rate

 (Source: National Statistics)

Government Financial Well-being

Fiscal Balance

The fiscal deficit for the year 2010 is estimated at AFN 7.33 billion compared to AFN 8.66 billion in 2009.

Afghanistan fiscal balance

(Source: IMF)

Total Revenue

The total revenue for the year 2010 is estimated at AFN 163.91 billion compared to AFN 126.39 billion in 2009.

(Source: IMF)

Tax Revenue

In 2009-10, tax revenues were registered at AFN 40,190.7 million, a decrease of 3% compared to the previous year.

 

Tax Revenue (AFN million)
Taxes 2009-10
Tax on Incomes 10,415
Taxes on Goods and Services 10,030
Tax on International trade 16,049
Other Revenues 3,696.7
Total Tax Revenue 40,190.7

(Source: National Statistics)

Current Account Balance


The country is expected to record current account surplus after two consecutive years of deficit. The current account surplus is estimated at AFN 107 million or 0.64% of the GDP.


Afghanistan current account balance

(Source: IMF)

Balance of Payments

Afghanistan’s Balance of Payments (USD million)
Year 2008-09 2007-08 2006-07
Current Account Balance (including grants) -181 85 -379
Current Account Balance (excluding grants) -7,087 -6,425 -5,406
Trade balance -6,658 -6,002 -4,933
Services and income, net -429 -423 -473
Current transfers 6,906 6,510 5,027
Capital and financial account 121 25 194
Errors and omissions 420 370 405

(Source: Central Bank)

[Top] Labour Force and Employment Overview

Labour Force

The total labour force in 2008 was 9,303,902.4, an increase of 3.2% compared to the previous year.

(Source: World Bank)

Labour Force Participation Rate

In 2008, labour force participation rate for males and females was recorded at 88.6% and 28.5% respectively.

(Source: World Bank)

Unemployment Rate

The Labour Ministry estimates the unemployment rate at more than 40%.

(Source: UNHCR)

Minimum Wage

The monthly minimum wage in Afghanistan for government workers is AFN 4,000 and for private sector workers is AFN 2,000.

(Source: minimumwage.org)

Level of Unionisation

The total number of union members in Afghanistan is 361,279. The trade unions in the country include:

  • Central Council of National Union of Afghanistan Employee
  • Afghanistan Journalists Union
  • Afghanistan Craftsmen Union
  • Afghanistan Farmers Union
  • Afghanistan Lawyers Union
  • Afghanistan Doctors & Health Staff Union
  • Democrat lawyers Union

(Source: National Statistics)

[Top] Political Stability

Consumer Price Index (CPI)

The consumer price index in February 2011 was registered at 111.4 compared to 108.1 in 2010. Annual CPI was recorded at 109.5 and 107.5 in the years 2010 and 2009 respectively.

Austria Consumer Price Index


[Base Year: Index Base 2005=100]

(Source: National Statistics, National Statistics1)

Wholesale Price Index

The annual wholesale price index in 2010 was registered at 110.8 compared to 105.5 in 2009.

Austria Wholesale Price Index

 (Source: National Statistics)

Interest Rate on Savings Deposit

Interest on Savings Deposit, 2010 (%)

Interest Rate

Up to 1 year

1-2 year

Above 2 year

On Households

1.12

1.59

2.17

(Source: Central Bank)

Interest Rate on Time Deposit


Interest Rate, 2010 (%)

Interest Rate

Up to 1 year

1-2 year

Above 2 year

On Households

1.08

1.61

2.16

On Financial Corporations

0.86

1.59

2.4

(Source: Central Bank)

Money Supply

Money Supply M3 for January and February 2011 amounted to EUR 9,494.3 billion and EUR 9,543.3 billion respectively.

Money Supply (EUR billion), 2010

Time Period

M1

M2

M3

Jan

4,539.9

8,210.6

9,321.0

Feb

4,562.5

8,227.3

9,326.5

Mar

4,577.9

8,234.2

9,342.6

Apr

4,625.2

8,258.2

9,375.3

May

4,643.1

8,286.5

9,392.9

Jun

4,663.2

8,309.7

9,434.8

Jul

4,684.3

8,332.7

9,441.4

Aug

4,724.3

8,395.1

9,509.6

Sep

4,688.4

8,375.5

9,496.9

Oct

4,691.4

8,400.0

9,476.2

Nov

4,695.2

8,402.8

9,538.3

Dec

4,705.9

8,400.1

9,524.

(Source: National Statistics)

Public Debt


The public debt as a percentage of GDP was registered at 66.5% in 2009 compared to 62.6% in 2008.

(Source: National Statistics)

Government Expenditure
 

Total government expenditure for the year 2010 amounted to EUR 150,401 million. The government expenditure in 2010 was 53% of the GDP.

(Source: National Statistics, National Statistics)


Exchange Rate

The exchange rate of EUR per USD in 2010 was registered at 1.32 compared to 1.4 in 2009.


Austria Exchange Rate

(Source: Central Bank)

 

[Top] Demographic Overview

Total Population

The total population in 2009-10 was registered at 23.99 million, an increase of 2.04% compared to the previous year.

Individuals below 14 years of age constituted 46.1% of total population and people above the age of 65 years accounted for 3.7% of total population.

(Source: National Statistics, National Statistics1)

Gender Balance

Representation of gender in the country is not equal. The male population in 2009-10 was 12.27 million, constituting 51.5% of the total population. Females accounted for 48.9% of the total population and was registered at 11.72 million.

The gender ratio was 107.4 men per 100 women in 2009.

(Source: National Statistics, UN)

Afghanistan population by gender

Mortality Rate

Infant mortality rate in 2005-2010 period was recorded at 157 per 1,000 live births. Birth rate and death rate were registered at 46.5 per 1,000 individuals and 19.6 per 1,000 individuals respectively in 2008.

(Source: UN, ruralpoverty.org)

Average Life Expectancy

The life expectancy at birth for an individual in the country was 44.6 years. Average life expectancy for males and females was 43.9 years and 43.8 years respectively in the 2005-2010 period.

(Source: UNDP, UN)

Migration and Urbanisation

The total urban population was recorded at 5.51 million. Males and females accounted for 51.5% and 48.5% of total urban population respectively.

(Source: National Statistics)

The total international migrants at mid-year was 90,883 in 2010. The total male and female migrants at mid-year were 51,295 and 39,588.

(Source: UN)

Racial/ Ethnic Environment

Pashtuns are the major ethnic group, accounting for 50% of the total population. The other ethnic groups include Uzbeks, Tajiks and Hazaras.

(Source: BBC)

Poverty and Inequality

As of 2007, 42% of the population in the country was below the national poverty line. The poor population in the rural areas was registered at 10.14 million in 2009. The major causes of poverty in Afghanistan include a high illiteracy rate, lack of irrigation facilities and inadequate land ownership.

(Source: ruralpoverty.org)

Human Development Index

Afghanistan is ranked 155thon the Human Development Index 2010 with a score of 0.35. The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by purchasing power parity, PPP, income).

(Source: UNDP)

 

[Top] Soft Infrastructure

Literacy Rate

The adult literacy rate in Afghanistan is estimated at 28% for the year 2010.

(Source: UNDP)

Education Resources

In 2009-10, the country had 11,990 schools. The total number of students and teachers were 6,602,616 and 156,066 respectively. There were 331 kindergartens and nurseries, 34 universities and 32 technical and vocational institutes. 

Education Indicators, 2009-2010

Level

Primary

Secondary

High School

Government

Private

Government

Private

Government

Private

Students

4,766,807

1,271

1,23,4519

8,626

416,593

27,017

Teachers

36,945

69

44,501

133

68,188

1,061

Number of Schools

5,157

8

3,690

31

2,474

12

(Source: National Statistics)

Expenditure in education amounted to AFN 14,109.8 million in 2009. The year on year growth rate was recorded at 34.2% in 2009 over the previous year.


(Source: National Statistics)

Healthcare Resources

The healthcare quality in Afghanistan is low and lacks resources. There were only 2 doctors per 10,000 individuals and 5 beds per 10,000 people in 2009-10. Infant mortality rate is 111 per 1,000 live births and maternal mortality rate is 1,600 per 100,000 live births. The major causes of death include malnutrition, malaria, respiratory infections and diarrhoea. In 2008, only 39% of the rural population had access to clean drinking water.

Healthcare Resources

Indicators

2009-2010

Number of Hospitals

131

Number of Doctors

6,037

Number of Beds (per 10,000 individuals)

5

Basic Health Centres

92

(Source: National Statistics page: 7)

The total health expenditure was AFN 1,846.4 million in 2009-10, accounting for 1.9% of total budgeted expenditure. The year on year growth rate was recorded at 15.5% in 2009-10 compared to the previous year.

(Source: National Statistics)

[Top] Hard Infrastructure

Mass public transit

The various means of public transport in Afghanistan include buses, private and passenger cars, rickshaws, and motorcycles.

(Source: National Statistics, PDF: services)

Roadways

The total roads length stretched to 1,686 km in 2008-09. Asphalted, sand-roofed and repaired roads extended to 1,132 km, 549 km and 5 km respectively.

(Source: National Statistics)

Airports

Airport Name

Town

Runway Length (ft.)

Bamyan

Bamyan

4,700

Bost

Bost

6,500

Chakhcharan

Chakhcharan

5,900

Darwaz

Darwaz

2,200

Faizabad

Faizabad

6,500

Farah

Farah

6,500

Herat

Herat

8,200

Jalalabad

Jalalabad

6,000

Kabul

Kabul

11,400

Kandahar

Kandahar

10,400

Khojaghar

Khojaghar

7,800

Khost

Khost

6,500

Khwahan

Khwahan

2,200

Kron Monjan

Kron Monjan

2,900

Kunduz

Kunduz

6,500

Maimana

Maimana

6,500

Mazar

Mazar-I-Sharif

10,400

Qala-I-Naw

Qala-I-Naw

6,800

Sheberghan

Sheberghan

6,800

Sheghnan

Sheghnan

2,400

Tereen

Tereen

5,000

Zaranj

Zaranj

6,50

(Source: aircraft charter world)

Telecommunications Network

Internet subscribers were recorded at 1.8 per 100 individuals in 2008.

(Source: UN)

 

Year

September 2010

2009-10

Fixed-line Services

Total Subscribers

63,533

140,205

Mobile telephone

Total subscribers

14,952,182

12,636,817

 

(Source: Ministry of Communication, National Statistics)

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