The government is in dire need of money to pay salaries, and has appealed to the international community for urgent assistance before the year ends.
Ministry of Finance (MoF) has calculated the shortfall at 537 million USD. So far only 170 million USD has been forthcoming from aid donors. Abdul Qader Jailani, the MoF spokesperson, said negotiations are on with the UN and donor countries to bail out the government. The treasury chief Haji Mohammad Aqa has in no uncertain terms spelt out that there is no money to pay salaries to teachers, civil servants and other government workers this month.
The budget crisis has been blamed on the uncertain political situation and growing insecurity that has only worsened what was predicted would be a tough year with the pullout of foreign troops and shrinking of aid budgets. The government had not anticipated a prolonged election that would delay the signing of the Bilateral Security Agreement with the US, Jailani said. This year’s earnings were 25 percent less than planned expenditures, the treasury chief has said.
Earlier Hazrat Omar Zakhilwal, acting finance minister and national finance adviser to President Ashraf Ghani, said the lengthy election process, which saw business grind to a halt with many investors pulling out of the country, had cost the government a loss of 5 billion USD.
According to Zakhilwal, the budget for the financial year, that starts at the end of Jadya (Dec 22), was calculated on the basis of the government earning 2.3 billion USD and the remaining, 7.4 billion USD, coming from external sources.
Next year
The budget for the new fiscal year has been sent to Parliament for approval. Budget presentation was delayed by 22 days, but Amir Khan Yar, head of the parliamentary finance commission was hopeful lawmakers would take a decision before they break up for winter vacations. “Parliament needs one month to approve the budget … If it fails approval would be delayed until the next session,” he said.
Government expenditure in the draft budget has increased this year to sine 8 billion USD that includes 4.8 billion USD for expenses including on salaries and 3.2 billion USD for development purposes. Money for new infrastructural projects has been pitched at 100 million USD with 87.6 million USD for ongoing projects.
Yar said lawmakers want to see a “people’s budget”, one that takes into consideration the “needs of people”. “In the last budget the needs of people were not taken into consideration,” he said. He also issued an appeal to aid donors to deliver on promises to generously fund the government – promises that were repeated at the December conference in London on Afghanistan of some 70 nations and organisations whose donations help keep the country financially afloat. “Unless the international community helps, projects would remain incomplete,” Yar said bluntly.
Two years ago at the Tokyo conference on Afghanistan the international community had promised to give 16 billion USD for reconstruction to Afghanistan between 2012 and 2015. (In May the same year donors had promised to provide around 4 billion USD a year for local military and police forces.) The pledges were linked to the Hamid Karzai government showing concrete improvements in governance, in the fight against corruption and in the strengthening of civil rights – particularly for women. The 16 billion USD – which works to 4 billion USD annually – was close to what the World Bank had calculated Afghanistan needs to close the gap between how much money it can afford and how much it needs to sustain the transition phase.
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