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Per capita does not show performanceWritten by Mohammad Reza Gulkohi
Monday, 20 June 2011 10:40
Per capita income of Afghans has increased from $199 in 2002 to $599 in 2011 but the benefits of the increase have not been spread widely within the Afghan population, a large section of which remains at the subsistence level.
According to Emal Ashoor Afghan, spokesman of the Da Afghanistan Bank, the Afghan National Domestic Income reached $4 billion in 2002 and is now $17 billion, proving that there had been an improvement in the living conditions of Afghans and improvement in the delivery of social services and public facilities. Per capita income is a barometer of the prosperity of a society, he says, citing the examples of the high per capita incomes in China and the U.S.
However not everyone agrees. While some questions the statistics, others feel much greater economic growth could have been achieved given the resources available, and yet others question whether the per capita calculation can actually measure the living conditions of a society.
"Afghanistan was in the 117th position in 2003 in terms of global economic growth but it has now fallen down to 174th position because of the wastage of billions of dollars flowing to the country."
Per capita, says Ashoor, is calculated by "dividing the gross domestic income by the nation's population".
Mohammad Essa, a young man who works as a labourer and only makes enough to feed his family is not convinced by the fancy figures: "In fact, announcing the increase in the rate of per capita income only justifies the Afghan government's inefficiency and failure." The figures, he says, will remain meaningless until and unless there is a perceptible positive change in social services and public utilities.
Ashoor however defends the statistics arguing that in the open market economy such statistics cannot capture the individual's living conditions, but do reflect the national well-being. "Generally the per capita income shows, for instance, the purchasing ability, rate of saving and consumption of goods. For some of the citizens this has increased and on the other hand these facilities have decreased for some others. "
But according to Hamid Bashir Hatef, an economic expert, the per capita income should be calculated by separating society into different social strata in order to get a more real picture of the well-being of people. Hatef taps into a long-standing global debate about the efficacy of per capita figures in capturing the well-being of a nation since it does not show the distribution of income.
Though agriculture plays a major role in Afghanistan's economic development with an estimated 80% of the population dependent on it, experts say not enough has been done to develop this sector.
According to Massoud, the fact that the Salma dam is still being built after ten years is evidence of the inefficiency of the Afghan government's strategy in ensuring agriculture development and availability of power for industrial use. "We need at least 7 water dams across the country in order to provide agriculture water and electric power for homes and industry", he says.
Economic plans absent
"Our consumer economy has made us completely dependent on foreign markets for imports even while the Afghan government's decision to go in for an open market system and a free market economy has resulted in damage to our own economy", says Massoud.
Ten years after the intervention of the international community Afghanistan still does not have the basic infrastructure necessary for minimum development of its economy. Despite a fertile land and high quality of produce, the linkages to the market are insufficient. Livestock and poultry products from neighboring countries are cheaper in the Afghan market in comparison to Afghan products.
The absence of assured power supply has meant that Afghanistan cannot manufacture the simplest goods of daily use, depending on imports of good which are often overprices or substandard for the captive consumer market.
According to recent estimates 80% of the Afghan population is living at the subsistence level. Economic experts say this places Afghanistan among those countries with the lowest living standards.
"Rather than providing emergency food aid to the Afghan population, which is displaced or suffering by drought and famine, there should be efforts to find ways to prevent the famines, such as providing economical water sources," says Hamid Basher Hataf, an economic expert.
"There should be serious efforts to make the domestic economy independent and to raise gross domestic production by providing modern agriculture equipment to land-owners on loan and providing long term and medium term financial loans to landowners as well as manufacturers," he says. Other measures include paying fair salaries, controlling prices and making economic policies with long term vision for the country.
Afghan economic experts also emphasize the fact that the country had a unique opportunity in the international aid it was receiving and this could be used to wage a battle against poverty through effective and long term plans.