Kabul in economic crisis

Donors to pledge $16bn aid

GMT 13:42 2012 Saturday ,07 July

Arab Today, arab today Donors to pledge $16bn aid

Afghan. president, Hamid Karzai
Tokyo - Agencies

Afghan. president, Hamid Karzai Tokyo - Agencies Donors at a major development conference for Afghanistan will pledge total aid of more than $16 billion for four years to 2015, Japanese Foreign Minister Koichiro Gemba said Saturday. Japan, which will co-chair the one-day conference on Sunday with Afghanistan, will provide up to $3 billion for the five years to 2016, in addition to $1 billion for the war-torn nation’s neighbouring states, he said. The total pledge of more than $16 billion will include part of the aid to be declared by Japan, he said. “This scale of pledge will satisfy the fiscal gap that the World Bank and the Afghan government have said would be needed for the development of the country,” he said. Afghan President Hamid Karzai, who will be in Tokyo along with US Secretary of State Hillary Clinton and United Nations chief Ban Ki-moon, has called for $4 billion a year in civilian aid, amid fears donations could dry up when NATO pulls out in 2014. Gemba’s announcement came hours after Clinton said the United States had designated Afghanistan a major non-NATO ally, giving the war-torn country special privileges. Clinton announced the move, which provides a long-term framework for security and defense cooperation, during a brief visit to Kabul where she had a breakfast meeting with President Hamid Karzai. “We see this as a powerful symbol of our commitment to Afghanistan’s future,” Clinton said at a news conference after talks in Kabul with Karzai. Tens of billions of dollars have poured into Afghanistan since the US-led invasion that toppled the Taliban in late 2001, but graft is rife from local police to high officials, and patience among donor countries is wearing thin. A principle of “mutual accountability” will be stressed at the 70-nation meeting, making continued payment of aid conditional on Kabul making progress, particularly on transparency. After more than 30 years of war, the Afghan economy is weak and the country cannot survive without foreign aid. According to the World Bank, spending on defence and development by donors accounted for more than 95 percent of GDP in 2010-11. Without a functioning economy, Kabul covers only $2 billion of the $6 billion it spends each year not counting security costs, said a Western diplomat, with donor countries making up the difference.

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