Faced with increased security expenditure amid plummeting revenues, the Afghan government has slashed funds for development projects and stopped all government procurement processes in a mid-year budget review. The Ministry of Finance said they have stopped budget for ‘optional projects,  the projects which are funded by donors but implemented by the government. 

“The electronic identity cards and passport services, as well as the payments of civil service employees and other services by the government, will continue as normal,” Rafi Tabiq, the spokesperson of the ministry was quoted as saying by TOLOnews. 

However, the decision will surely impact the country’s economy, where the role of the private sector is very limited and the government spending mostly drives growth and employment. The two-decade-long presence of foreign troops had also supported the economy to a great extent. Their departure fueled a demand gap in the local market. 

Furthermore, increased fighting all across the country has also affected businesses and shrunk the economy further which is still facing the brunt of the pandemic. 

The fall of several customs posts in towns along the border with Tajikistan, Iran, Turkmenistan also contributed to government revenues loss. The intense fighting on important roads and trade routes dried up bilateral trade. 

On the other hand, the Taliban, the main Afghan insurgent group, are earning from these captured ports. A report in TOLOnews said the group has recently resumed trade operations at the captured ports along the borders with Iran and Turkmenistan. 

(SAM)