November 2, 2009 - Despite the global economic crisis, domestic political uncertainty, and security problems, Afghanistan maintained macroeconomic stability in 2008-09.
Growth is highly likely to rebound in 2009-10, mainly due to improved performance in agriculture. With the main crop season (May – September) nearly over, cereal production, accounting for three quarters of agriculture, is projected to increase by 74%. As agriculture accounts for a third of the GDP, the overall growth in 2009-10 would be well above 10%.
Progress has been mixed. The government made progress in reforming the revenue component of public financial management and improving the investment climate for enterprises. It introduced, or is in the process of introducing, new laws to regulate the hydrocarbon, mining and banking sectors. Some reforms lagged. The rate of execution of core development expenditures has faltered. Pay and grading reforms, a core part of the reform of the public administration, slipped well behind schedule.
Political and Secuity Situation
On August 20, 2009, Afghans voted to elect their president, for the second time in the country’s history. The deteriorating security situation was a major reason behind low voter turnout.
The Independent Election Commission (IEC) announced results that showed incumbent president Hamid Karzai had won and surpassed the 50% necessary to avoid a runoff against the second placed candidate. However, more than 2,000 major fraud allegations were lodged with the Electoral Complaints Commission (ECC).
On October 21, 2009, the IEC released its final certified results for the first round of the presidential election that left Karzai with less than 50% threshold to avoid a run-off. IEC decided to hold a run-off election on November 7, 2009, between incumbent president Karzai and the second placed candidate and former foreign minister, Abdullah Abdullah. On November 1, 2009, however, Abdullah Abdullah announced that he was withdrawing from the run-off election, effectively leaving Karzai as the President.
Security conditions across Afghanistan are steadily worsening. United Nations data show violent incidents increased by 45% in the first half of 2009 compared to the same period in 2008. In March 2009, the U.S. administration committed to increase U.S. troops in Afghanistan by 21,000, taking the total deployment to 61,000. Security further deteriorated during August, the month of presidential election. The NATO commander for the International Security Assistance Force has proposed further increase of about 40,000 US troops, which is currently under review by the U.S. administration.
World Bank Program in South Asia
Launching pad to all information on World Bank activities in Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.