Money Counts Even When There is no Money to Count

By:Dr. G. Rauf Roashan

Apart from many political, military, security and social problems that face the Afghan nation, one that is at the base of it all is the question of money. To rebuild a country and or to build anything for it money is needed. Governments get the money they need from taxes they levy and revenues they collect. Taxes become due when income is generated by the economy. Individuals and companies both are covered by this principle. Income is generated when there is national peace and security prevailing and consumers are able to buy into the market and purchase either goods or services. How much of these basic prerequisites is available in Afghanistan today is a many billion dollar question. Let us have a look at the figures that are available from official sources:

Afghanistan's ordinary budget was approved for the year 1381 in Solar Afghan Calendar that began on March 21, 2002. It shows a lot of prudence on the part of the then Interim Administration to come up with the figures. And the figures were very interesting as they gave direction to the way of thinking of the new government. For example the Ministry of Finance figures showed that there was a huge difference between domestic revenue and expenditure. The budget stated that total domestic revenue consisting of domestic revenue base estimate and proposed revenue measures would amount to US $83.3 Million. On the other hand expenditures including personal service compensation, other expenses, extraordinary expense and contingency amounted to US $460.3 Million. This resulted in a deficit of US $377.0. Added to this was the Afghan Year 1380's salary arrears that amounted to US $22.5. Net deficit figure thus was US $399.5 Million or almost $400 million.

If everything else was normal in the country, this government in order to meet its ordinary fiscal budget needed foreign aid to the amount of $400 million. But everything in the country is not normal. The economy is not stimulated enough to generate income so that collections by the government would increase. Land that is available is not tilled because of the protracted drought, displacement of farmers, the problem of landmines and awaiting for the petit land owners to return from their refuge in the neighboring countries. Even when they return they need tools, seeds, fertilizers and water. All of these areas are in need of professional assistance that the government should procure.

On the other hand employment is not generated at a level to increase government income through taxation. There is still a need for the establishment of small and large businesses to employ workers and to put out products for both domestic consumption and export. The government needs to encourage this. But it needs foreign help in this area as well. Investment under conditions of war seem risky to many entrepreneurs especially when they bring in international businesses. Local investors at the present do not have enough capital and probably not enough experience to launch projects that would definitely be profitable for them and the nation.

Furthermore, government income means income from all parts of the country namely from all provinces. Presently the structure is so that the warlords who run richer provinces levy a variety of taxes, local and otherwise that are not regulated. The money goes to the provincial treasury that so fat is in the hands only of the provincial governor or the warlords. From time to time, some of these governors have promised to send some money to the capital. But a promise is not a law and revenues need to be regulated equitably without consideration of factors such as geography, ethnicity etc. The national government needs to streamline this issue as well.

Most of these problems exist as a byproduct of two decades of war in the country that destroyed the established working system of revenue collection. But meeting the caps of ordinary budget at this time is a must. It requires the central government to also achieve financial unity for the whole of Afghanistan.

In addition, the country needs also to meet its developmental budgetary objectives. That is another area of importance that this article has not scrutinized. These objectives to a great part were dependent on international aid. This aid was promised repeatedly by the world, but is yet to be fully made as per the pledges that were made in Tokyo and in many other international meetings, conferences and discussions.

Therefore as we see, in matters of ordinary and developmental administration of any country, money counts, but first it has to be there to be counted. If a prosperous Afghanistan, as is justly believed, is essential for regional and international peace, then the international community should come to its rescue at its time of need which is now and contribute to its peaceful running and reconstruction 8/23/02