Afghanistan's resource flows – the last decade and the next

Afghanistan is on the cusp of what has been dubbed its ‘Transformation Decade’. The past months have seen some major transitional milestones with the inauguration of President Ashraf Ghani and the formation of a unity government, as well as the signing of a major security agreement with the United States and NATO. Against this backdrop, international donors and the Afghan government are at a crossroad to decide the direction of resources to support future security and development when they meet in London on 4 December.

More than three years ago in 2011, GHA released its first report tracking resource flows to Afghanistan. That year, 10 years after the US-led military intervention, international spending in Afghanistan was at its peak: US$6.8 billion was received in official development assistance (ODA) – making Afghanistan the leading recipient of ODA – while international governments spent in excess of US$129 billion on military operations. Since then, although aid has had a troubled history in Afghanistan, a number of significant but fragile gains have been made in health and education. Yet countervailing trends, including rising inequality, insecurity and humanitarian needs, threaten to reverse these fragile gains.

Today, we are releasing our new report, Afghanistan beyond 2014: Aid and the Transformation Decade.Authored by expert in humanitarian aid, co-ordination and policy Lydia Poole, this paper looks at how the international resourcing picture has changed over the past 13 years, and provides data on international and domestic resource flows to contribute to an evidenced debate as to how this might change over the next 10.’.

The report tracks three major areas of international spending that have a direct bearing on the daily lives of Afghan people: humanitarian, development and security spending. It also looks at the domestic resources for security and development, as well as the outlook for sustainable economic growth.

The future of all these international and domestic resources is very uncertain. International military and security expenditure have dramatically declined in recent years, with the emphasis placed now on support for the national security apparatus as international combat troops withdraw. The plan is for Afghanistan to take responsibility for financing its own security by the end of the Transformation Decade in 2024, but domestic revenues have a long way to go to before they can support even the recurrent budgets of the country. ODA continues to remain important, and although some donors have pledged to maintain levels to 2016, longer term commitments are unclear.

Afghanistan faces major challenges at the outset of the Transformation Decade, but it is within the power of international donor governments to ensure that predictable, external financing support to meet humanitarian, development and security needs is not one of them. There are risks associated with the international security scale-down and likely changes in the nature of development partnerships. But there are also opportunities to commit to recalibrated investments that have a greater emphasis on strengthening accountability, and focus on pro-poor support and resilience building to improve outcomes for Afghan citizens.