World Bank Says Any Cuts to Afghan Aid Should Be Gradual, Predictable

A young Afghan boy receives humanitarian supplies. Photo by: isafmedia / CC BY

Any drastic drop in the amount of military and civilian aid provided by donors to Afghanistan in the next few years could force the government to reduce spending on basic services and police and military salaries at the risk of destabilizing the country, the World Bank has warned.

In a new analysis conducted with the Afghan Ministry of Finance, the World Bank estimates the Asian country would need some $7 billion in foreign aid annually over 10 years starting 2014 — when the United States and its NATO allies are expected to finish withdrawing most of their troops from Afghanistan.

The World Bank noted that based on international experience, the withdrawal of international troops leads to reductions in aid. In the case of Afghanistan, the bank warned any abrupt reductions in aid would create a financing gap that leaves Afghanistan with “an increasingly hard budget constraint.”

“When aid declines in these conflict countries, it’s really very important that the decline is gradual and predictable,” said Josephine Bassinette, the World Bank’s country director for Afghanistan, according to The Washington Post. “Any sort of aid shock, where it drops precipitously, or there’s a big cutoff of aid, almost always destabilizes a country.”

Among the possibly destabilizing trade-offs the Afghan government may consider in the event of drastic aid cuts or drops are to shrink the number of Afghan security forces to reduce funding for essential civilian services such as health and education, the World Bank said.

The bank added that the $7 billion-per-year estimate is based on a “cautiously optimistic” scenario where Afghanistan’s agriculture sector has become more efficient, two planned mines are opened on schedule, security does not deteriorate, and taxes are raised, Reuters notes. Otherwise, the financial gap and required foreign aid would be larger, the World Bank said.

Afghanistan received approximately $15.7 billion in foreign military and civilian aid in fiscal 2010-2011 — equivalent to 92 percent of the country’s public spending for the year. The bulk of this aid was from the United States, where lawmakers, particularly in the House of Representatives, are increasingly leaning toward reducing the amount of money the country spends overseas.

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About the author

  • Ivy Mungcal

    As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.