Economic

Dynamics Of
Afghanistan
Impacts, Challenges, and Opportunities

By Zaland
- Afghanistan is a landlocked country located in South Asia, bordered by Pakistan to the east and south, Iran to the west,
Turkmenistan, Uzbekistan, and Tajikistan to the north, and China to the northeast.

- Population: Approximately 38 million (2020 estimate)

- Historical Context: With influences from Persian, Indian, Central Asian, and Islamic traditions, Afghanistan claims a
rich cultural legacy and has served as a crossroads of civilizations.
GDP Trends Over the Past Decade:

- Afghanistan's GDP has shown fluctuating growth over the past decade, with an average
annual growth rate of around 2-3%.

- GDP in current US dollars:

- 2011: $17.86 billion

- 2020: $19.83 billion (67% increase)

- Source: World Bank

- Major Sectors Contributing to GDP:

- Agriculture: Contributes to around 25% of GDP and employs the majority of the population.

- Industry: Contributes to around 21% of GDP, with manufacturing and mining being the key
subsectors.

- Services: Contributes to around 54% of GDP, driven by trade, transport, and

telecommunications.

- Source: Afghanistan Central Statistics Organization (CSO)

 Factors Affecting Afghanistan's Economy
● Conflict and Security: ● Trade and Transit:

- Ongoing conflict has resulted in significant economic
disruptions, hindering investment and development.
- The cost of conflict-related violence was estimated at $14.9
billion in 2019, equivalent to 43.3% of GDP.
- Source: Institute for Economics and Peace (IEP)
- Afghanistan heavily relies on trade, particularly with
neighboring countries such as Pakistan, Iran, and Central Asian
states.
- Trade disruptions due to geopolitical tensions and border
closures have impacted Afghanistan's economy.
- Source: World Bank

● - Political Instability:

- Political instability and governance challenges have led to

corruption and inefficiencies, deterring foreign investment.

- Afghanistan ranked 165th out of 180 countries in Transparency

International's Corruption Perceptions Index 2020.

- Source: Transparency International

Education System:
- Afghanistan has made progress in expanding
access to education since 2001, but challenges
remain, especially for girls and in rural areas.
- Net enrollment rate in primary education:
- 2001: 43%
- 2020: 62%
- Source: UNESCO
Human Capital Development:
- Investment in education and skill development is
crucial for improving productivity and driving
economic growth in Afghanistan.
- However, the quality of education needs
improvement, with literacy rates still low.
- Adult literacy rate:
- Male: 45%
- Female: 17%
- Source: Afghanistan Central Statistics
Organization (CSO)
 Brain Drain and Migration:
● Brain Drain:
- Afghanistan has experienced significant
brain drain, with skilled professionals leaving
the country in search of better opportunities
abroad.
- The brain drain is exacerbated by factors
such as insecurity, lack of job prospects, and
political instability.
- Source: International Organization for
Migration (IOM)
● Refugee Crisis:
- Afghanistan has one of the largest refugee
populations globally, with millions seeking
asylum in neighboring countries and beyond.
- As of 2020, there were over 2.6 million
registered Afghan refugees worldwide,
primarily in Iran and Pakistan.
- Source: UNHCR