Video Duration 25 minutes 37 seconds
From: Inside Story

Will more money solve Afghanistan’s problems?

As $16bn of international aid is pledged to the country, we ask if it is just another dose of painkiller.

Donors at a conference on Afghanistan have pledged to give it $16bn in civilian aid over four years, in an attempt to safeguard its future after foreign forces leave in 2014.

“We see this as a statment of broad and firm international support for long-term peace, stability and security [and] also economic development and progress in Afghanistan …. This, we believe, is the beginning of a renewed partnership between Afghanistan and the international community.

– Janan Mosazai, Afghan foreign ministry spokesman

The pledge came as Afghanistan agreed to new conditions to deal with endemic corruption.

The Afghan economy relies heavily on international development and military assistance, becoming particularly dependent on foreign donations since the US invasion in 2001.

It is one of the world’s 10 poorest countries and has received nearly $60bn in civilian aid since 2002.

According to the World Bank, foreign aid makes up to 97 per cent of the country’s gross domestic product.

And 90 per cent of the Afghan government’s funding comes from foreign sources – which as the World Bank has warned – makes it particularly vulnerable to economic collapse if international donors pull funding too fast.

“There is uncertainty about the future, there is a sense of worry on the part of the Afghan people. There is still an insurgency … that is nagging and that is taking space that should otherwise be used for development and growth in Afghanistan …. We can pledge as much as we want to but as long as the security situation in Afghanistan is not taken care of and as long as there is no reconciliation that would be just and fair and acceptable to the Afghan people eventually then all of these attempts will have minimal impact. [And] we need to prioritise correctly.

– Omar Samad, former Afghan foreign ministry spokesman and former Afghan ambassador to Canada and France

According to the World Bank and the Organisation for Economic Co-operation and Development (OECD), the US is by far the largest donor with official development assistance reaching nearly $3bn between 2009 and 2010.

Japan, the second-largest donor, gave over half a billion dollars to Afghanistan during the same period, and is expected to provide up to $3bn by 2016.

Germany and Britain come next as major donors – they said they will maintain aid funding levels to Afghanistan.

Its neighbouring countries are also among the 70 countries and organisations attending the donors’ conference. It is hard to verify figures but Iran said, in 2010, it provided $500m for reconstruction projects such as religious schools.

And Pakistan announced in May this year that it gave $20m to help the country ‘build itself and fight against the militants’, this money was used to support Afghan security forces.

As for India, it recently pledged $500m in aid – a move likely to raise Pakistani fears about Indian influence in Afghanistan.

So, why does the world continue to be so generous with Afghanistan despite past blunders?

Inside Story, with presenter Sohail Rahman, discusses with guests: Janan Mosazai, the spokesman for the Afghan foreign ministry; Waheed Omer, a political commentator and former spokesman for the Afghan president Hamid Karzai; and Omar Samad, from the the think tank, US Institute of Peace, also a former spokesman for the Afghan foreign ministry and a former Afghan ambassador to Canada and France.

“Just as we met in Chicago three months ago to safeguard Afghanistan’s security future, today we have chartered a way forward for Afghanistan’s economic requirements. I believe we have made a good committment to putting Afghanistan on a path to economic self-sufficiency. As Afghanistan’s capacity and revenues increase, our contributions can decline.”

Hillary Clinton, the US secretary of state



  • Conference held in Tokyo to discuss long-term aid for Afghanistan
  • Tokyo conference attended by about 70 countries and organisations
  • Afghanistan expected to get more than $16bn in aid over next four years
  • The biggest donors are the US, Japan, Germany and the UK
  • The World Bank says aid makes up more than 95 per cent of Afghanistan’s GDP
  • Afghanistan has received nearly $60bn in civilian aid since 2002
  • Economy and aid are major issues before troop withdrawal in 2014
  • The US has declared Afghanistan a ‘major non-NATO ally’
  • US secretary of state Hillary Clinton went to Kabul ahead of Tokyo summit
  • President Karzai has pledged to fight corruption with ‘strong resolve’
  • Afghan Central Bank: $6bn a year needed over the next decade
  • World Bank: Afghanistan is one of the world’s ten poorest countries
  • Donors are expected to monitor if the aid is not wasted by corruption
  • The US has spent almost $19bn in aid to Afghanistan over the past decade