A quick internet search of 1960s Afghanistan reveals a society that is unrecognizable today. Sixty years ago, Afghanistan was flourishing. Women and men intermingled, and girls attended coeducation schools. Then, following a series of coups, the Soviet invasion and the American-backed Taliban, Afghanistan fell under strict Islamic rule. A dramatic reduction in personal freedoms, access to education, food, and healthcare followed, while extreme poverty and religious rule have resulted in broad social exclusion, hunger, and a lack of basic needs. These issues are difficult to solve, and Afghanistan lacks much of the necessary infrastructure to deliver services at scale, however marginal improvements in living conditions are possible. This essay examines various local approaches to relieving poverty while remaining clear of systemic challenges such as infrastructure and governance.
Background
Landlocked and sharing long borders with Pakistan and Iran, Afghanistan sits in Central Asia, about 200 miles from the Arabian Sea. The region contains modest reserves of petroleum, natural gas, and mineral deposits. Traditional exports include low volume production of textiles, food products, and a variety of goods from furniture to shoes (CIA, 2023). The most widely publicized export under the Taliban’s first ascent to power was opium, however the United Nations Office on Drugs and Crime reported that as of 2023, poppy production (as measured by land under cultivation) had declined by 95%, primarily due to a self-imposed ban on poppy farming (UNODC, 2023).
Poverty continues to define the Afghan way of life, however. According to the Multi-dimensional Poverty Index, Afghanistan’s 55% poverty rate in 2016 was the highest in the world (UNDP, 2023, p. 6). The country’s HDI score was similarly grim, ranking Afghanistan 180th out of 191 (UNDP, 2021, p. 274). Furthermore, according to the UN’s news agency, 95% of Afghans aren’t getting enough to eat (United Nations, 2022). In other words, there aren’t a diversity of options for Afghans facing extreme poverty and starvation.
Poor governance has plagued the country as well, with allegations of corruption widely reported during the West’s occupation of Afghanistan, and equally well documented oppression under the current Taliban regime. Further complicating matters is the Taliban’s isolation from the global community. This isolation, rampant poverty, and the freezing of over $7 billion in national assets by the United States, has left acting prime minister Mohammad Hassan Akhund with little to govern.
Despite its economic challenges, however, Afghanistan remains a fascinating case study. Consider that in just the last sixty years, the country has seen monarchial, theocratic, and democratic rule. It has twice been occupied by superpowers, endured decades of war, and though bordered by much stronger neighbors, it has continued to exist. The fact that a people can endure so much hardship and persist, is cause for optimism that a better future is possible.
Development Issues
Poverty is the single biggest development issues facing Afghanistan today. The effects of such conditions are varied, from hunger and bad health to hopelessness and lawlessness. More importantly, however, is the exclusion that comes with it. Academics Janet Gornick & Natascia Boeri define social exclusion as the absence of opportunity to make the most of one’s life (Gornick & Boeri, 2016). While this has several applications in Afghanistan, it is most visible in the Taliban’s treatment of women, who are forbidden from travelling, going to school, and holding most jobs. This constitutes a remarkable sequestration of the country’s productive population. Yet the restrictions on Afghan women are more than economic. As Gornick & Boeri write, social exclusion is both material and social (pp. 223, 224). Women are not only prevented from working, but they are also almost entirely cut off from society. This has a compounding effect on the economic mobility of families, whose working age women may be willing but not allowed to contribute.
One cannot talk about Afghanistan without talking about religion. The concepts of social exclusion and religious rule may seem academic; however, they help contextualize the relationship between development issues and their consequences. For example, religion impacts local government’s ability to treat the symptoms of poverty, such as hunger and disease. As research consultant Rick James writes, faith can be both a powerful and flammable agent for change (James, 2011, p. 110). Mixing religious views with the Taliban may be more risk than any Faith-based Organization (FBO) wishes to take on, for example. The resulting lack of aid compounds the short and long-term effects of hunger including lower IQs, impaired health, and malnourished children (Banerjee & Duflo, 2011, p. 31). Furthermore, hunger and poverty exist in a negatively symbiotic relationship, where each feeds the other. Malnourished children are less productive, less intelligent adults, who are less capable of lifting their country out of poverty.
Policy Options
While mixing religion and relief carries risks, engaging with Muslim faith-based organizations to provide relief is nonetheless an intriguing approach. As Erica Bornstein (2002) of Berkely writes, people of faith have a long history of providing agricultural, education, and self-help assistance in places state-sponsored actors were unwilling to go (p. 5). Rick James (2011) adds that the communities that are the most in need are often communities of faith themselves, as is the case in Afghanistan. In other words, there’s a sense of common ground between recipient and giver.
As mentioned, conflicts over religious points of view may compound the effects of poverty. However, the risks aren’t all due to the Taliban. For example, the religious values associated with FBOs can interfere with the delivery of relief, as was demonstrated during the early days of the HIV epidemic (Clarke et al, 2011, p. 6). In another example, Erica Bornstein writes that World Vision sees economic transformation, morality, and redemption as intertwined (Bornstein, 2002, p. 9). Such a conflation of relief, faith, and morality offers all sorts of risks if the local community accepts the aid but rejects the faith. Nonetheless, FBOs whether Afghani or other, working locally with individual communities is worth exploring.
Promoting better healthcare locally is another option that should not radically compromise Taliban principles, nor should it require complex investment and infrastructure planning. For example, Banerjee & Duflo (2011) talk extensively about the effectiveness of mosquito nets at reducing rates of malaria, or a few drops of chlorine at preventing water-borne illnesses. Another benefit to prioritizing better healthcare is that it can be done through partnership with faith-based organizations. Essentially, an FBO who is permitted to operate inside Afghanistan for one purpose could deliver medical supplies as well. Finally, as an example of what basic disease prevention can do, research cited by Banerjee & Duflo indicates that children who grew up malaria free, earned up to 50% more throughout their adult lives than children who got the disease (p. 45). In other words, for the cost of a mosquito net or a few drops of chlorine, developing nations like Afghanistan can have more productive and better off adults.
Finally, microfinance is the most intriguing option Afghanistan could pursue. While poverty might seem counterintuitive to the notion of lending, microfinance is specifically designed to work in impoverished communities. For example, it has helped hundreds of locals start or grow businesses in places like India and Southeast Asia (Banerjee & Duflo, 2011). Furthermore, loans do not have to constitute thousands of dollars. Grameen Bank, a microfinancier based in Bangladesh, for example, offers annual $450 maximum lines of credit for first time borrowers (Grameen Bank, 2023).
That said, while it’s easy to overplay the snowball effect of microfinance, there are limits to its ability to lift communities out of poverty. First, recipients of microfinancing are overwhelmingly poor and remain poor after having paid back their loans (Banerjee & Duflo, 2011). Second, ensuring repayment is difficult and requires dedication on the part of the lender (p. 167). These are not reasons to avoid microfinance, however the commitment to the borrower and the limits of microfinance must be recognized.
Policy Recommendation
Afghanistan presents a number of challenges that could be addressed through better policy and governance. However, it’s important to keep in mind the likelihood that any such policy would be considered. Poverty is presumably something the Taliban government care about but lack the infrastructure to address. An alternative to massive development projects, however, is to lean on wealthier Afghans (perhaps government officials themselves), to act as lenders and financiers of microcredit.
The benefit of microfinance is that it provides individual families with opportunities to start small businesses that generate modest profits. Those profits can be used to buy other essentials, like food, medicine, clothing, or another loan. While other solutions like FBO assistance or medical aid are needed, microfinance provides the potential to meet those needs by cultivating micro-economic activity. In other words, generate incomes at an extremely local level that can be used to afford basic needs. That said, the scale of these operations should not be overexaggerated. One of the microfinance success stories cited by Banerjee & Duflo (2011), for example, was that of an Indian woman who began collecting and sorting trash by hand, then by cart, and eventually buying garbage from her neighbors. While a worthy success story, the results were still very local and should not be conflated with the outcomes of venture capital. The woman in the story remained poor and continued sorting garbage by hand. Credit allowed the woman to lift her family out of extreme poverty into a less dire, but still poor circumstance. It did not afford her a middleclass lifestyle.
Probably the more intriguing benefit of microfinance is that it could be administered by the Taliban, on a village-by-village basis. As discussed in the policy options section, servicing loans is a significant source of overhead for microfinanciers, however the Taliban’s near-ubiquitous control of government and civil services, as well as being one of the few sources of money in the country, make them a curious option. Furthermore, Pashtunwali which promotes a code of honor and shame (Glatzer, 2002), is widely understood by most Afghans, and could be a platform to establish trust that borrowed money will be repaid. Said differently, there is a cultural basis by which accountability can be presumed and enforced as a form of social insurance.
Finally, implementing microfinance is not without risks. First, sourcing the money to lend is a challenge. In the examples cited by Banerjee & Duflo (2011), the host countries where microfinance was taking place all had existing economies, whether in India or Southeast Asia. Afghanistan has virtually no economy by comparison. This challenge is not easily surmounted except through wealthy Afghans deciding to lend. Second, the wealthiest Afghans may be Taliban officials. As mentioned, the Taliban may be well positioned to operate microfinance schemes, however, their reputation for fear and brutality might preclude anyone from borrowing. This could be mitigated however by lending to Afghans in more conservative parts of the country. Upon establishing trust, they could branch out into more urban, comparatively liberal parts of Afghanistan. Finally, microfinance has limited upside, however, Afghanistan’s aforementioned 55% poverty rate suggests that even small increases in income can make a worthwhile difference.
Conclusion
Afghanistan is a troubled but formidable country. Its people face widespread poverty, starvation, and an oppressive religious regime. Yet there is opportunity for small scale, local efforts to produce meaningful change in the lives of individual families through microfinance. Unlike other policy approaches, microfinance enables entrepreneurial expression, generates income for families, and allows those who find success to buy food, medicine and other essential supplies. Most importantly, microfinance begins to break down the barriers of social exclusion by focusing on enablement through lending.
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