Afghan economy growing significantly

Craig Charney and Mohammad Nasib:

What's the most under-re ported reason to feel optimistic about Afghanistan? Its booming economy.

Afghanistan has averaged over 10 percent growth a year since the Taliban's fall late in 2001. That's as fast as China or India (if from a much lower base). And a recent survey shows that, despite the ongoing war, Afghan firms are doing well and feeling hopeful.

They should be: Money is pouring into infrastructure improvements, job creation and corporate investments that are starting to transform one of the world's poorest economies. Big mineral finds have even opened the possibility of self-sustaining growth -- if Afghanistan can achieve reforms and stability.

For now, Afghan businesspeople worry about security, corruption and poor infrastructure -- though they also report progress on those issues. Economic takeoff will demand much more progress on those fronts and better education, too. But the growth of private Afghan business and investment to replace US aid and military spending is vital to any viable, non-Taliban future.

Since the Taliban's overthrow, Afghanistan's national income has grown 8 percent to 16 percent a year, except in the 2008 slump. For 2010, the World Bank projects 10 percent growth. The private sector doubled in size just between 2005 and 2008, the World Bank says.

Recently-reported mineral discoveries worth up to $1 trillion -- including iron, copper, cobalt and gold -- eventually could become the foundation of a market-based Afghan development strategy. China is already establishing a huge copper mine in Logar province. Many other deposits are in the country's more stable north, and the Afghan government will soon invite bids from multinationals for mining rights.

Afghan businesspeople feel the local economy is good and business is getting better, we learned in a recent poll for the Center for International Private Enterprise, a US nonprofit. Three firms in four expect higher sales, profits and investment this year.

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In areas where the US has driven out the Taliban and reopened market places the economic benefit has also been apparent rather quickly. Taliban control freak policies have always had ill effects on commerce. Destroying the Taliban is certainly needed for Afghanistan's long term prosperity.