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Afghanistan's Other War: Economic Aid's Elusive Peace Dividend

The war in Afghanistan has just entered its tenth year. Beyond the growing bloodshed, the U.S. also struggles on the battlefield economic development.

GHAZNI - Sayed Abdul Baas, mayor of this eastern Afghan city, could hardly contain the satisfaction in his voice: "We thank the U.S. government for its support, and we appreciate the hard work that it has done to help the Afghan people." At the conclusion of negotiations last month with engineers and American army officers at an International Security Assistance Force (ISAF) base in Afghanistan, Ghazni was set to receive additional assistance of approximately $250,000 for the extension of its municipal slaughterhouse. The new facility will allow the city to slaughter large livestock, not just goats and sheep. It's a mini revolution for Ghazni.

But on this day, Sayed Abdul Baas has another reason to be happy: he is able to hold a press conference in front of European and American journalists who have been invited on site by ISAF. For him, this first encounter with Western media is the perfect way to lay the groundwork for 2013. Two years from now, the city will be "the global center of Islamic culture," as chosen by the Islamic Educational, Scientific and Cultural Organization (ISESCO). In the meantime, Baas has plenty to keep him busy, with $100 million expected to be invested to modernize Ghazni. Among the many proposed projects are the building of an irrigation system for agriculture, new parking lots, a museum, and other facilities necessary to host delegates to the Islamic Conference.

Modernizing agriculture

Ghazni is typical of the kind of city that can count on help from the United States. Major Davis of the Texas National Guard explains that the goal is to develop agricultural production in Afghanistan, "not by introducing ultramodern equipment, but by bringing the country at least to the level of the 1970s." In the 30 years of conflict since the first Soviet invasion in 1979, several generations of agricultural knowledge have been squandered. Today, the war against the Taliban is largely a war of economic development.

In total, the United States has earmarked some $800 million annually for the sole purpose of helping local agriculture, specifically to encourage crops other than poppy, which fuels opium trafficking that helps fund the Taliban insurgency. In Afghanistan, fighting the war is not only a question of conducting military combat. "Poverty is definitely our biggest challenge, especially poverty affecting the youth," says a senior U.S. diplomat in Kabul.

Over the past year, as the Taliban has gained strength in the provinces of Kandahar and Helmand, and attacks in Kabul increase, American forces have decided to change their strategy by opening up additional fronts. While they have increased their numbers by 25,000 to 30,000 additional troops (bringing the total number of international forces to more than 140,000), the United States and its allies have also focused on training local security forces, which are due to take over for the coalition troops in late 2014, as requested by President Hamid Karzai.

Supplying electricity

In the residence of the provincial government, which overlooks the river several kilometers from the new mausoleum, Governor Bahloul Bahij reasserts that his administration is always ready to fight "against the Taliban and terrorists." But today, his main priority is the further economic development of the province, where the subsoil is rich in minerals, especially iron. His other priority is to supply electricity across the valley.

But these developmental efforts in quiet areas of Afghanistan still fall far short of creating the stability necessary for the country as a whole. Fighting is becoming increasingly deadly south and east of Kabul. Since 2001, international forces have lost more than 2,200 soldiers, with more than 10,000 wounded. Last year was the bloodiest year to date, with the number of IEDs (improvised explosive devices) more than triple 2009. Explains a senior officer at ISAF, "the insurgency adapts very quickly to any new tactic. We must continually modify our strategies."

For all the officers of the ISAF and diplomats in Kabul, it is clear that the solution of the conflict lies not only in Afghanistan but also in neighboring Pakistan, where Afghan fighters maintain their rear bases. "Until now," says an ISAF official standing in the heart of the ultra-protected base located in the center of the green zone of Kabul, "the Pakistani army fought only against the Pakistani Taliban. Not against the Afghans withdrawing south of the border." The hope is that Islamabad, under international pressure, will decide to actually fight back against these insurgents as well.

Creating a legal system

Another priority of the international forces is the fight against Afghanistan's endemic corruption, which has reached President Hamid Karzai's half-brother in Kandahar. This corruption is also felt in everyday life. On the ground, coalition soldiers often complain about paying more than the Afghans for all their products. "I have to send my driver to get fuel because there are no stations on the base, and we end up paying double what Afghans pay," said one officer in Ghazni. Another complained about the laundromat, which was built off-base with American money. "Why are my parents paying taxes in the U.S.?" he complains. "At best my clothes are unwashed, at worst things are stolen from me. "

For Afghans, corruption is now part of everyday life. According to the NGO Integrity Watch Afghanistan (IWA), 28% of Afghans have been forced to pay a bribe in 2009 to obtain access to public services. And in a country where income per capita is $502, the average bribe paid is $156. A senior civilian representative to ISAF also recognizes that the primary challenge in 2011 will be the question of governance. To fight against police corruption, he says, their pay has been almost tripled. It now stands at nearly $800 per month, paid in large part with U.S. funds.

The creation of a legal system is another challenge. Initially, this mission was entrusted to the Italians during the Bonn conference, which followed the November 27, 2001 fall of the Taliban regime. Nine years later, no progress is visible. "It's like the Wild West out here," quips one ISAF general.

The task of making all necessary progress before the end of 2014, when full responsibility for security is slated to be handed off to the Afghans, seems daunting. "With 140,000 soldiers, we could easily take over towns and provinces," concedes a senior commander. "The problem would be keeping them under control." Instead, the United States and its allies will need to win a different kind of war, a war of development and reconstruction – and the clock is ticking.

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How A Xi Jinping Dinner In San Francisco May Have Sealed Mastercard's Arrival In China

The credit giant becomes only the second player after American Express to be allowed to set up a bank card-clearing RMB operation in mainland China.

Photo of a hand holding a phone displaying an Union Pay logo, with a Mastercard VISA logo in the background of the photo.

Mastercard has just been granted a bank card clearing license in China.

Liu Qianshan


It appears that one of the biggest beneficiaries from Chinese President Xi Jinping's visit to San Francisco was Mastercard.

The U.S. credit card giant has since secured eagerly anticipated approval to expand in China's massive financial sector, having finally obtained long sought approval from China's central bank and financial regulatory authorities to initiate a bank card business in China through its joint venture with its new Chinese partner.

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Through a joint venture in China between Mastercard and China's NetsUnion Clearing Corporation, dubbed Mastercard NUCC, it has officially entered mainland China as an RMB currency clearing organization. It's only the second foreign business of its kind to do so following American Express in 2020.

The Wall Street Journal has reported that the development is linked to Chinese President Xi Jinping's meeting on Nov. 15 with U.S. President Joe Biden in San Francisco, part of a two-day visit that also included dinner that Xi had with U.S. business executives.

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