Economic Thought on Clubhouse

Description

This club is dedicated to the economy of Afghanistan 🇦🇫. Academics, thinkers, researchers, writers, and ordinary people are welcome to join, start rooms, and debate solutions for the economic challenges of the country.
The biggest economic challenge of Afghanistan is lack of sustainable growth. The country’s economy is shaped by fragility and aid dependence. The private sector is extremely narrow, with employment concentrated in low-productivity agriculture (44% of the total workforce works in agriculture and 60% of households derive some income from agriculture according to the World Bank). Private sector development and diversification is constrained by insecurity, political instability, weak institutions, inadequate infrastructure, widespread corruption, and a difficult business environment (Afghanistan was ranked 173rd of 190 countries in the 2020 Doing Business Survey). Weak institutions and property rights constrain financial inclusion and access to finance, with credit to the private sector equal to only three percent of GDP. Weak competitiveness drives a structural trade deficit, equal to around 30% of GDP, financed almost entirely from grant inflows. Grants continue to finance around 75% of public spending. Security expenditures (national security and police) are high at around 28% of GDP in 2019, compared to the low-income country average of around three percent of GDP, driving total public spending of around 57% of GDP. The illicit economy accounts for a significant share of production, exports, and employment, and includes opium production, smuggling, and illegal mining.