Smart move all around.
Afghanistan on Wednesday hailed decisions to cancel the impoverished country’s debts to the United States, Russia and Germany, but the country likely will remain dependent on foreign aid as it recovers from decades of war.
Afghanistan owed $108 million to the United States and $44 million to Germany from loans before the 1979 Soviet invasion. Russia claimed it was owed about $10 billion from loans to a puppet communist government in the early 1990s.
“After 30 years of devastation, we are starting from nothing and any move such as this helps the reconstruction of Afghanistan,” said Khaleeq Ahmed, a spokesman for President Hamid Karzai.
The Bush administration said Tuesday it will forgive the entire debt, following a similar pledge from Russia on Monday and from Germany at a donors’ conference last week.
Even with the loans forgiven, Afghanistan looks set to remain reliant on years of foreign aid. More than 90 percent of the government’s $4.75 billion budget in 2005 was financed by international donors, and Karzai has said his government will need propping up for about a decade.
The International Monetary Fund’s representative in Afghanistan, Joshua Charap, said that even by 2010, Afghan government revenues are expected to cover less than two-thirds of total expenditures.
Charap said the removal of the foreign debt would allow Kabul to “normalize its credit rating,” paving the way for new loans.
Nearly a third of government spending this fiscal year has been on its new army and police amid rising crime and the Taliban-led insurgency. The hard-line Islamic militia was ousted from power in 2001 by a U.S.-led invasion.
This poor nation, ravaged and rent by strife since the days of disco, needs all the assistance possible in succeeding, and the three countries forgiving debt are all safer with a peaceful Afghanistan.