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Afghanistan

Afghan economy hit by U.S. security wrangle

Thursday, January 02, 2014 - 01:47

Jan. 2 - Businesses and politicians in Afghanistan say confusion over whether President Karzai will sign a security pact with the United States is hammering the local economy. David Pollard reports.

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Kabul's newest shopping centre. Among its facilities a 3D cinema, swimming pool and space for 160 shops. But only a fraction have tenants - a situation many fear will go on without a security deal to allow U.S. troops to stay beyond a planned withdrawal this year. A deal President Karzai has delayed signing. Mohammad Aslam runs a clothing shop. (SOUNDBITE) (Dari) SHOPKEEPER MOHAMMAD ASLAM, SAYING: "We don't know whether the Americans will stay or leave. The Afghan economy is dependent on America. Afghanistan is not at a stage where it can satisfy the needs of its people - we needs foreign support." Without the bilateral security agreement or BSA, that support - around eight billion dollars a year - is under jeopardy. And that's driving a surge in demand for the U.S. dollar. American officials also warn of a revived threat from the Taliban and al-Qaeda. But President Karzai says such talk is all part of a bid by the U.S. to force him into handing over land to the Taliban, as part of a peace deal. Dollar demand recently pushed the Afghan currency to a record low. In turn, prices for essentials - firewood, groceries and cooking gas are up by at least a quarter. Member of parliament,Shukria Barezkai, says whatever bubble there was in the economy is bursting. SOUNDBITE (English) MEMBER OF THE AFGHAN PARLIAMENT, SHUKRIA BAREKZAI, SAYING: "In the last ten, thirteen years we weren't able to build the infrastructure of Afghan economy. So therefore it is very important for us.'' The U.S. is thought to have been pushing for an early January deadline for signing the deal. Hopeful that Karzai may not wait until after elections scheduled for next April before making his decision.

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Afghan economy hit by U.S. security wrangle

Thursday, January 02, 2014 - 01:47