Economics Essay: Analyzing NGOs' Impact on Afghan Poverty (ECON)

This economics essay delves into the critical role of Non-Government Organizations (NGOs) in addressing the persistent issue of poverty in Afghanistan. It provides a comprehensive overview of the historical context, tracing the evolution of NGOs from the Soviet invasion to the post-Taliban era, highlighting their involvement in providing emergency services and implementing development programs. The essay examines various poverty reduction initiatives undertaken by NGOs, often in collaboration with organizations like the Asian Development Bank, including programs focused on agricultural development, power transmission, and community development. It analyzes the current state of poverty in Afghanistan, citing the poverty headcount ratio and discussing factors such as economic growth, income inequality, and human development disparities. The essay also critiques the effectiveness of NGOs, considering issues like inefficiency and the influence of profit motives, while ultimately underscoring the ongoing challenges in combating poverty and promoting human development in Afghanistan.

Running head: ECONOMICS
Economics
Name of the Student
Name of the University
Course ID

1ECONOMICS
Introduction
Poverty in development economics is associated with a condition under which a
community or a person does not have sufficient financial resources to support a minimum living
standard. This is aligned with level that is not sufficient to support basic necessities of people
(Roland 2016). In analyzing state of economic development, one important dimension is poverty.
Afghanistan is considered as one of the poorest nations in the world. The problem of poverty is
widespread in different regions of rural and urban areas. It has been observed that four among
five poor people reside in rural areas. West-Central regions, Northeast and Eastern region have
half of the poor people. Approximately 42% percent of total population in Afghanistan live
below the poverty line (Haider and Kumar 2019). In addition to government initiatives to
enhance human development, different non-government organizations take measures to stimulate
social welfare. The essay analyzes role of non-government organizations in eliminating poverty
in Afghanistan.
Non-Government Organization in Afghanistan
Non-Government Organizations (NGOs) in Afghanistan stands as the most developed
form of modern civil society. By definition, in Afghanistan NGOs are considered as independent,
non-profitable civil organizations that are involved in civilian well-being and serve different
public goods in necessary sectors such as health, education, water supply, agriculture, child
protection and sanitation (West 2017). Growth of NGOs in Afghanistan undergone different
phases.
1977-1988

2ECONOMICS
Immediately after Soviet invasion, NGOs starts program to look after shelter, food and
health care necessities of Afghan refugees. In the beginning of 1980s, these NGOs arranged
different cross border programs for addressing basic needs related livelihood and basic health in
regions of Afghanistan that are outside the Soviet control. During this time many NGOs engaged
in increasing awareness regarding Afghan refugees and Afghans who are victimized due to
military aggression.
1988-1995
This was the phase when NGOs had started their development activities along with
providing emergency assistance to the nation (Mitchell 2017). It is in the late 1980s that change
in political context of Afghanistan and increase in resources contributed to an increase in number
of working NGOs.
1996-2001
Despite strict political control during Taliban regime, the improved condition of security
allowed many agencies to work with local communities in rural areas. The severe drought in
1997 increased humanitarian need in many rural areas. During this period there came a new
wave of refugee camp, internal camps and displacement into different urban areas. In response to
these events NGOs expand activities for providing emergency service to these populations.
Along with this, these NGOs continued initiatives in different development program.
Late 2001 to present
This period began with end of Taliban regime and a subsequent change in working
environment of ongoing NGOs in Afghanistan. On September 11, 2001 Taliban group was
ejected from their ruling power. During 2002, a considerably large number of refugees entered

3ECONOMICS
into Afghanistan from different bordering countries. This required need for new emergency
service for arranging shelter and food for the refugees (Rush 2016). NGOs during this time had
to balance their emergency services with the broader objectives of development and
reconstruction initiatives. Establishment of a new government that had an international
recognition gave NGOs new opportunities to expand their activities in different areas. There was
a rapid increase in number of NGOs in the nation during this time. The activities of NGOs
however sometimes are criticized by some of the government circles with the claim of
overpriced or substandard work and hence, have some negative bearings within the nation.
At present, Afghanistan has a number of national and international NGOs working on different
grounds of human development. Some of the currently working NGOs within the nation are
ActionAid, Afghanaid, Afghan Development Association, Aga Khan Development Network,
CARE Afghanistan, Danish Committee for Aid to Afghan Refugees, International Rescue
Committee, Islamic Relief Worldwide and others (Aslami 2019).
Role of NGOs in eliminating poverty
Among various objectives related to human development, eliminating poverty is one primary
objective of all the NGOs. In order to address the problem of poverty, different programs have
been undertaken by NGOs.
The poverty reduction program undertaken by NGOs in assistance with Asian Development
Bank are as follows
Agricultural Sector Program
The program was approved on 4th May, 2004 having a fund of $55 million. Objective of
the program was to promote growth of agricultural sector and reduction of poverty by supporting

4ECONOMICS
policy reforms based on principles of market economy, formulation of investment program for
developing public infrastructure, development of organizational capacity and institutional
reforms (Ebner et al. 2019). The program also supported objective of the nation to achieve self-
sufficiency in food and speed up economic recovery of the nation.
Power Transmission and Distribution Project
The project was approved on 14th April 2005. The amount of fund approved for the
project comprised of $23.5 million grant and $26.5 million loan. The main objective of the
program was to reduce poverty and uplift livelihood of the selected regions of northern, southern,
central and eastern Afghanistan. This was done by extending and rehabilitating power transition
and improvement of distribution in these location (Ershad 2017). The project was intended to
benefit directly the rural poor household. The program also sanctioned a small fund for
improving condition of minorities and women.
Wester basin Water Resource Management Project
The concerned project was approved on December 20, 2005. The total fund for the
project consisted of $14.5 million grant and $60.5 million loan. The project aimed to improve
living standard of people living in rural areas by strengthening integrated water resource
management, improvement in irrigation services and enhancement of other agricultural practices
that can increase productivity of agricultural sector (Acquah and Ward 2019).
North-South Corridor Project
Another project undertaken for improving state of poverty in Afghanistan is ‘North-South
Corridor Project’. The project was sanctioned on September 26, 2006. Amount of fund
sanctioned for the project composed of $20 million grant and $78.2 million loan (Routray and

5ECONOMICS
Haldar 2018). The project intended to improve living standard of poor people residing in remote
regions at center of the nation by restoring north-south highway corridor.
Involvement of NGOs in Japan fund for poverty elimination program
JEPR stands for the Japan Fund for Poverty Reduction is a grant facilities established in
collaboration of Japan’s government and ADB. In association with this grant facility NGOs in
Afghanistan had undertaken different projects to address problem of poverty in the nation. Some
these programs are
Community-Based Gender Sensitive Basic Education for the Poor
The program approved on September 10, 2002 had a total allocated fund of $4 million.
Aim of the project was to lower poverty by engaging young people of Afghanistan especially
girls in education and development of values that can strengthen their capacity to overcome
poverty. The project undertook a gender sensitive basic education program in the remote areas of
the nation (Far 2018). One particular objective of the project was to develop a partnership
between non-governmental organization and innovative community for providing an integrated
youth development services focusing on overall development of the society.
Integrated Community Development in Northern Afghanistan
Main objective of the project was to improve standard of living of poor people living in
rural areas of Afghanistan. This was intended to be done by developing key infrastructure,
increasing access of credit and improvement of resource management (Strand and Taxell 2016).
The project was approved on December 26, 2003 and the estimated amount of fund allocated for
the project was $3 million.

6ECONOMICS

7ECONOMICS
Current state of poverty in Afghanistan
One estimate of measuring poverty in a nation is the poverty headcount ratio. This
measures proportion of population who are living below that set national poverty line (Lybber
and Wydick 2018). The figure below shows the estimates of poverty headcount ratio in
Afghanistan.
Figure 1: Trend in poverty in Afghanistan
(Source: Data.worldbank.org. 2020)
As suggested from the figure during 2007-08, around 33.7% of total population was poor.
That means more than one among every 3 persons did not have sufficient expenditure to satisfy
their basic food and non-food necessities (Trani et al. 2016). The poverty head-count ratio
further increased to 38.3 percent in 2011. The ratio further increased to 54.5 percent in 2013. The
increasing trend in poverty indicates that despite different poverty elimination strategy by

8ECONOMICS
national and international NGOs, the state of poverty in Afghanistan has not improved rather it
worsen overtime.
The period between 2007-08 and 2011-12 were described as a period of relatively strong
economic growth. Economic growth has an obvious implication for economic development. An
increase in economic growth comes with an increase in average income which then boost living
standard and helps to reduce poverty (Haider and Kumar 2018). Unfortunately for Afghanistan,
despite economic growth the condition of poverty had not improved. One factor explaining
inability to reduce poverty within the nation is the rising inequality. Gini index, a measure of
income inequality increased from 29.7 to 31.6 between 2007-08 and 2011-12. This suggests the
benefit of economic growth in Afghanistan had not been shared equally. If benefits of economic
growth would have shared equally then then poverty could be declined by 4.4 percent. Inequality
in the distribution of income was more prevalent between rural and urban areas and that among
different regional areas (Floreani, Lopez-Acevedo and Rama 2016). The three regions that are
largely lagging behind rest of the country are Northeast regions, West-Central regions and that of
the eastern regions. Widening income equalities among different regions contributed to increase
poverty within the nation.
Dynamics on exclusion in the context of human development is another factor
contributed to growing incidence of poverty. There was sufficient investment with assistance
received from international aid to accelerate human development of people living there. In order
to reduce income inequality and poverty, human development programs should be directed
toward closing the gap between the richest and poorest segment of population along with
lowering special disparities and development of equal opportunities for everyone (Haider and
Kumar 2018). However, in Afghanistan different programs though were undertaken to increase

9ECONOMICS
human development however outcomes of these development was not uniform between different
regions and groups. Northeast, West-Central and Eastern regions lag far behind rest of the county
while considered in terms of human development outcome (Haider and Kumar 2018).
In order to eliminate poverty different employment programs though have been
undertaken, these programs however did not benefit all the Afghan laborers equally. Most of the
employment opportunities created are in informal segments or in areas that require high skill. As
a result, those programs were unable to address the problem of poverty.
Besides, these factors role on NGOs in reducing poverty has also been criticized in terms
of inefficiency in stimulating social welfare. Primarily, the NGOs are considered as non-profit
organization whose sole purpose is work for human development. The number of registered
NGOs in Afghanistan is approximately 2500. Many of these NGOs however are driven by profit
motive. They take advantages of weak system of regulation and fulfill their personal motive by
using the monetary aid (Khalid 2017). Government in Afghanistan are not able to fully monitor
all the NGOs resulting in inefficiency in part of the NGOs to satisfy their actual goals.
Conclusion
One of the severe problems hindering human development in Afghanistan is the
widespread poverty. Non-Government Organizations plays a critical role in accelerating
development of the nation. Starting since late 1970s, there was a rapid expansion in number of
NGOs engage on providing emergency services along with development activities. After end of
Taliban regime in 2001, the dominance of NGOs increased significantly. NGOs in Afghanistan
along with help of international aid designed different programs to address the issue of poverty.
Most of these programs were intended to boost the living standard of people living in rural areas.

10ECONOMICS
Despite several attempts the condition of poverty in Afghanistan is far from improvement. Even
on the phase of economic growth from 2007-2012, rate of poverty remained either stagnant or
increased. Growing income inequality is one factor responsible for increasing poverty. Besides,
growing disparities in the means of achieving human development aid, unequal employment
opportunities and profit motive of many NGOs are responsible for worsening scenario of poverty
in Afghanistan.

11ECONOMICS
References
Acquah, S. and Ward, F.A., 2019. Water policy interventions for food security in
Afghanistan. International journal of water resources development, 35(1), pp.49-70.
Aslami, M.J., 2019. The Effect of Project Management on Organizational Performance–The
Case of NGOs In Afghanistan. Available at SSRN 3395721.
Data.worldbank.org. 2020. Poverty headcount ratio at national poverty lines (% of population) -
Afghanistan | Data. [online] Available at: https://data.worldbank.org/indicator/SI.POV.NAHC?
locations=AF [Accessed 10 Apr. 2020]
Ebner, P., Rahimi, M., McNamara, K. and Ghoryar, M.A., 2019. Experiential Learning
Effectively Supports Workforce-Oriented Agricultural Education in Afghanistan. NACTA
Journal, 63.
Ershad, A.M., 2017. Institutional and policy assessment of renewable energy sector in
Afghanistan. Journal of Renewable Energy, 2017.
Farr, V., 2018. Securing health in Afghanistan: Gender, militarized humanitarianism, and the
legacies of occupation. In Global Health and Security (pp. 45-64). Routledge.
Floreani, V.A., López-Acevedo, G. and Rama, M., 2016. Conflict and Poverty in Afghanistan's
Transition. The World Bank.
Haider, M.H. and Kumar, S., 2018. Distinguishing Characteristics of Poor in Afghanistan.
In Poverty in Afghanistan (pp. 49-66). Palgrave Pivot, Cham.