Afghanistan has received at least $1.3 billion in loans from various countries and international institutions in the last 18 years, according to statistics by Ministry of Finance.
The statistics show that the loans obtained during this period are a small amount compared to other countries in the region, but economic commentators say that the loans are major burden on the Afghan people.
Economists argue that in the view of Afghanistan’s fragile economic climate, it is a tough task for the country to repay the amount, adding that most part of the amount was invested in projects which do not benefit the people’s needs.
Billions of dollars were raised in aid to Afghanistan by the international community in the past nineteen years, according to economic experts.
The $1.3 billion received in loans from the World Bank, the Asian Development Bank, Saudi Arabia, Kuwait, Italy and Bulgaria, according to Finance Ministry’s spokesman Shamroz Khan Masjidi.
He said Afghanistan has received the loans with easy terms and the amount is payable in 25 years.
“These loans are provided to us with only one percent interest and in some cases less than one percent interest and without interest and the amount is payable in 25 years,” said Masjidi.
Countries normally provide easy-terms loans for implementation of infrastructural projects which is aimed to promote economic development. But critics suggest that in Afghanistan, there is a clear prospect about investing such loans.
“First government in the view of current economic situation has not reached to self-reliance and it will be unable to repay the amount. Secondly, part of the money has been invested in projects such as the transfer of power from Tajikistan to Afghanistan while we should have built dams with this money,” said economic affairs analyst Haseeb Moahid
Afghanistan was on the top of countries in the region with high amount of loans during the former Soviet Union. But major part of the loans were then forgiven by the Paris Club. The Paris Club is an informal grouping of 19 nations, plus the World Bank and the International Monetary Fund, who meet once a month in Paris to discuss whether to offer financial aid to developing countries, and whether to forgive existing loans.
The Ministry of Finance said that Afghanistan still owes $20 million from Iran and Russia from the Soviet era, however, talks are underway with these countries so that they forgive the money.