U.S. Cuts Afghan Development Aid By Half

Following news that the U.S. would cut 50 percent of its planned development aid to Afghanistan this year, Chairman of the Afghan Chamber of Commerce & Industries (ACCI) Mohammad Qurban Haqjo on Thursday warned that the consequences for the Afghan economy could be "catastrophic".

The Afghan economy is still heavily reliant on foreign financial aid, and the U.S. remains one of the largest donors. However, when the White House requested 219 billion USD in development funds for Afghanistan in the annual budget, the U.S. Congress voted to approve only half of that amount.

"The aid reduction could be catastrophic to Afghanistan's economic growth, because the country isn't even able to meet its budget with domestic resources," ACCI Chairman Haqjo said. "So we need the U.S.' long term cooperation and the Afghan government should deal with the matter seriously."

The 50 percent aid reduction is expected to have a drastic effect on development and infrastructural programs.

Some, including Presidential candidate Abdullah Abdullah, were quick to point the blame at the current government, and the policies of President Hamid Karzai for the U.S.' belt-tightening.

"The aid reduction will have negative impacts on Afghanistan's economic growth, on administrative affairs, security, and people's lives, unfortunately, these are the outcomes of the personal decisions and policies of the President," Presidential candidate Abdullah Abdullah said.

Although the U.S. has seen budget trimming become a common theme in its fiscal policy over a number of years, the most recent cut in Afghan aid is hard to divorce entirely from the rocky relations Kabul and Washington have seen recently.

With President Karzai refusing to sign the Bilateral Security Agreement (BSA), which would provide the legal framework for a continued U.S. military presence in Afghanistan, U.S. officials have warned that America's support for Afghanistan is not unconditional. Washington has pushed Karzai to sign the deal, but he has refused citing new preconditions that U.S. officials have shown no interest in meeting.

Last week, tensions flared over a joint U.S.-Afghan forces operation in Ghorband District of Parwan province after a number of civilians were killed by an air raid called in to support ground troops pinned down by insurgents. U.S. officials and many Afghan leaders expressed remorse about the civilian deaths, but said the operation was an overall success, having lead to the deaths and capturing of a large group of militants.

Karzai, however, damned the operation, despite it being approved by his own security officials, and drove a larger wedge in relations with Washington.

Whether the U.S. Congress intended the slash in development aid to be a caution to Karzai and other Afghan leaders is up for debate, but either way it will certainly have a major impact on Kabul's plans for the coming year.