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Politics : Foreign Affairs Discussion Group

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To: Dayuhan who wrote (74383)2/16/2003 9:56:36 AM
From: LindyBill   of 281500
 
Sorry, but this just isn't real. I don't know what the GNP of Afghanistan is - I doubt that anybody knows

As low as it is, Steve, they will have to build it back themselves. Any Aid Money we give them will just goes into a hole in the ground, as the story below on Bosnia shows. Afghanistan had about 25 Million people, and a "Guessable" GNP based on Agriculture of about 20 Billion. These figures are from '97 country studies.

With that low a GNP, they don't have to go very far to be better off than they were. One thing that helps is that a lot of the refugee population is bringing back in one hell of a lot of money, by all accounts, and is rebuilding like mad. I read a recent story that we have troops doing "Peace Corp" type activities, going from village to village, setting up and overseeing the building of wells, schools, and other infrastructure. One hand making construction deals, the other with a gun!

NEW YORK TIMES

February 16, 2003
Where Did All That Money in Bosnia Go?
By DANIEL SIMPSON

[S] ARAJEVO, Bosnia and Herzegovina ? As Western officials descended on Bosnia in 1996 to reconstruct a nation that was almost wiped off the map by its neighbors, the man in charge, Carl Bildt, withdrew $210,000 from a Brussels bank and carried the cash to Sarajevo in his briefcase to get started.

Since then, billions of dollars have flowed into Bosnia, sustaining so many overlapping international missions that officials are unwilling to guess exactly how much has been spent to rebuild the economy.

Leaving aside the cost of stationing tens of thousands of NATO soldiers here over seven years (there are now fewer than than 20,000, perhaps 3,000 of them Americans), as well as humanitarian aid and the resettlement of a million refugees, the answer lies somewhere between an original World Bank target of $5.1 billion and about $15 billion, according to estimates by economists. How much came from Washington is unclear.

If spent more effectively, critics of international reconstruction strategies argue, this money could have had a greater impact. But so many obstacles to development exist in Bosnia that few sustainable benefits can be seen yet, other than the absence of war and the gradual rebuilding of roads, power plants and other basics.

In the center of Sarajevo, which sustained a 43-month siege by Bosnian Serbs from 1992 to 1995, wartime scars are slowly disappearing, although more gutted homes are noticeable outside the city center.

But reconstruction consists of far more than rebuilding property, particularly in a country of smokestack industries and Communist central planning before its bloody separation from Yugoslavia ruined both of these mainstays of the economy.

Despite the return of many refugees to their prewar homes, Bosnia remains divided along its ethnic fault lines: split into two semi-autonomous halves by the Dayton peace accords, governed at all levels by unwieldy combinations of Muslim, Serb and Croat nationalists, and utterly reliant on international aid and oversight.

Paddy Ashdown, a British politician who last year became the fourth high representative of the international community ? effectively the Western powers' proconsul in Bosnia ? knows that his omnipotent office cannot be dismantled and the country left to fend for itself ? the ultimate goal ? without an overhaul of the economy. But with other missions to support, including the follow-up to a potential invasion of Iraq, international money and patience are running out.

"The whole economic recovery program that we're pushing through now is almost too late," Mr. Ashdown said. "We have three years to convert an aid-dependent economy into an export-driven one."

The strategy sounds straightforward: build a market economy based on the rule of law and privatize state assets to attract foreign investment that can create jobs. But in the words of Joseph Ingram, the World Bank's country director for Bosnia, "This is a tall order."

Having grown frustrated with the intransigence of elected local leaders, international officials now rely heavily on the high representative's powers to impose legislation. But this makes many reforms harder to carry out. Moreover, Bosnia has a heavy debt load and a ballooning trade deficit, making it hard for the government to become creditworthy by the end of the decade ? a target set by the international lending agencies on whom Bosnia now depends. "Unless they can attract new foreign investment at a rate of $250 to $300 million a year, then they're in trouble," Mr. Ingram said.

Retailers from neighboring Croatia and Slovenia have started to move into the Bosnian market. But investors from Western Europe see few incentives.

Given these drawbacks, many in Bosnia wonder what happened to all the money that poured in from countries eager to make amends for not intervening earlier to stop a war that claimed more than 200,000 lives.

"A lot of time and money has been wasted here on poorly coordinated projects that have done nothing to increase Bosnia's productive capacity," said Zarko Papic, an economist and prominent critic of international support strategies.

Aid often has its own agenda. Saudi Arabia, for example, has spent more than $500 million on humanitarian and religious projects. According to both Bosnian and foreign officials, the aim is to spread its rigid interpretation of Islam in a land where most Muslims are not conspicuously pious.

Meanwhile, international donors and lenders see no future in reviving rusting industrial works, unless private investors want to buy them. But without an influx of foreign capital, alternative sources of employment are difficult to find ? other than in what is euphemistically termed "the gray economy," which covers everything from smuggling electronics to not declaring employees to the tax authorities. Little wonder that young people line up outside Western embassies to seek a new life abroad.

There have been a few isolated successes, like an aluminum plant in Mostar that accounts for 25 percent of Bosnia's exports and keeps Mercedes-Benzes supplied with hubcaps. But other state-owned industries have been so neglected they can be sold only for a nominal fee.

HOPING to make inroads into an official unemployment rate of 40 percent, the World Bank and other international organizations are providing small loans to potential entrepreneurs. Yet even these recipients, who number more than 150,000, complain.

"The international community should have invested more in the factories," said Mehida Usanovic, a 46-year-old hair stylist who has taken out three loans, the biggest worth $5,000, to build up her Sarajevo salon. "Who's going to visit the hairdresser if they can't pay their utility bills?"

Mark Wheeler, who monitors Bosnia for the International Crisis Group, said: "We're really on the knife-edge now as to whether this experiment in putting a country back together will succeed or fail. As long as half the people here live in poverty, it will be difficult to deal with all the most intractable problems."

nytimes.com
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