Afghan budget shortfall put at US$200m

PUBLISHED : Friday, 10 May, 2002, 12:00am
UPDATED : Friday, 10 May, 2002, 12:00am

An Afghan official yesterday said his country had won generous pledges of help for reconstruction but would still need US$200 million to plug a shortfall in its operating budget this year.

Hedayat Amin-Arsala, vice-chairman of the interim administration and Finance Minister, said the struggling Kabul Government would need to meet estimated spending of US$460 million as well as US$23 million to US$24 million to cover wages of civil servants that were unpaid by the Taleban when they were in power.

'We have a certain gap in our ordinary budget,' the minister told a seminar ahead of the Asian Development Bank meeting in Shanghai.

'Our ordinary budget is critical. We have to pay doctors and the civil servants.'

But he noted that the Government could now meet 20 per cent of its needs on its own, and that was up from about 4 per cent only three or four months ago.

The Government has received pledges of US$4.5 billion extending through mid-2004 for reconstruction of the country's infrastructure, destroyed in decades of fighting against the Soviet-backed government, the ensuing factional struggle and then the United States-led strikes against the Taleban.

It has also received about US$10 million from Pakistan and US$1 million from China.

But the Government's operating needs had not yet been addressed, said the official, who ranks second behind interim government leader Hamid Karzai.

If those needs were not met, the Kabul Government would have to dip into a US$100 million credit from the World Bank or turn to borrowings from the ADB, something it hoped to avoid.

The official, who was in exile during the Taleban rule and had worked at the World Bank, is the Afghan governor at the ADB. He was using his visit to the meeting as a way of lobbying potential donors as his country continued its recovery from devastation of civil war.

He said: 'Now we have signs of hope. We will require the sustained support of the international community.'

He was optimistic that the convening of the so-called Loya Jirga, or Grand Assembly, would lead to formation of a national government with elections in 2004, and that in turn would set the stage for longer-term stability.

He described the security situation in Afghanistan as marred by 'pockets of fighting' but said the fighting was not directed at the central Government.

'We need proper security and proper laws,' he said, noting plans to create a national police force.

'This requires substantial resources which we do not have.'