Poverty, Financial Crisis and NRM in Afghanistan
Nasratullah Mateen, Ex-Head of Capacity Development Department
This is a short analytical article written based on review of reports and documents, and analysis of the key issues related to poverty and natural resources. The issues that you will read about in this short analytical article are: Why is Afghanistan Poor; Facts About Poverty in Afghanistan; Poverty Reduction in Afghanistan; Poverty Reduction and Natural Resource Management; Poverty and Natural Resources Interactions; The Asset-based Approach for Poverty Reduction; and a personal reflection on the topics discussed.
Why is Afghanistan Poor?
Despite an influx of international aid, 54.5 percent of Afghans live under the poverty line based on Asian Development Bank’s 2016 statistics, and this number is increasing.
There are many reasons that have led to poverty in Afghanistan. Among those are conflict since the Soviet Union’s invasion in 1979, and political transitions and the lack of a stable government which has caused insecurity. In addition to that, most households are economically vulnerable to natural disasters and about 20 percent of Afghans live just above the poverty line which means that slight economic shocks could drive them into poverty. Many illiterate workers are looking for low skilled jobs, but there are no such jobs. Another reason for Afghanistan’s poverty is its dependence on agriculture because compared to its population, there is little farmable land. Moreover, scarce precipitation, insufficient irrigation infrastructure, and multiple debilitating droughts since 1999 have also contributed to Afghanistan’s poverty. Besides these reasons, increasing inequality between the rich and poor is another reason for poverty. The government did not always distribute funds fairly throughout the country. Agriculture sector continues to struggle because there has been no enough investment and natural resources necessary for successful agriculture are lacking in Afghanistan.
Based on Asian Development Bank’s Basic Statistics 2018, a total of 3.91 percent of Afghan population lived under the poverty line in 2013 whereas the number of people living below the poverty line in our neighboring countries such as Tajikistan, Pakistan, Uzbekistan, and Kazakhstan was 31.3, 29.5, 12.3, 2.6 percent, respectively.
Facts About Poverty in Afghanistan
> Poverty: poverty in Afghanistan stems from two factors: food insecurity and the lack of a social security net.
> War: 55 to 75 percent of the Afghan population is living in poverty in the worst-hit regions
> Illiteracy: only 43 percent of the entire adult Afghan population was literate based on 2018 statistics.
> Government: 54 percent of the country’s total population is below the national poverty line and another 20 per cent of the people are just above that line and highly vulnerable to the risk of falling into poverty.
> Population Size: Afghan households tend to be large.
> Agriculture: Agriculture, the major activity for a large portion of the population, has suffered from nearly 30 years of conflict, low investments and natural disasters.
Poverty Reduction in Afghanistan
Poverty in Afghanistan is concentrated in rural areas. Lack of education, livelihoods and access to basic services contribute to Afghan poverty. Poor people are more vulnerable and also less equipped to cope with natural and manmade shocks and disasters. International spending helped grow the economy, but it hasn’t equally benefited all sectors or the poorest.
Four out of five poor people live in rural areas. The East, Northeast, and West-Central regions—where almost half of the inhabitants are poor—have the lowest per capita consumption and highest likelihood of poverty. To reduce poverty, Afghanistan must focus on strengthening agriculture, investing in human development and managing and mitigating risks that increase poor people’s vulnerability.
Natural Resources Vial Role in Poverty and Instability Reduction
Natural resources play a vital role in dealing with poverty and instability. “To deal with poverty and instability on one side, but prosperity and empowerment on the other, the other side of the equation is our natural resources. Our natural resources are estimated to be worth one trillion dollars. But they remain on paper,” President Ashraf Ghani-Addressing a private sector session during the Geneva conference. Afghan government also says that it has created the legal structure for mining and natural resources so that they become a source of stability and prosperity. Agriculture is key to stability and to global security and agriculture is key to overcoming the challenge of narcotics. In order for natural resources to become manifest and to become a source of stability, the government has created the legal structure. The mining law and the hydrocarbon law are among the very best, as they say, and they have a structure of checks and balances where all the contracts are carefully reviewed by an international firm within the structure of the government.
Poverty and Natural Resources Interactions
Growing populations is adversely affecting finite natural resources, with technology mitigating the type and degree of impact. Thus, poverty is sometimes seen as a source or “driver” of biodiversity loss and environmental degradation. Conservationists and government officials often see the poor as part of the natural resources problem and as the cause of deforestation, degraded landscapes, and dwindling wildlife populations. A poor person’s inability to accumulate wealth from these resources may lead to over-exploitation and environment degradation. This “downward spiral thesis” relates population growth and economic marginalization to worsening environmental quality and declining resources, resulting in long-term declines in food consumption, human health, and food security. This view assumes that poverty leads to cycles of further environmental degradation and ever-increasing poverty.
Findings from the recently completed Millennium Ecosystem Assessment in 2005 confirm that the burden of environmental decline already falls heaviest on the poor and that further degradation will increase the numbers of poor people. Hurricanes, earthquakes, famines, tsunamis, and floods as well as macroeconomic crises and mismanagement affect poor people most. Such a pattern could lead to migrations or even greater unsustainable exploitation resulting in overfishing, soil depletion, desertification, deforestation, or species extinction, potentially perpetuating a poverty-environmental degradation cycle.
Poverty Reduction and Natural Resource Management
More than 1.3 billion people depend on fisheries, forests, and agriculture for employment—close to half of all jobs worldwide. —FAO 2005
Natural resources play a special role in the life of the poor. About three in four poor people live in rural areas across the world, where they depend on natural resources for their livelihoods, and about 90 per-cent of them depend on forests for at least some part of their income. The world’s poorest citizens depend on forests, fisheries, water, land, and other natural resources for their livelihoods.
As stated by World Bank: in 2002, 90 percent of the world’s 1.1 billion poor—those living on less than $1 per day—depended on forests for at least some part of their income. Several studies show that small-scale activities in the forest, fishing, agriculture, livestock, and mining sectors can contribute 15 to 70 percent of rural household cash incomes and even greater values for subsistence. Because they have greater political power, the rich are able to exercise stronger control over access to resources. Poor people rely on related harvests as a primary source of income. In general, the poor have limited access to physical and financial capital. In addition, rich and poor people use natural resources in different ways.
The Asset-based Approach for Poverty Reduction
The asset-based approach to poverty reduction focuses on developing the stock of wealth available to the poor, and on their ability to manage risk and vulnerability and to achieve sustainable long-term improvements in well-being. The poorer the country or the population, the more significant the role natural capital plays in determining poverty outcomes. Natural resources contribute to livelihoods by providing a buffer against temporary dietary and economic shortfalls, serving as sources of cash income and employment in times of crisis, and serving as a readily convertible capital asset. The link between natural resources management and poverty reduction depends on the systems of governance. Hence, pro-poor growth and sustainable resource management will require a fundamental change in governance.
The World Resources Institute’s Suggestions for Poverty Reduction
The World Resources Institute (WRI) suggests seven steps to more strongly integrate environmental assets into poverty reduction efforts:
1. Ecosystem orientation and environmental income: Emphasizing the ecosystem approach and value ecosystem services as a source of income for the poor.
2. Sustainability of income over time: Taking a long-term approach and consider the consequence of developing agriculture, fishery, and forestry sectors.
3. Tenure and access to resources: Recognizing the central importance of land tenure to reducing rural poverty.
4. Decentralization and Community-Based Natural Resource Management (CBNRM): Granting power over resource management to competent local authorities and community groups.
5. Participation, procedural rights, and gender equality: Grounding the strategies in broad-based participation by civil society and emphasizing free, prior, and informed consent by local communities in economic development projects.
6. Environmental monitoring: Including plans to monitor environmental conditions to track impacts of economic growth on environmental income.
7. Targets, indicators, and assessments: Specifying poverty and environmental indicators to evaluate the situation.
Conclusion and Personal Reflection
> Natural resources must be recognized as a major—if not the major—asset of the poor.
> Poor people and poor countries tend to be dependent to a large extent on natural resources for growth, poverty reduction, and empowerment.
> Governments should recognize the importance of natural resources for poor countries and poor households.
> Most poor countries and most poor communities are dependent on natural resources. Given the importance of natural capital in the economic portfolio of the poor, both economic growth and poverty reduction programs must focus on improving the poor’s access to and use of natural resources.
> Focus on the talents, challenges, and opportunities of poor rural households.
Strengthen pro-poor systems of access to and control over natural assets.
> Both procedural and property rights are important for systems of control and access. Lack of control over available resources and inability to participate in decision-making processes often limit the poor’s ability to use natural resources in a sustainable manner to accumulate wealth.
> Natural capital is a much greater share of wealth for the poor than for the rich.
Strong local organizations are the backbone of pro-poor growth.
> Corruption and conflict significantly impact the poor.
> An asset-based framework for poverty reduction improves social benefits.
> Natural resource economic structures, policies, and institutions must work for the poor.
> Effective policies are critical to effective and beneficial natural resources management.
> Build resilience of the communities to risks, shocks, and vulnerability.
> Focus on less-favored areas in development programming.
> Encourage complementary pro-poor investments.
> To strengthen pro-poor financial institutions, exclusionary mechanisms that prevent poor people from gaining access to credit, land rights, insurance, and social networks must be identified and removed.
> Fostering resilience, or reducing risk and vulnerability, is a relatively new concern in poverty reduction programs and financial institution capacity.
> Investments in less-favored areas can have clear environmental and poverty reduction benefits, and in some cases the economic returns can equal or be higher than those earned in high-potential areas.
> In order to reduce poverty, the government must invest more in natural resource management and the focal point in such activities should be the poor.
> Natural resource rights should be clarified and natural resource utilization laws should be enacted.
> If the government fails to strengthen the poor, the poor will cause the over-exploitation and further degradation of the environment and natural resources.
References:
1. Issues in Poverty Reduction and Natural Resource Management; (Anderson & Nelson, 2006)
Anderson & Nelson, 2006; OCHA, 2019; Viola, Najimi, & Bacon, 2007); USAID.
2. Afghanistan Food Security Conditions and Causes; A special report by the Famine Early Warning Systems Network (FEWS NET) (Viola et al., 2007); USAID.
3. Humanitarian Response Plan; (OCHA, 2019)
4. Socioeconomic Progress in Afghanistan; World Bank’s 2017 Poverty Status Update Report.
5. Basic Statistics 2018, Asian Development Bank.