Afghans pay a heavy price for uncertainty

Business has ground to a halt across Afghanistan as political uncertainty abounds.

Afghan residents wishing to vote line up underneath a billboard showing images of Afghan President Hamid Karzai (L) and of deceased Afghan figures Burhandin Rabani (R) and Ahmad Shah Massoud (C) outside a polling station in Mazar-i-Sharif on April 5, 2014. Picture: AFP.

KABUL - A bored security guard, a Kalashnikov rifle over his shoulder, stands guard alone outside an idle construction site for a 10-storey building in downtown Kabul, one of more than a dozen concrete shells with not a single construction worker in sight.

It was meant to be boom-time after decades of war and privation, with shiny new shopping malls springing up around the Afghan capital and construction cranes dotting Kabul's spectacular, snow-capped horizon over the past few years.

However, business has now ground to a halt across much of Afghanistan. Political uncertainty abounds before another presidential vote and security fears are growing as the last foreign combat troops prepare to leave.

"To invest in such an environment would be craziness," acknowledges Hameedullah Omar, marketing manager of a deserted nine-storey office complex in Kabul's main shopping district that was completed only last year.

Foreign donors worried about deteriorating security are leaving as Western forces wind down operations, leaving aid-dependent Kabul to manage its threadbare finances on its own.

The United States and Britain, two of the biggest donors, have already cut aid by up to half.

International aid groups, which provide a lifeline for marginalised Afghans, say funds are drying up fast. One U.S. non-profit group that runs 13 schools for 3,000 girls says it hasn't paid its teachers for more than a year.

Property prices have slumped as much 50 percent, rents are down 75 percent by some counts and investors have pulled funding from construction projects.

The Afghani currency has also fallen and is now at around 57 to the dollar, from 52 at the start of 2013.

"Investment is mostly on hold in Afghanistan," the deputy chief of the central bank, Khan Afzal Hadawal, told Reuters.

International institutions expect Afghanistan's GDP growth to fall from a high of about 14 percent in 2012 to about 3.5 percent this year. The World Bank has said more uncertainty could dampen growth further this year.

The International Crisis Group think tank said in a report released last week that the number of attacks by Islamist insurgents had risen since the drawdown of foreign troops began, and forecast a bloody future unless there was more foreign assistance.