Afghanistan's economy will maintain its robust growth this year but security, better roads and lower oil prices are needed to keep a lid on inflation, the Governor of the Central Bank of Afghanistan said on Wednesday.
Anwar-ul-Haq Ahady said refugees returning home to work the land and generous international largesse fuelled strong growth.
"This year, growth will be 16 percent, maybe a little more," he told Reuters in an interview on the sidelines of an annual Islamic Development Bank meeting in Tehran. He said this was a slight cooling from 18 percent growth in 2003 and 29 percent in 2002.
"For 25 years the land was not utilised, land use in the war was less than 50 percent," he added.
Many Afghans fled their mountainous homeland while mujahideen guerrilla fighters battled Soviet forces in the 1980s.
One million refugees have returned from Iran since 2002, following the fall of the ultraconservative Taleban in 2001.
"And there is a massive injection of money from abroad," he continued, explaining that $2 billion had poured into a gross domestic product of $5 billion.
Ahady said virulent resistance from die-hard warlords, twinned with the problems of perilous roads, meant supplies were getting increasingly costly.
Afghanistan is running an enormous current account deficit, importing some $2 billion-worth of goods and exporting a humble $170 million-worth. Ahady said there needed to be a shift from pure aid funds to building infrastructure such as power plants.
With another few years of foreign assistance he said the economy could settle into the mould of Yemen or Bangladesh. At that stage it would be running growth at three or four percent.
The private sector is getting off the ground in areas such as bottling and food oils. Further advances would demand legal adjustments and better security.
Ahady had no reliable unemployment data but said there was evidence jobs were being created at a healthy rate. Semi-skilled Pakistani labourers have been crossing the border for work.
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