1. National Priority List

National priority programs in the Afghanistan National Peace and Development Framework, the ten-year development strategy unveiled at the October 2016 Brussels Conference on Afghanistan—commits. Self-Reliance agenda, National Priority Programs (NPPs), and various sector master plans.2 The CPS also embodies ADB’s corporate strategy as reflected in Strategy 2020 and the Midterm Review of Strategy 2020. 3 ADB’s strategic priorities and sectors in Afghanistan complement the.

At a July 9 speech to the 2^nd Global Manufacturing and Industrialization Summit in Yekaterinburg, Russia, President Putin presented a brilliant intervention into the visionless anti-growth (and anti-human) ethic characteristic of the neo-liberal world order when he made Russia’s leadership in fusion energy a national priority.

Speaking to 2500 representative from the public and private sector, President Putin laid out the paradox of humanity’s need for development which has often come at the expense of the health of the biosphere by saying: “It is not yet clear how to combine long term development and production build up while preserving nature and high living standards”.

Attacking the anti-growth technocrats who are promoting a halt to progress and decrease of the world population, Putin said “it comes down to appeals to give up progress which will make it possible at best to perpetuate the situation and create local well-being for a select few. At the same time, millions of people will have to settle for what they have today, or it would be more appropriate to say what they don’t have today: access to clean water, food, education and other basics of civilization”.

Separating himself from that cynical worldview, Putin stated “it is impossible and pointless to try to stop human progress. The question is; which base can this progress realistically be built upon to achieve the millennium development goals set by the United Nations?” Answering his own question, Putin laid out the important role of fusion power as the foundation for a harmonization between the realm of nature (the biosphere) and the realm of creative reason (the technosphere): “super-efficient scientific, engineering and manufacturing solutions will help us establish a balance between the biosphere and the technosphere… fusion energy which in fact is similar to how heat and light are produced in our star, the sun, is an example of such nature-like technologies.”

Putin went onto describe the driving role of the Kurchatov Institute which has already begun a project on a fission-fusion hybrid reactors which will be operational by 2020 and its role in driving advanced science which will be a creative force for the International Thermonuclear Experimental Reactor (ITER) program in France which is scheduled to go online with its first plasma by 2025.

The Recovery of a Forgotten Paradigm

Once upon a time, such speeches as Putin’s were a common thing in the west as scientific/technological progress was recognized as civilization’s basis of existence.

That was before the “new morality” was created in the wake of the 1968 sex-drugs-rock and roll counterculture. The “old obsolete paradigm of the nuclear family” which Woodstock sought to replace recognized the simple truth that “since we will all someday be dead, what good is our lives if we have not left something better for our children and those yet unborn?” This was the foundation for the faith in scientific and technological progress that animated mankind’s combat against fascism in WWII and the launching of humanity out of its limits by exploring space and the secrets of the atom.

Atomic Energy Commission Chairman Lewis Strauss expressed this ethic brilliantly in 1958 when he said: “I hope to live long enough to see the same natural force which powers the hydrogen bomb tamed for peaceful purposes. A breakthrough could come tomorrow as well as a decade hence. Out of our laboratories may come a discovery as important as the Promethean taming of fire.”

Why have we not yet attained fusion?

The valid question yet remains: If statesmen and policy makers dominant during the post-WWII years believed in fusion power so deeply, why did we not attain those lofty objectives set down as national goals for fusion by the 1980s or earlier?

The simplest way to say it is that the Malthusians won.

The 1970s saw the west suffer a subtle coup d’état with the elimination of all nationalist leaders committed to defending their populations from the re-emergence of a financial oligarchy which had only recently failed to achieve world domination under Hitler and Mussolini. After the last bastion of resistance to this coup was killed with the murder of Bobby Kennedy and MLK in 1968, non-governmental organizations were quickly formed to usher in a new ethic under the rubric of the 1001 Club, Club of Rome, and World Wildlife Fund. These organizations were stacked with former eugenicists and imperialists like Prince Bernhard of the Netherlands (founder of 1001 Nature Trust and Bilderberg Group), his friend Prince Philip Mountbatten, and Sir Julian Huxley. All three oligarchs were co-founders of the World Wildlife Fund.

These groups funded a new “science of limits” in order to promote the idea that mankind’s biggest threat was mankind itself rather than scarcity, war, famine or any other by-product of imperialism as was previously believed. Prince Philip embodied this elitist ethic unabashedly when he said in 1980 “Human population growth is probably the single most serious long-term threat to survival. We’re in for a major disaster if it isn’t curbed…We have no option.”

One early Malthusian who gained control of US policy making during this period was Henry Kissinger who moved the USA away from a policy of assisting former colonies’ desire for industrial progress and towards a policy of “population control” under his NSSM 200 Report of 1974 which said: “The U.S. economy will require large and increasing amounts of minerals from abroad, especially from less developed countries. That fact gives the U.S. enhanced interest in the political, economic, and social stability of the supplying countries. Wherever a lessening of population pressures through reduced birth rates can increase the prospects for such stability, population policy becomes relevant to resource supplies and to the economic interests of the United States… Although population pressure is obviously not the only factor involved, these types of frustrations are much less likely under conditions of slow or zero population growth.”

Kissinger was joined by another Malthusian named George Bush Sr., then a congressman chairing a Task Force on Earth, Resources and Population who said on July 8, 1970: “It is almost self-evident that the greater the human population, the greater the demands for natural resources… The paramount question deals with an optimum human population. How many is too many people in relation to available resources? Many believe that our current environmental problems indicate that the optimum level has been surpassed.”

As Sir Kissinger and Sir Bush (knighted in 1995 and 1993 respectively) re-wired America towards an aggressive anti-growth foreign policy for third world countries, a policy of de-industrialization was underway within America itself as the productive machine tool sector and small/medium agro-industrial system was being dismantled in preparation for an age of neo-liberal globalization. To ensure that the new ethic of “adapting to limits” rather than attempting to transcend those limits with new discoveries was maintained, such programs as the Apollo space program were cancelled for “budgetary reasons” followed soon thereafter by a conscious undermining of the ambitious fusion energy programs which had been unleashed during the 1950s and whose budget had risen from $114 million in 1958 to $140 million by 1968. The budget would continue to rise with record breaking achievements led by Princeton’s Plasma Physics Laboratory which broke the 44 million degree mark to initiate fusion in 1978 and broke international records by achieving a 200 million degree plasma by 1986. Working alongside the Fusion Energy Foundation, an organization started by American economist Lyndon LaRouche, Congressman Mike McCormack (D-WA) led the passage of a Bill in the House and Senate making fusion energy a national priority for the USA in 1979.

Rather than fund fusion and encourage the construction of new designs and prototypes so necessary to this transformation of society, the opposite occurred, as a systemic underfunding, and collapse of vision led to a demoralization of nuclear scientists who could not carry out their experiments. Quitting his job as Director of Fusion of the US Department of Energy in protest of the sabotage, Ed Kintner said this “leave[s] the fusion program without a strategic backbone—it is a collection of individual projects and activities without a defined mission or timetable… The plan to increase industry involvement in fusion development is postponed indefinitely, and the industrial and economic benefits of high-technology spin-offs, surely an increasingly important by-product of an accelerated fusion technology program, will be lost.”

Indicative of the dishonest philosophy used to justify America’s rejection of fusion research, one of the fathers of the neo-Malthusian revival Paul Ehrlich who authored the Population Bomb in 1968 said in a 1989 interview that providing cheap, abundant energy to humanity was “like giving a machine gun to an idiot child”.

A disciple and co-author of Ehrlich who went onto become “Science Czar” under Barak Obama was biologist John Holdren who wrote in 1969: “The decision for population control will be opposed by growth-minded economists and businessmen, by nationalistic statesmen, by zealous religious leaders, and by the myopic and well-fed of every description. It is therefore incumbent on all who sense the limitations of technology and the fragility of the environmental balance to make themselves heard above the hollow, optimistic chorus—to convince society and its leaders that there is no alternative but the cessation of our irresponsible,all-demanding, and all-consuming population growth.”

The Immanent Death of Malthusianism

President Putin has recently made the point during a June 27 interview with the Financial Times that the neo-liberal order which has defined the west over the past several decades is obsolete. With his strong support for fusion power and a return to a global industrial growth policy alongside China’s Belt and Road Initiative, President Putin has clearly identified the neo-Malthusian worldview as interwoven into the fabric of liberalism. Just as liberalism denies objective principled truths in favor of popular opinion, neo-Malthusianism can only thrive when a “consensus” of pessimism blinds its victims to the truth of humanity’s natural ability to make constant willful discoveries and translate said discoveries into new technologies that bring our species into ever greater states of potential (material, moral and cognitive).

While the Malthusian animal is committed to the belief that humanity may only adapt to scarcity under a closed system of fixed resources managed by privileged elites, humanists, like Putin and Xi Jinping, recognize that mankind’s nature is found not in the flesh, but in the powers of mind which characterize us as a unique species capable of making unending discoveries in a growing creative universe which can be characterized in the same manner that Beethoven described his music: as rigorous as it is free.

This simple statement reflects a powerful truth which liberals and Malthusians cannot stand: The universe’s natural power of creative change- discoverable by the matured power of creative reason allows for the co-existence of lawfulness and freedom under the sole condition that we harmonize our wills and reason to a love of truth and our fellow beings.

Source: Strategic Culture Foundation

On November 27-28, the Afghan government, United Nations, and countries and agencies supporting Afghanistan’s development will hold their biennial high-level conference in Geneva, Switzerland. The conference will occur in the shadow of the recent parliamentary elections and in the run-up to the presidential election scheduled to be held during April-June 2019. Afghanistan’s last presidential election, in 2014, was followed by—and arguably precipitated—a fiscal crisis, which brought the country to the verge of fiscal collapse. What are the lessons that should be learned from the 2014 experience, and what can be done to avoid a repeat in 2019, which would be even more disastrous?

What Happened in 2014?

The 2014 crisis, driven by a hemorrhage of government revenue as well as a slowdown in aid disbursements during much of the year, was extremely costly for Afghanistan, resulting in the Treasury running out of cash, its inability to meet contractual obligations, and a build-up of arrears (a serious failing by international standards). These problems necessitated an “emergency” request for over $500 million in aid in late 2014 to ease the fiscal strain.

Spurred by effective leadership in the Ministry of Finance (MoF), selected tax increases, and stronger revenue mobilization efforts, there was a fiscal turnaround during the next three years. By 2017, total revenue slightly exceeded its 2011-12 peak of 11.6 percent of GDP. But this largely represented making up lost ground, meaning that fiscal progress was essentially stalled over this half-decade.

Revenue trends were already deteriorating in 2012 and 2013, but there was a largely revenue-precipitated “perfect storm” in 2014. Revenue fell by 1.6 percent in nominal Afghani value in the first half of the year and collapsed by 8.5 percent for the entire year. All main categories of revenue suffered declines in 2014, and the revenue-to-GDP ratio dropped to 8.7 percent, nearly three percentage points below its peak in 2011-12. Aid disbursements also slowed down. After depleting its deposits at the Central Bank, the government was forced to impose cash controls during the second half of 2014 and, even with a last-minute influx of aid, ran up arrears on contractually obligated payments of around $200 million.

What Went Wrong?

By far the most important catalyst of the 2014 fiscal crisis was the political uncertainty surrounding the 2014 presidential election and its problematic aftermath. This uncertainty was compounded by the Karzai administration’s refusal to sign a Bilateral Security Agreement with the United States, and the U.S. administration’s announcement (between the first and second rounds of voting in the Afghan presidential election) that the U.S. troop drawdown would be completed by the end of 2016.

The Afghan economy weakened during the run-up to the election, with real GDP growth dropping sharply from near double-digit levels in the previous decade to 3.7 percent in 2013 and only 1.3 percent in 2014—below the rate of population growth and implying negative growth of average per-capita income. This reflected the lingering demand shock of sharply declining international military expenditures in-country resulting from the international troop drawdown, as well as the political uncertainty and increasing insecurity.

However, government revenue declined much more sharply than the slowdown in the economy, as evidenced by the three percent drop in the revenue-to-GDP ratio. Revenue mobilization efforts apparently slackened considerably during 2013 and especially 2014, due to a combination of:

• Shortening time horizons for officials during the election season, which strongly incentivized corruption—to maximize diversion of revenue for individual and group gain in the shrinking time remaining before the change of government.
• Shortening time horizons leading, less nefariously, to officials not trying hard to mobilize revenue.
• Diversion of revenues, especially customs, for election campaign financing and political payoffs—this may have been a significant factor in the second half of 2013 and especially in the first half of 2014, but could not explain the accelerated revenue decline in the second half of 2014 after voting.
• Businesses holding back on tax payments due to the political uncertainty—some even speculated about the possibility of a return of the anarchy and chaos of the 1992 civil war. After all, why pay taxes when there might not be any government left?
• Possible deterioration in day-to-day government management and oversight in the aftermath of the second round of the presidential election, resulting in further weakening of revenue mobilization—for example a new post-election finance minister was appointed only in February 2015.

Aggravating the Afghan government’s cash squeeze in 2014 were shortfalls in aid inflows to the budget during most of the year (only partly made up by emergency assistance provided at the end of the year). In the first half of 2014, civilian aid disbursements to the budget declined by 12.5 percent compared to the first half of 2013, and security support was down 2.7 percent.

The aid slowdown was due at least in part to the Afghan government not meeting reform benchmarks and thereby losing some aid, and government underspending that triggered lower aid disbursements from the Afghanistan Reconstruction Trust Fund’s incentive scheme. To the extent the slowdown in aid was attributable to such factors, it ultimately reflected an understandable tendency for reforms to slow down or stop during an election year, though the underspending that resulted in less aid represented self-inflicted damage that should have been avoided. A related problem was the far too optimistic budgeting of aid inflows in 2014, on which basis higher expenditures were budgeted, leaving a gap when some of the aid did not materialize.

However, lower aid disbursements during much of 2014 possibly also may have resulted, in part, from donors holding back some aid during the election period. This could have been because they wanted to wait for the final results of the election, or because they wanted to hold up aid and release it for the new administration as a positive signal.

Avoiding a Repeat of 2014

National Priority List

What are the lessons from the 2014 fiscal crisis? A repeat of this experience during and after the 2019 presidential election would be even more disastrous than what happened in 2014. It seems doubtful the international community would be as pro-active as it was then—either to resolve any disputes after the presidential election or in responding to a request for aid, like in 2014 when donors provided an additional $200 million.

To avoid a repeat of 2014, a timely, clear, and widely accepted outcome of the election would prevent or at least minimize the risk of a fiscal crisis. But aside from that, what can be done? The recommendations below would help prevent another fiscal crisis and mitigate problems that may arise during a period of inevitable uncertainty:

• Insulate the MoF, especially its leadership, from involvement in the 2019 election campaign and campaign financing. Afghanistan’s development partners should strongly reinforce this message.
• Key elements of the reform program also should be insulated, so aid inflows tied to specific reforms do not get slowed down during election season.
• Avoid making frequent changes in MoF senior staffing (especially in the customs and revenue departments) for political reasons, which, based on experience, would weaken revenue mobilization.
• Revenue targets should be reasonable, and unrealistic talk of enormous increases in total revenues within a few years avoided. But once set, revenue targets should be strictly enforced, and staff should be evaluated on the basis of performance in achieving these targets.
• Closely monitor revenue trends—which if adverse would constitute an early warning sign of fiscal problems—on a bi-weekly basis overseen by the finance minister, with reporting to the cabinet and the president on a regular basis. Moreover, revenue collection at border points should be seen as not only the MoF’s responsibility, but also needs to be supported (and not undermined) by the police, local authorities, and provincial governors.
• Monthly revenue monitoring should be supported and reinforced by international agencies such as the International Monetary Fund and World Bank.
• Apply further safeguards and oversight to customs revenues, which have been a chronic source of revenue shortfalls.
• The MoF should improve internal coordination in short-run budget management. Hold regular cash management meetings chaired by the finance minister to ensure that cash inflows and outflows are managed to avoid a cash crunch.
• While closely monitoring the fiscal situation, donors should not hold up aid to the Afghan government’s discretionary budget in the run-up to, during, or immediately after the 2019 election. Making this kind of aid—most of which goes for salary payments to civilian and uniformed personnel in the Afghan government—conditional on political factors has not worked well in the past and would not work in 2019.
• Reform targets and especially their timing need to take into consideration the constraints of election season. While the Afghan government will continue to strongly pursue the reform program outlined in the 2016 Afghanistan Peace and Development Framework and its National Priority Programs, some delays in reforms during the months around the election would be understandable in any country.
• Finally, some kind of backstop mechanism is needed to ensure that if the government does face a short-run cash crunch, it does not result in the kinds of expenditure controls, delays in payments, and build-up of arrears that were so problematic in 2014. This could involve an emergency short-run line of credit from the Central Bank, or some other effective mechanism.

M. Khalid Payenda is deputy finance minister of the Government of the Islamic Republic of Afghanistan, and William A. Byrd is a senior expert at the U.S. Institute of Peace. The views expressed are the authors’ and should not be attributed to the Ministry of Finance, Government of Afghanistan, or to the U.S. Institute of Peace, which does not advocate specific policy positions.