Tuesday, September 16, 2014

Afghan official says government is nearly broke --- KABUL — Afghanistan’s central government is nearly broke and needs a $537 million bailout from the United States and other international donors within “five or six days” to continue paying its bills, a senior Afghan finance official said Tuesday. -- Crippled by a growing budget shortfall, the Afghan government has spent hundreds of millions of dollars of easily accessible reserve funds this year, said Alhaj M. Aqa, the director general of the treasury at the Ministry of Finance. -- The government was barely able to cover its September payroll for more than 500,000 national and provincial employees, he added. And with its October payroll deadlines approaching, Aqa said the country’s financial challenges are now “critical.” -- Officials blame the financial woes on the ongoing stalemate over who won the election to replace outgoing President Hamid Karzai. -- “We hope they will pay for us, and we are asking at once,” Aqa said of ongoing discussions with the U.S. government and other international donors. “They are asking me when I need it, and I told them this week or we will have a problem.” -- If additional money is not allocated, Aqa said, the government will have to begin deferring payment of bills for items ranging from fuel for government vehicles to official stationery. -- The fiscal crisis could also hamper the government’s ability to feed more than 350,000 Afghan soldiers and police, Aqa said. Salaries for police and army personnel are not at risk because they are paid with funds that come directly from the U.S.-led coalition. --- A senior U.S. Embassy official in Kabul acknowledged ongoing discussions between Afghan and American officials over how to resolve the impending crisis. In a statement, the embassy said it is “working to find ways to help the new government meet some of its challenges and priorities using resources already allocated.” -- Though U.S. officials stressed they do not envision the budget problems will require a new appropriation from Congress, any additional assistance could prompt fresh scrutiny over future American spending in the country. -- An official with the World Bank said the organization was also “part of the discussion” but declined further comment. The Afghan government’s request for additional funds would help it pay its bills until the end of the budget year in December, Aqa said. -- Afghanistan has an annual operating budget of about $7.6 billion, about 65 percent of which comes from international assistance. The current fiscal crunch is a result of a 25 percent shortfall in Afghanistan’s domestic revenue collection from taxes and customs tariffs this year, Aqa said. -- He said the gap was created by the country’s nearly yearlong presidential contest, which has reduced foreign investment and made Afghans skittish about spending money. --- According to the World Bank, Afghanistan will need more than $7 billion annually for the next decade to sustain a functional government, maintain infrastructure and fund the Afghan army and police. -- Since the fall of the Taliban in 2001, the U.S. government has appropriated $104 billion rebuilding and supporting the Afghan government, military and public services, according to the Office of the Inspector General for Afghan Reconstruction. - Read More, Tim Craig, Washingtonpost

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