Introductory History of the Country

Afghanistan was a monarchy from 1747 to 1973; however, the legitimacy of the state was always somewhat precarious. The country's present borders were established when the so-called great powers sought to establish a buffer state between the then British and Russian empires. Afghanistan was virtually left out of the 19th century's globalization relative to its heyday during the Silk Route. It did, however, go through a period of state building and "modernization." Starting with Abdur Rahman Khan, this effort culminated in the reign of Amanullah (1919-1929), when Afghanistan fought a successful third war against the British, built up modern institutions of government, developed secular education, and encouraged women to remove their veils, among other reforms.

However, social conflict existed between modernizers and more conservative Afghan factions, complicated by rivalries between the Pashtun and non-Pashtun ethnic groups. Although those who held power claimed to represent the majority, their principal policy was one of 'divide and rule'. Most of the reforms were rolled back, and there was a brief period of chaos before the rule of the royal family was restored by Nader Shah (1929-1933), with a much more conservative approach to social change. Nader Shah was assassinated and succeeded by his son Zahir Sharh (1933-1973), who had a long, generally peaceful reign before being deposed by his cousin Mohammad Daoud in a bloodless coup. The Daoud government was itself overthrown by a violent communist uprising in 1978, which ushered in a long period of conflict.

From late 1979 to February 1989, Soviet military forces occupied Afghanistan, during a period marked by fierce resistance from Afghan fighters, know as the Mujaheddin, backed by the US and Pakistan intelligence services. This period witnessed a large-scale erosion of rural Afghan society and its institutions, as villages emptied and existing village hierarchies were broken down by massive displacements. As a result, authority was derived principally from the wealth and power of local warlords, a situation that was perpetuated by the Peshawar-based 'aid industry'. During the Soviet occupation, the Afghan state expanded and attempted to transform traditional society, but with disastrous results. Centralized planning and controls were superimposed on the state apparatus, and many public enterprises were established. The government structure expanded and proliferated on paper, but it became increasingly ineffective due to the protracted conflict and loss of human resources as many civil servants, particularly in the upper echelons, fled or were killed. Further declines in government capacity and effectiveness occurred after the Soviet withdrawal, and patronage-based recruitment into the civil service became the norm. Hyperinflation largely erased the value of civil service salaries, exacerbating these adverse trends.

After nearly a decade of Soviet occupation, the Geneva accords of 1988 led to the withdrawal of all Soviet forces in early 1989, but the accords failed to adequately address the issue of the post-occupation period and the future governance of the country. In 1992, UN negotiated plans for President Najibullah, the last communist-era president, to step down and for a transitional authority to take over, were thrown into disarray. Mujaheddin groups formed an alliance with a renegade government commander in the north. They entered Kabul and seized power but with no united or coherent strategy for running the government. What began as a struggle against Soviet forces mutated into internal power struggles, and the institutions that were left continued to disintegrate, creating an institutional vacuum that became entrenched.

It was into this vacuum that the Taliban stepped towards the end of 1994, as the conflict mutated still further. The Taliban fighters were largely drawn from Pashtun youths who had spent most of their lives in the refugee camps of Pakistan. The Taliban movement was seen as a way of asserting Pashtun power, to counter the Tajik, Uzbek and Hazara/Shia forces of the Northern Alliance. In addition, it was perceived as a vehicle for assessing the conservative Pashtun values they had absorbed in the madrassas that had given them what little education they had. Large numbers of foreign nationals, from Pakistan and many Arab countries came to Afghanistan, attracted by the Taliban's particular brand of radical Islam, and with plans to undertake military training in camps run by Al Quaeda.

Beginning with the catastrophic events of September 11, 2001, the world witnessed the forcible removal of the Taliban from power; the signing of a power-sharing agreement calling for a "broad-based, moderate and unitary Afghan state" by representatives of the major Afghan factions in Bonn in December 2001; the installation of an interim administration; the preparation of an ordinary budget, strategy for recovery and reconstruction, as outlined in the National Development Framework (NDF, April 2002) and National Development Budget (NDB, October 2002)²; and the convening of an Emergency Loya Jirga (traditional council of elders) in June 2002, allowing for a smooth and orderly transfer of power to a legitimate transitional government led by Hamid Karzai, to rule Afghanistan for a further two years.

A draft constitution prepared by a 35-member Constitutional Commission was reviewed by the government and a "constitutional Loya Jirga" held in December 2003 and in early January 2004 approved the new constitution which is characterized by designating Islam as the national religion, centralizing power in the presidency, and setting gender equality in principle. With the help of the United Nations Population Fund (UNFPA), the government is carrying out the first national population census in over two decades to pave the ground for national elections to be held by June 2004.

Throughout this tumultuous period, Afghan authorities have sought to assert their own leadership in the recovery and reconstruction effort. Various statements made by government leaders indicate a strong commitment to political, economic, and social development; to a free and competitive economic system, and privatesector- driven growth harnessing domestic and foreign investment — to create jobs and increase income; and, to this end, to undertaking a series of necessary policy and institutional reforms.

This section relies mainly on Barakat and Wardell (December 2001) and Byrd (October 2002). See further Appendix 1, "Historical Review of the Afghan Economy".