The Economic Effects of the Soviet War in Afghanistan

Abstract

During the last nine years the Afghan economy has suffered from the Soviet invasion tremendously. Exact data on material losses is not available. However, by estimating the potential GNP-losses and the damages to the capital stocks and the infrastmcture, the overall material losses can be estimated at approximately $ 13 billion. Apart from these material losses around 6 million Afghans were forced into exile as refugees, 1.2 million civilians were killed, and some 2 million people were displaced within Afghanistan. Agricultural and industrial output declined to 40 - 60 % of the production level of the preinvasion period. All damages have been the result of a “scorched earth” -policy adopted by the Soviet Union especially since 1985 to combat the freedom fighters and to destroy their strongholds within the country. With the withdrawal of the Soviet troops from Afghanistan the country faces new and complex problems resulting from the destruction of the socio-political and economic structure caused by the Soviet invasion. Moreover, the creation of new antagonistic and radical groups endangers the future integrity of the country and the reconstruction of its economy.