Afghan university teacher makes economic strategy

KABUL (Pajhwok): An Afghan teacher at California University hailed current economic efforts in Afghanistan and suggested a bailout strategy for the economic revival of Afghanistan when the situation deteriorated from inflation to deflation.

Ustad Mohammad Alam Ahmadzai during an exclusive interview with Pajhwok Afghan News defined a bailout a strategy in which the state offers financial cooperation, prints banknotes and provides it to companies, producers and banks to work resulting in the overall economic development of the country.

He said during the past regime there was emphasis on open market economy but he was against it because adaptation to an open economy needed a transition period and in the current circumstances, it was not suitable for Afghanistan.

Ustad Ahmadzai said if the economic system of the US is observed it shows that this country also embraced open market economy gradually.

He said currently, there was a mixed economic system functional in Afghanistan because the government also interfered in the market.

He said: “Currently, the economy is driven by internal revenue, although there are problems, but in any case, the work being done is admirable, the good news is that there is more trust and honesty, therefore, the money is collected and spent well, In the previous era, there was income but there was corruption and we could not collect money in a proper way, and spend it on the reconstruction and reconstruction of Afghanistan, this current situation is not good for the future we call it economic contraction because the pressure on the economy is high and the economy is shrinking, while we need to grow our economy, expand domestic production and have a visionary plan, we cannot achieve self-sufficiency in this economy, those who are policymakers, I hope they will try to get out of this situation and go to a better situation so that Afghanistan could have stable future and the Islamic Emirate also achieve its economic goal.”

He recommended that Afghanistan should have a mixed market economic system at the moment because the private sector is not stable.

Ustad Ahmadzai said: “We cannot use American and European economic plans in Afghanistan, Afghanistan is a separate country, therefore, it is useful for us to have some government intervention in the market, because we cannot move the economic wheel forward without the government, measures recently taken such as the revival of government enterprises and the allocation of budget for them were positive, but it should not be for a long-term and again we come to the point that embracing open market economy needed time.”

Referring to the economic situation in the previous regime, he said: “First, we should have ended mixed and uncertain situation, then we should have gradually made the laws, now we should have entered the free market, the decision made at that time did not have a fruitful outcome, another point is that corruption made a lot of damage and corruption is found where there are no laws, it turns free market a thief market, oil and gas mafias were incepted, it was because there were no laws at that time, like many settlements were built, the money is lost, in other countries where the settlement is built, the money goes to the government account, then it is gradually paid, but in Afghanistan this law was not known, there was mafia and corruption, there was no will also therefore Afghanistan remained poor.”

He said he has made an economic strategy for the economic system of Afghanistan.

“As I told you before, Afghanistan is in a state of contraction or under pressure and this should not last for a long time and this situation should end. There is a term called bail out and it should be put into work. A country can never progress under many impositions such as restrictions on the banking sector, private sector, production, but still, I congratulate the government for its many achievements. People don’t have savings; they earn only to avoid starvation. This is the best situation; we have gone from inflation to deflation. In the current situation it is useful for the government to [bail out], it should print money, provide it to companies, manufacturers, banks and institutions for work and investment,” Ahmadzai added.

Bailout: A bailout is the injection of money into a business or organization that would otherwise face imminent collapse. Bailouts typically go to companies or industries which directly impact the strength of the overall economy, rather than just one particular sector or industry, according to investopedia.

According to him, the bailout is for when the economy is under pressure, the private sector lacks money and the economic cycle is moving very slowly, then it is fruitful for the government to print money and devise a plan.

He says currently thousands of young people are leaving the country due to unemployment and this phenomenon will be addressed if the private sector is strengthened and supported financially.

About the print of new banknotes and inflation, Ahmadzai says: “Yes, now we are moving from inflation to deflation, and we have about a 15 percent chance. According to reports, our own economy’s annual production is 15 billion, 15 percent of the annual amount of money that we print and inject into the market. It will not have a negative impact. Inflation may rise by five percent, but 10 percent will be better than in the previous situation. But with this, the government should also have another program to find a way back, like in America, when one dollar leaves the bank, it circulates 100 times and goes back to the central bank.”

Unfortunately, in Afghanistan, it circulates five or eight times. People remain poor because of this. At that time, I also gave a plan to [former president] Ashraf Ghani, so that we can collect five billion per month from the market, and return it to the reconstruction projects. Let’s invest, so let’s separate it on that basis, so that such money goes to people and companies.”

He said that the bailout is also very beneficial to the common people, because the same people visit the companies, work there and earn money.

Ahmadzai says that the government should make a regular plan to separate it in consultation with the private sector and with the cooperation of technical people and work on laws in this area.

He said that now a portion of the money of the Islamic Emirate goes to the poor people, thousands of people are registered with it, they pay cash, and with the bailout, the government’s income is also increasing in addition to the development of economic activities.

He says that in 2020 and 2021, the American economy has deteriorated greatly due to Covid-19, but the president at that time made a bailout, then the current president did, and as a result, the economy came to a standstill.

Regarding whether he shared the bailout plan with the current Afghan government or not, Ahmadzai said: “No, I did not give this plan and I hope it reaches them through you.”

He adds that the government should pay attention to his plan, discuss it with professionals and implement it.

According to him, with this, a good economic situation will come in Afghanistan soon, but if this does not happen in the next two years, Afghanistan may face inflation again.

nh/sa

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