Economical Aspects
When looking at the economic aspect of this issue, many factors must be considered. This topic ranges from trade (imports/exports), exploitation of resources, geographic features, and domestic and international relations.
Basic facts:
The worlds largest producer of opium.
Major exports: Opium, fruits and nuts, handwoven carpets, wool, cotton, hides and pelts, precious and semi-precious gems
Partners in Exports: Pakistan, India, Russia, Iran
Industries: small-scale production of bricks, textiles, soap, furniture, shoes, fertilizer, apparel, food-products, non-alcoholic beverages, mineral water, cement; handwoven carpets; natural gas, coal, copper
Agriculture Products: opium, wheat, fruits, nuts; wool, mutton, sheepskins, lambskins
Labor force: 15 million people
Agriculture: 78.6%
Industry: 5.7%
Services: 15.7%
The Opium Game
(Image from National Geographic's Afghan Heroin:The Lost War)
Afghanistan is a landlocked country, making exports/trade difficult. Much trade is spent smuggling heroin and other hard drugs to Russia and other surrounding countries (1/3 of GDP is from opium, in 2005 it supplied 89% of worlds opium) (pbs.org). Because this is black market economics, the government, and country as a whole doesn't benefit from the profits made. Instead, wealth and power given to local and tribal drug lords. Because of power drug lord and Jihad power, the textbook economic strategies that have been attempted to increase the financial status of the country don't apply.
Because of the geographic features of country, much of the population is distributed amongst small villages and tribes across the country. This creates a weak centralized government, and thus a weak centralized currency. If there isn't a strong government backing currency, then paper money becomes virtually useless. This is why in recent times, Afghanistan is pushed to increase capital in other areas, such as Human, intellectual, social, and institutional capital.(Ghani, 2006)
Because of the geographic features of country, much of the population is distributed amongst small villages and tribes across the country. This creates a weak centralized government, and thus a weak centralized currency. If there isn't a strong government backing currency, then paper money becomes virtually useless. This is why in recent times, Afghanistan is pushed to increase capital in other areas, such as Human, intellectual, social, and institutional capital.(Ghani, 2006)