USAID SARI Energy Countries

Afghanistan

Energy Sector Overview

Afghanistan, (which literally means Land of the Afghan) is a mountainous land-locked country located in Central Asia. It has a history and culture that goes backover 5000 years. However, with more than two decades of war and chaos, and threeyears of drought in the late 1990s; Afghanistan's agrarian economy was inpoor condition, by time the Taliban was removed frompower, by end of 2001. Afghanistan now has a democratically elected government. After winning an election, President Hamid Karzai, who had previously served on an interim basis, was officially inaugurated on October 9, 2004. Since then, there has been marked improvement. For the Afghan fiscal year, which ran fromMarch 21, 2004 to March 20, 2005; the gross domestic product (GDP) growth was 8 percent. Foreignaid has been helpful to Afghanistan, and pledges of assistance now total almost $15 billion. In March 2004, President Karzai urged foreign donors at a conference in Berlin to renew their commitmentsto Afghanistan, while presenting the donors with a $28 billion, 7-year economic development program. It is estimated that Afghans living outside the country had invested $3 billion in Afghanistan (out of an economy with GDP of around $6-$7 billion). The government has been pushing financial sector and customs reforms, along with a plan to promote private investment in the energy sector.

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