Afghans Seek Aid to Cover Budget Gap

The government appealed Tuesday for international help to cover a budget deficit of nearly $260 million, promising not to print money or borrow to cover the shortfall.

Finance Minister Ashref Ghani said the government had set an operating budget of $460.3 million for fiscal 2002-03 but expects domestic revenue of only $83 million. With $22.5 million in public sector pay arrears to cover as well, he said, promised grants of just over $140 million were not enough.

“There is a substantial shortfall,” Ghani said at a news conference in Kabul, the capital, “but we have a determination not to print money ... and a consensus not to borrow.”

The operating budget covers the cost of running the government and the civil service.

International donors have pledged hundreds of millions more in aid, grants and loans, but most of that is linked to development projects.

Of the approximately $140 million pledged for the operating budget, $100 million is from the World Bank and $20 million is from the United States. India and Pakistan each pledged $10 million.

Ghani said the government was making progress in collecting revenue, citing deliveries of more than $200,000 from provincial capitals in the last few days. In the past, provincial warlords treated revenue collected in their fiefdoms as their own.

The Finance Ministry, where Ghani held his news conference, mirrors the state of the economy--paint peeling off walls, broken windows, doors hanging from hinges and rooms packed floor to ceiling with dusty files.

However, in the same way workers were feverishly making repairs to the ministry Tuesday, the government is trying to knock the economy back into shape, Ghani said.

“There is a tremendous amount of invisible work going on at the moment,” he said.

He said it was “premature” to say when the Afghan currency, the afghani, might be replaced, although other officials have said it is only a matter of time.

Officials have little idea how many afghanis--trading now at about 40,000 to the dollar--are in circulation because previous governments printed more any time they needed to pay salaries.