Afghan Government Faces Cash Crunch
Source: NYT
The Afghan government is supposed to cover less than half its own bills this year, yet achieving even that modest goal is proving an unexpected challenge, Afghan and Western officials said.
A confidential assessment of Afghan finances by the International Monetary Fund said the potentially severe cash crunch was caused by widespread tax evasion abetted by government officials, the increasing theft of customs revenues by provincial governors and softening economic growth.
The I.M.F. assessment, which has not been publicly released but was described by American and European diplomats who were recently briefed on its findings, estimated that Afghan revenue in the first quarter of the year was roughly 20 percent to 30 percent short of an informal target the fund had set for the government.
After a decade of steadily growing tax and customs revenue, the budget shortfall has caught Afghanistan’s international backers by surprise. Diplomats portrayed it as an unwelcome reminder that the Afghan government remains weak and corrupt — and years away from being able to pay its own expenses.
Read more: http://www.nytimes.com/2013/05/03/world/asia/afghan-government-faces-cash-crunch-imf-says.html?pagewanted=all
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