BACKGROUND: As Afghanistan completes its “Decade of Transition” and heads into its “Decade of Transformation,” it is important not to lose sight of what already has been accomplished. During the past dozen years, the country has achieved major gains in the fields of education, gender equality, social mobility, health care, and one of the most vibrant and free media landscapes in Central Asia. A new generation of young people has arisen who presume more individual rights and respect and demand a brighter future than their parents. According to a recent RAND Corporation study of 20 major post-Cold War civil-military interventions, Afghanistan recorded the greatest improvement in its Human Development Index score (a composite measure of health, education, and income by the UN Development Program), the second greatest cumulative growth in per capita gross domestic product (based on International Monetary Fund data), and the third best improvement in its government effectiveness score (measured by the World Bank).

But the impending U.S. and NATO military withdrawals could inflict severe short-term pain on the national economy, sharply curtailing the country’s rapid GDP growth rate if not actually shrinking it. Not only are local contracts and jobs associated with the foreign military presence declining, but both foreign and Afghan investment capital is leaving the country for safer havens due to fears that security will worsen after the withdrawals. The national currency has also been losing value relative to foreign currencies. Drug trafficking is still pervasive even as Afghanistan’s legal economy remains heavily dependent on a level of foreign assistance that is not anticipated to endure at such high levels in future years. At present, Afghanistan typically ranks as one of the largest aid recipients of those countries that have troops fighting there. After their troops leave, the aid levels will likely be reduced.

Afghanistan’s long-term future rests on the country’s degree of integration with the rest of Central and South Asia, but it also needs a more benign regulatory and security environment to entice foreign entities to provide the capital and technologies to exploit its vast potential mineral wealth and transport these riches to foreign markets. Although the country’s mineral wealth is estimated at trillions of dollars, Afghanistan’s uncertain security and regulatory environment is preventing the much hoped construction of infrastructure for mining and resource transportation. The Afghan parliament is still debating a mineral law that meets international standards of transparency. Many signed contracts with potential foreign investors will expire soon unless appropriate legislation is enacted. The Afghan government desperately needs the revenue to pay for the war and critical public services. One important task for next year’s NATO summit will be to determine how to sustain the large ANSF constructed by ISAF, whose costs vastly exceed the entire Afghan government’s budget, with additional foreign funding.

The Obama administration has proposed US$ 3.4 billion in civilian assistance for Afghanistan in 2013, making the country again the largest recipient of U.S. government foreign aid. These funds will cover a wide range of Afghan expenses including subsidizing the costs of holding the national elections and mitigating the reduced local contracts and jobs caused by the U.S. military withdrawal. But the Afghan government needs to make more progress in meeting its Tokyo Mutual Accountability commitments. In addition to free elections, these include improving governance, upholding human (especially women) rights, fighting corruption, and transitioning from a donor- and service-driven economy to one that emphasizes private sector-led growth. In return, the U.S. and other countries are seeking to raise the proportion of direct assistance going to Afghan government institutions rather than foreign ones in order to augment the Afghan government’s civilian capacity and promote the country’s sustainable development.

IMPLICATIONS: On July 3, the U.S. wisely announced the creation of a new two-year US$ 175 million bilateral incentive program to support Afghan government projects that would make specific and concrete progress toward the Tokyo goals.  The administration has also said it would consolidate U.S. economic programming, end U.S.-funded stabilization programs, decrease new infrastructure spending, and focus on building Afghan government capacity to maintain prior U.S. investments.

The Afghan economy remains vulnerable to political setbacks. The all-important presidential ballot, scheduled for April 5, 2014, should see the first transfer of power from one freely elected Afghan government to another. The Afghan constitution endows the president with the power to appoint most national and even local officials, including provincial and district governors and police chiefs. The hope was that the country’s traditional political system, based on dialogue and consensus building, would counterbalance the dominant formal powers of the Afghan presidency. But critics accuse Karzai of making a show of consulting a wide range of stakeholders but then appointing his allies and other elites whose support he needs to dominate key institutions, including the Afghanistan Independent Human Rights Commission and the Afghan High Peace Council, which is supposed to negotiate peace terms with the Taliban.

Although we are less than one year away from the scheduled national elections, Afghanistan has yet to see the emergence of a strong presidential contender or electoral coalitions that have the potential to attract much support overall or across the country’s major ethnic groups. Meanwhile, European-sponsored national law and justice development programs are lagging behind, explaining why some Afghans in rural areas turn to the Taliban for legal judgments and enforcement.

In June, the Afghan National Security Forces (ANSF) assumed primary responsibility for ensuring security throughout the country. The NATO forces still in the country have now formally transitioned entirely to a support role. In his January 2013 State of the Union address, President Obama announced that 34,000 U.S. troops will depart Afghanistan within a year. That will bring U.S. forces down to around 32,000 by early 2014, with further decreases likely delayed until after the April 2014 presidential elections. Other foreign military contingents are following a comparable steep downward glide path.

A major complication with the ground war is that the Obama administration has yet to announce how many U.S. troops it would like to keep in Afghanistan after 2014. At a recent congressional hearing, Peter Lavoy, Acting Assistant Secretary of Defense for Asian and Pacific Security Affairs, said that the Pentagon was considering such factors as progress in developing the Afghan National Security Forces, defeating al-Qaeda in the region, convening national elections in April 2014, advancing the peace process between the Afghan government and the Taliban, establishing a favorable regional security environment, and negotiating bilateral security agreements with the United States and NATO. The alliance must await the U.S. decision before determining its own force levels for its new post-2014 train, advise, and assist mission in Afghanistan.

The administration’s lengthy decision-making process regarding U.S. troop levels after 2014 risks creating serious problems. In particular, the uncertainty is reinforcing the widespread abandonment narrative that the West was now prepared to again, as after the Cold War, to wash its hands of Afghanistan after a decent interval. In addition to dispiriting Washington’s Afghan allies and emboldening its adversaries, the uncertainty over the continued U.S. military presence is encouraging third parties such as Pakistani actors to hedge against a possible complete withdrawal by maintaining supportive ties with the Taliban. The Pakistan-U.S. relationship is held together by common interests rather than a genuine sense of partnership or shared values. The war in Afghanistan has been a source of tension between them but also helped hold them together. With the U.S. military withdrawal, and the resulting decline in U.S. aid to Islamabad, this source of cooperation will weaken.

CONCLUSION: A failed presidential election would make a zero troop option more likely. The Obama administration should appoint a senior diplomat whose primary responsibility would be to ensure that Afghanistan will hold free and fair national elections on April 5. U.S. support for Afghan governance and security needs to focus more on law and justice issues. The White House should also announce soon at least a minimum post-2014 figure above zero while simultaneously declaring its willingness to renegotiate the figure with the next Afghan government, reflecting the reality that Karzai’s successor could repudiate any deal negotiated by his predecessor.

AUTHOR’S BIO: Dr. Richard Weitz is a Senior Fellow and Director of the Center for Political-Military Analysis at the Hudson Institute.