In Avascent Analytics’ new data release, only one country’s defense budget declines year-on-year between 2014 and 2019 – Afghanistan. While other international defense budgets are forecasted to experience a short-term decline in the next few years, those same defense budgets are also forecasted to begin rising again by 2019. However, Afghanistan faces a precipitous and prolonged decline in funding. In a world that is becoming more optimistic every year about the global economic recovery and defense procurement, why the pessimism about Afghanistan?
The answer lies in the fact that Afghanistan doesn’t have much of a defense budget at all on its own. In the past five years, the Afghan MoD has annually contributed about $700M to its country’s defense. In comparison, the US through the Afghanistan Security Forces Fund (ASFF) has annually contributed about $5.4B. Over 88% of the funding for the defense of Afghanistan comes from American military aid. As a result, increases and decreases in US military aid dictate the budgetary fortunes of Afghanistan’s MoD.
As America’s own military is facing budget cuts, it’s not difficult to imagine that military aid to Afghanistan would drop as well, but other political factors serve to amplify the severity of the cuts. The public’s general lack of support for operations in Afghanistan and the absence of a status of forces agreement with the Karzai government give politicians very little incentive to keep funding Afghanistan’s MoD. Furthermore, politicians seem to be skeptical of US aid’s efficacy in the face of rampant corruption, as evidenced by a clause in the recent omnibus appropriations bill that prohibits US aid from directly benefiting the President of Afghanistan. Finally, adding injury to insult, a controversial DoD project, which Congress unsuccessfully tried to halt, procured Russian-made Mi-17 helicopters for the Afghan Air Force, instead of US-made helicopters. Such developments likely tempered politicians’ enthusiasm for funding Afghanistan’s defense procurement.
With these considerations in mind, Avascent forecasts that over the next five years Afghanistan’s defense budget will fall by 4% each year, a prediction that is more pessimistic than the Pentagon’s own forecast, but that is seemingly confirmed by Congress’ new omnibus appropriations bill, which cut the Pentagon’s request for the ASFF by 20%. These cuts will also likely hit the investment accounts hardest, with procurement decreasing by 6% each year, since the Afghanistan government is likely to push money to the personnel and O&M accounts to keep soldiers employed and to maintain its heavily-used platforms. Projects that could suffer include large procurement programs for 296 mobile strike force vehicles, 8 C-130H Hercules, and 40 Super Tucano trainer jets. Considering the depth of the cuts in the recent appropriations bill, Afghanistan’s budget has the potential to decline even faster. The administration’s budget request for 2015 will tell us more when it is released in March.