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Yes. Very much so. In the beginning of my first deployment, the provisional government of Iraq rejected the BSA, so we pulled out and I redeployed to Afghanista
by jl2718 6y ago
Yes. Very much so. In the beginning of my first deployment, the provisional government of Iraq rejected the BSA, so we pulled out and I redeployed to Afghanistan. During my second deployment, the Karzai government significantly reduced the BSA, and all regular forces pulled out around me. Both times, one of the biggest issues was dollars coming into the economy through US contracts and on-base merchants. This is good for them at first, but it turns the country into an import economy, and kills internal business. You can see this effect visually in the buildup of trash from imports replacing sustainable practices. 1000-year-old family farms gone fallow and covered in trash mixed with human waste. We tried to fix this with teams of Americans going around teaching Afghans how to do all the things they used to do before the onset of foreign aid.
- md_ 6y agoI don’t understand why using USD results in an import economy. There’s nothing that stops dollars from circulating domestically, is there? I was suggesting it reduces the government’s ability to apply monetary policy, but that’s a bit different than your point I think, no?
- jl2718 6y agoThere are a couple of things. The simplest one is that dollars leave the economy as soon as you deposit them in a bank because they get lent internationally versus local currency loans that stay local. The other is that imports are generally preferred in developing economies. It’s also hard for the government to tax transactions made in a foreign currency because they only really see local bank transactions and foreign exchanges.