The planning system for Afghanistan

Introduction : The State in the Economy

By the grace and mercy of Allah an Islamic revolution is taking place in Afghanistan. An Islamic government is in power and is fully committed to the development of an Islamic state and society. The state consists of the set of institutions which govern society.

Establishing a powerful system of governance at all levels of society is essential at this stage of the revolution. This is so because since the Russian occupation (1979-86 and the subsequent American subjugation) governance has been thoroughly corrupted. Urban life has become polluted by the penetration of kafir values and procedural systems. Traditional Afghan commitments are in a process of decomposition and a country wide network of imperialist sponsored NGOs and “aid” agencies are working actively for their secularization.

Moreover attempts to secularize Afghan community life remains a key objective of the imperialist fifth columnists’ counter revolutionary strategy which through acts of terrorism sabotage and propaganda seek to undermine the credibility of Islamic rule. Establishing a system of strong societal governance is an important means for defeating the counter-revolution and de-linking from the global economy and society which sustains it.

II. Objective of Planning

Planning is a means for establishing and operating a system of social governance at the national, provincial, district and community levels. The objectives of the plan should be

To transfer economic and administrative power at all levels of society to Mukhlis-e-Deen and consolidation of this power in their hands.
To uproot capitalist values and preferences from individual and community life and to inculcate in individuals and communities the desire to use economic and political acts (ma’ash) as a primary means for achieving falah in akhirah (ma’ad).
Strengthen the command of the Islamic government on major resource flows throughout the economy.
To establish a self-reliant, self-sustaining economic order which gradually delinks from the global capitalist economy and emerges as a Jihadi economy.

III. Planning process and Administration

Planning must be based on realistic estimates of available physical resources (land, water, crops, mineral and industrial output) and estimates of required resources to meet specified plan production targets. This will depend on technology available (both local and imported) for turning inputs into outputs. The key question is how much investment (in terms of physical resources) is required in each sector/ sub sector/ area in order to achieve specified production targets.

This shows that the existence of a central statistical office capable of regularly collecting data at all production levels (businesses, farms) throughout the country is of vital importance in the planning process.

Establishing plan targets (how much to produce in which sector/area/business) is a political task. Hence, it is the responsibility of a political authority (either the cabinet or a specially constituted sub-committee of the cabinet). This sub-committee should consist of the ministries of finance, economy, food, agriculture, industry, trade, and the ministry of defense (since a primary objective of the plan is to establish a jihadi economy) and religious ministries.

The sub-committee must be serviced and advised by a planning commission. The planning commission may have a centralized directorate but its offices must be established at the local, provincial, community and major business unit levels to access grass root level data and to monitor plan implementation progress. The planning commission may have hundreds of employees and shall work closely with the central statistical office

Initially, the planning commission may draw up plans only for specific sectors (food, electricity, security) specially those most affected by the occupation. Initially, the planning of the food (speciallygrain) producing sector is most important since the provision of food supply is vital for the functioning of all sectors. The planning commission must establish a set of priorities (in light of the objectives of the plan) for sectorial investment allocations. Sectorial allocation of resources should be coordinated.

The suggested priorities in the planning process for the next three years are:

Food

Defense and security

Fuel and electricity

Mining and metallurgy

IT sector

Labor upgrade

Health

The planning process must be focused on these areas to ensure coordinated progress in all sectors.

Planning is a multi-tiered process. As already noted the planning machinery should exist from the local/business/farm level to the top federal ministerial level. A planning office must be established at each major agricultural producing area and at each major manufacturing and service enterprise level.

The planning process can be envisaged as follows:

The central planning commission prepares estimates of production, investment, labor supply, natural resource needs and average wage for each major region, and agricultural area, and manufacturing and services business.
These estimates are submitted through provincial, local, community planning offices to planning offices in production units (businesses, agricultural service sectors etc).
The estimates are modified at each planning stage in light of local conditions and circumstances.
The lowest level planning area,(business level) unit finally modifies these estimates in what it regards as realistic for its area/ business.
These lowest level modified estimates by the business units are then submitted to the federal planning directorate.
Which finally coordinates all business/ area unit modified estimates in the form of a national economic plan.

The national plan must specify production, investment, prices, wages (average) targets for most primary sectors (especially grain, electricity, defense and health). Other major sectors (textile, sugar, other food, and agriculture) should be subject to ministerial supervision with special reference to price fluctuations. In some consumer goods sectors freefunctioning bazars should be encouraged but with price controls. Production targets should only be set for large businesses and agricultural areas. No production targets should be set for small and medium enterprises but for ensuring overall achievement of plan output targets estimated of probable production from the SME sector must be developed. A cooperative movement must be encouraged in both the rural and the urban segments of the consumer goods industries.

Medium sized industries (especially textile, food manufacturing, leather processing) may be grouped in the form of trusts. The trusts may be regarded as plan implementation bodies responsible for general supervision of their group of businesses and for facilitating production of supplies and for monitoring and for compliance with price and wage directives of the plan.

Effective plan implementation requires effective decentralization of decision making authority down to the lowest level but this must be combined with rigorous supervision of the plan implementation process.

The establishment of a powerful Da’wahmajlis in each major agricultural producing area and in all major manufacturing and service sector businesses is of great importance. The functions of the Da’wahmajlis will be as follows:

Ensure religious and spiritual training of all employers and employees and inculcate in them a desire to see ma’ash as a means for obtaining falah in ma’ad and to suppress inclination towards itraaf and corruption.
To refute and rebut counter revolutionary propaganda and attempts at sabotage of governing processes and environmental security threats through the development of a community based surveillance system.
To explain to employers, employees and the general public the policies adopted by the revolutionary government and to serve as a link between the public and state officials.
To assist the local/business planning officein plan implementationprocess.
The chief executive of the unit/area should be a member of the Da’wahmajlis and his appointment should be subject to its approval.
To monitor and administer provision of health facilities to units members.

IV. Planning Techniques

At the initial stage before detailed statistical data on production is available, federal and provincial ministries may be required to provide sectorial plans for achieving a politically determined (but realistic) rate of growth for the macro economy. Suppose the initially desired rate of growth for 2022-23 is ten percent. Thus each major production ministry (agriculture, construction, transport, and manufacturing) is asked to suggest the quantity of physical resources (land, water, minerals, machinery) that is required to achieve its maximum growth rate, consistentwith the targeted overall growth rate of ten percent.
The planning commission than (tentatively) estimates the availability of each physical resource (land, water, machinery, minerals) and seeks to distribute each of these resources in such a way that each sector’s growth (which may be more or less than 10 percent given the sector’s share in gross domestic production) facilitates the achievement of the politically determined target growth rate.
It may turn out given physical resource availability actual possible growth rate for 2022 is more or less than 10 percent. Then the target rate of growth for 2022 must be that which allows each sector to grow so as to achieve the realistic targeted growth rate.
As statistical estimates become more and more detailed and firm, the government can make more realistic projections of growth in resources for future years (2023, 2024 etc.). Allocation of (future) resources may then be based on these estimated resource growth projections and sectorial (agricultural, manufacturing, mining, IT etc.) production strategies should be determined by them.
The realism of these projections should be continuously checked during the plan implementation process (2022-24). See below.
Planning should be envisaged as a process for maximizing the productive growth potential of the economy in a manner which promotes religious consciousness throughout society. Developing a mass Islamic character should be a primary objective of the economic planning process.
Planning should be conceived of as a physical not a financial process. Physical planning requires:
1. Estimation of the input output requirements of key sectors. For example, estimation of the amount of physical resources (land, water, fertilizers, agricultural machinery etc.) needed to produce 1000 tons of wheat and estimation of the amount of wheat (and other resources) needed to sustain the production of 1000 units of mechanical tools. This type of production planning requires the construction of an input-output table showing the relationship between production levels of all major sectors. Constructing an input-output table is urgently necessary for effective physical planning in Afghanistan.
2. An input-output matrix based on historical data (say from 2002-20) describes the production structures (how growth in one sector depends upon corresponding growth in other sectors) as of now (i.e. in 2022). This historically determined input requirements are known as “static coefficient”. As the economy grows these input requirements of specific sectors may change – the ‘static’ coefficients become ‘dynamic’. For example, due to more use of fertilizers less land may be required to produce 1000 units of grain. Even in medium term planning (i.e. for the period of 2024-29) government may plan

to change these production coefficients – use more fertilizer and less land to enhance grain productivity etc. Dynamising production coefficients should be a major concern of medium/long term planning in Afghanistan.

Dynamising production coefficients can also be based on consultation with experts, especially those at production sites (farmers, miners, industrial workers, engineers, enterprise managers, IT professionals). The more the planning system is decentralized the more the scope for popular participation in the planning process. Advice from foreign consultants should be avoided as they have a capitalistic mindset and do not have on the ground experience in Afghanistan. Advice from production and business sites individuals is of crucial importance in the development of realistic forecasts. This is especially true in the case of large (lumpy) investments the purpose of which is to change the structure of the economy i.e. to increase productivity and reduce dependence on foreign commodity and capital imports.
Actual observation at production/service sites (and not projections of historical data) gradually leads to the identification of the input-output balance at the intra-sectorial level. This is essentially a decomposition of the input-output matrix so that material (i.e. both natural resources and manpower) balances with in major enterprises (and agricultural sites) could be ascertained and their transformation planned. This intra-sectorial ‘balancing’ exercise permits a costing of inputs and outputs at the project level – a costing in physical (both material and manpower) and not in financial terms.
During 2022-24 a statistical base may not exist for undertaking such an intra-sectorial balancing throughout the economy. Nevertheless an attempt must be made to develop intra-sectorial project specific balances for key sectors. In our view the key sectors should be defense production (especially surveillance and anti-aircraft technology), IT, construction and selected grain production allocation and mining.
For these sectors data should be obtained regarding the use of the following resources at production site level per unit of production (a) labor (by type specialized category or skill) (b) machine hours (as percentage of total time) (c) machines (and type of machinery used) (d) metal and mineral used (e) land used (f) fertilizer used (g) standard of finished product (average useful life of product and rate of wastage).
The development of a system of categories of data for classification purposes is essential. ISIC (the International Standard Industrial Classification) system, suitably modified in light of national circumstances, may be used for systematizing the data.
It must be remembered that a physical input-output matrix or a system of balances only produces a snapshot of supply constraints and demand structures at a moment in time. It ispolitical strategy which plans for overcoming present day supply constraints and demand structures. Thus the planning should focus on the preparation of two distinct input-output matrices:

An input-output table describing the physical input-output of the Afghan economy in 2022.
A projected physical input-output matrix for 2024(or 2025) describing the politically desired changes in supply and demand patterns by that year.

The planning strategy must be to move the Afghan economy from observed supply demand structures of 2022 to the politically desired supply demand structures of 2024. The main elements of this strategy are:

Promoting Islamic consciousness among the masses so that they increasingly realize that ma’ash is merely a means for earning reward in ma’ad.
DaulatAfzai i.e. public investment in key sectors (agriculture, defense production, heavy machines, IT, mining).
Reducing/eliminating consumption of luxury goods through heavy taxation on locally produced luxuries and on all luxury imports.
Delinking from the imperialist capitalist global economy through:

Nationalization of foreign trade
De-dollarization of the domestic economy and complete state control over all foreign currency inflows
Regulation of foreign investment flows by legislating that all foreign ventures take the form of joint ventures with the revolutionary government.
Immediate withdrawal from all interest based international financial institutions (IMF, World Bank, ADB, Islamic Development Bank etc.) and from WTO and WIPO.

V. Plan Implementation

As already noted ultimate responsibility for plan conceptualization and implementation should rest with a supreme ministerial council which should set planning targets and articulate planning strategy. The council should be headed by the Prime Minister and consist of all economic, defense and religious ministries of the Islamic government. The Council should closely monitor the plan implementation process through monthly progress reports submitted to it by the planning commission.

The planning commission should serve as a standing committee of the council of ministers and it should be responsible for the day to day implementation of the plan and for advising the council about the practical feasibility of the strategy and the targets set by the council. It should be responsible for continuously collecting and upgrading data through a statistical office.

Both the planning commission and its’ statistical office should have branches at the provincial, district, production site and major community levels. Both the planning commission and the statistical office should have hundreds of staff members – consisting of Ulema, tribal leaders, Taliban and other mukhliseen-e-deen spread all over the country.

Implementation of a plan is part and parcel of the planning process. Success in achieving planned targets depends eventually upon the effectiveness of plan implementation. Plan implementation requires the fishing out of actual data at the site of production of goods and services and testing its correspondence with desired outcomes. This points to the fact that any production plan which does not take adequate account of the constraints imposed by the state of existing production (and distribution) technology cannot be implemented. But pushing back these technological constraints should be a primary concern of the planning strategy.

Putting the plan into operation yields new insights into reality to which the original plan has to be continuously adjusted. Experiences has shown that adjustments of plan targets and strategy in light of data yielded by the implementation process is needed on a quarterly bases. These adjustments may be recommended by the planning commission for approval by the supreme council. Policy correction may be needed for achieving original targets rather than modifying them.

Plan implementation thus requires a developed system for observation and control. Plan implementation is moving policy to reality by successive approximations. For successful plan implementation lower units of planning (those established at district, tribal production and service site levels) are extremely important. They are the eyes and ears of the central planning authority. Planning units should exist in all major agricultural districts, large scale manufacturing and service enterprise tribal communities and urban bazars.

As national planning offices at local/enterprise level initially secure estimates of planned output investment, labor supply and average wages for a given time period through planning bodies established at the central, provincial and district levels. The original estimates are developed by the central planning commission but they are modified at each stage of the planning institutional machinery. The lowest planning unit (at the local, tribal, enterprise, bazar level) makes final adjustments to these estimates in light of local circumstances. These modified figures are sent up the planning institutional chain to the central planning authority where they are finally consolidated in the form of the national plan submitted for approval to the supreme council.

The implementation process also requires the establishment of the following institutions:

Commission for supplies to collect all surplus grain (i.e. grain that is over and above the consumption needs of districts) and its distribution through a process of rationing (see below) or price control. The supply commission may also collect a portion of the output of industrial enterprises for distribution to agriculture with branches spread in all agricultural districts and areas.
Nationalized tamveeli institutions (see below) for the functioning of the saving and investment process(daulatafzai).
State monopoly commission for a) large scale manufacturing enterprises b) mining c) power and water d) foreign trade
State price commission along with branches in all major districts and bazars
Trusts for monitoring and supervising the operations of medium sized industries.

Details of these institution have been given in the papers prepared by WGAE (see list of publications in appendix).

VI. Financial Planning

We conceive of the planning process as an attempt to balance a growing volume of physical resources. The financial plan expressed in money and prices is an adjunct of the real (i.e. physical) plan.

The financial plan consists of (a) the cash plan (b) the credit plan and (c) the budget. Financial planning is necessary because some unit of account (i.e. money) is needed to equate overall physical balances. If planning is conceived of as a process of mobilizing physical recourses the availability of financial resources (money) is not a precondition for the mobilization of physical resources Creating a material product requires other material resources – land, labor, machinery etc. (not money). The real cost of resources is also physical (e.g. how many acres of land, how many men with what specialization, how many units of electricity, how many machines and of what type are required to produce 100,000 tons of grain in a year).

Only in capitalist societies does finance (in the form of money and credit) become a binding constraint on production. This is because in capitalist societies money (not physical resources) is the main form of value. In capitalist societies the production of grains/tractors is not an end in itself. It is only a means for accumulation of capital (takathur). That is why in capitalist society finance (money and credit) dominate production. In Islamic order, the primary function of money is to facilitate exchange of real goods and services. In an Islamic economy finance (Tamweel) follows the mobilization of physical resources and not vice versa.

The financial plan thus transforms the basic costing data of production into money terms. The planned cost of a given output is the physical costof its inputs as expressed in money prices. From the system of planned prices of output emerge a cash plan and a credit plan for the national economy.

The final price of a unit of output includes (a) its cost price (b) a planned rate of profit (c) a planned rate of tax (d) distribution/marketing costs. This is the retail price of a unit of output. Thus:

R_p = c_p + P + T + ds………………..1

Where r_p= retail price, c_p = cost price, P = rate of profit, T = tax levied, ds = distribution service costs. Note that all the variables are subject to planning. In current circumstances the state must dominate the economy. We recognize that it is not optimal Islamic policy. In an ideal Islamic order (and in most of Islamic history, e.g. the period of the Umayya and Mughal empires) the Islamic state did not dominate production and exchange structures.

But the Imarat-e-Islamia is an exceptional Islamic state – an Islamic state established when capitalism is globally dominant and a large proportion of the afghan population have been influenced by capitalist ethics – they do not regard ma’ash as a means for the attainment of falahin ma’ad. Permitting free markets to flourish in such an environment opens the way for the growth of selfishness, hirs and hasad. Therefore for a long period the virtues of tawakul, sabar, ghina and faqrikhtiari have to be propagated throughout society so that the majority of the Afghan people are raised to the moral level of the Taliban and the mukhliseen-e-deen.

During this transition period the free market will be allowed to gradually emerge in tandem with the moral transformation of the masses. Immediately the system of price controls will be practiced as follows:

The state will define a list of luxury goods, the domestic production and import will be restricted and black markets will be subjected to severe punishment (e.g. alcoholics, electronicgames and toys, cosmetics etc.)

Goods and services subject to state administered prices (grain, fertilizer, arms and ammunition, mining, energy products, heavy machinery, IT products, sugar)

Goods and services subject to price monitoring and control (cloths, shoes, meat, radio sets, school fees)

Goods and services freely exchangeable (no price control) e.g. handicrafts, stationery items, barber services etc.

We recommend that a large proportion of total production and services be subject to state price administration and control. At the end of the planning period (2024) this list may be revised with a view of increasing category (d) and (c) and reducing (b) or moving items from category (b) to (c) in light of the state’s assessment of the extent to which Islamic moral transformation at the mass level has occurred. While the rate of profit (p) and the rate of taxation is subject to state discretion, cost of production is less, so cost of production may be lower (due to more efficient use of physical resources) or higher than planned cost. This should lead to financial plan adjustment. Profits are to be divided between (a) retained earnings by the enterprise (b) reserves of the enterprise (c) infaq fund (for distribution among workers). Taxation should also come out of profits. While the rate of profit is planned actual profits may vary in accordance with varIATIon of actual to planned cost. The lower the actual cost relative to planned cost, the higher the profitis.

Financial planning needs to be extended to the level of the production and service unit. For those which are subject to state monopoly both the output and the sale price are fixed by the financial plan – such production and service units are thus integrated into the national financial plan. For units subject to administered prices and those subject to price controls (within stipulated price ranges) price and output targets may be set but their integration into the financial plan is partial. The “free market” units are essentially outside the financial and the production plan.

Each unit (both those within and outside the financial plan) finances its day to day operation from its reserves but state credit is available for daulatafzai (investment) and meeting unanticipated resources shortfalls due to draughts, snowfall, machinery breakdown etc). Daulatafzai (investment) is also financed from retained profits of the unit and (perhaps) from its reserves. For state monopoly enterprises use of reserves and retained profits for daulatafzai (investment) should be subject to approval of the planning commission or the supreme council.

Pricing is a multifaceted issue in a transitional Islamic economy which can be conceived as follows:

The government sets the prices of most of the production and service output of the Islamic transitional economy.
The objective of the pricing process are:
1. To promote akhlaq-e-hasna (zuhd, sabr, tawakul, ghina,infaq) in society.
2. To promote daulatafzai (investment) in state monopoly sectors (anti-aircraft technology, surveillance technology, grain, minerals) and the IT sector.
To discourage the growth of razayl (itraf, hasd, zulm)

To achieve these objectives the pricing system must ensure the maximization of daulatafzai (investment) in the state monopolized industries the maximization of self-employment in the regulated and “free” sectors and a moderation of wage and consumption throughout the economy. This will require a gap to emerge between the wage expenditure of production and service units and their total earnings. Wage growth will have to be moderated in all manufacturing and service units to facilitate daulatafzai (investment). The price of consumer goods (other than those in which the state has a trading monopoly such as grain, small arms etc.) have to be adjusted through taxation to facilitate the flow of real resources towards daulatafzai in the priority sectors or this can also be achieved by by direct taxation of consumer expenditure or by encouragement of daulatafzai through the purchase of assets (especially of state monopoly units through musharika and madarba contracts.

Prices can rise with a rise in costs (both planned and unplanned) and a fall in the circulation of money (both currency and credit).Costs can also rise due to a shortage of raw materials and energy, acceleration,of wear and tear of machinery (deprecIATIon) and increase in wages. Prices for the plan period (2022-24) can be fixed with reference to a base period (say either 2019 or an average of 2018, 2019 and 2020) with an adjustment for current import prices (especially of fuel and machinery). The state has limited control over the components of physical costs but can take a number of measures (through taxation and rationing) to discourage hoarding by production units. Hoarding – a kabirah sin in Islam – is a prime means for creating supply shortages and fueling inflation. Control of wholesale trade of major consumables – grain, sugar, meat and selected vegetables – ought to be a crucial element of the state’s pricing policy, especially important is control of the wholesale grain trade. This facilitates paying of state wages in grain. Speculation in grain trade should be punishable by Shariah law.

VII. The Monetary System

We have written extensively on this (see last of papers in Appendix).

We have advocated the issuance of a baseless currency – the Islamic Dinar (ID) – not linked to gold, silver, any other commodity or foreign exchange reserves. This is of vital importance for the development of a self-reliant, self-sustaining non-capitalist economy which gradually delinks itself from the interest and speculation focused global imperialist financial economy.

The quantity of money to be produced by the state (Da Afghan Central Tamveeli Institute which should be a subordinate branch of the Ministry of Finance) should be determined by the estimated money value of gross domestic production (GDP) for 2022 at an adjusted price index of the 2018-2020 period. Money supply growth should aim at full employment (including self-employment) output level. During 2022-2024 money supply growth should respond to growth in real resources at the continuously adjusted price level (real GDP). If this is done fairly accurately there is little danger of money supply growth fueling inflationary pressure in the economy. Demand for currency predominately depends upon the monetary value (at planned and free market prices) of consumer goods required at particular levels of labor (employed and self-employed) earnings, adjusted for estimates of the circulation of currency.

In estimating money demand account must also be taken of the deprecIATIon (wear and tear) of non-human assets (land, machinery). In an Islamic economy the real cost of “capital” is only the deprecIATIon (wear and tear) of the real non-human assets. The surplus the use of physical non-human assetsyields (its contribution to net physical output of goods and services) does not reflect its direct cost (its rate of wear and tear).

Estimation of money-demand must also take account of the net inflow of foreign money (NFA) which we have recommended be converted into Islamic Dinar. In 2022-24 NFA is likely be a very minor component of aggregate money supply (given limited foreign trade and no foreign investment).

Thus aggregate money supply corresponding to money demand will be:

………….(2)

Where MS = money supply

DCC = demand for currency by consumer

RCM = rate of circulation of money

DcD = demand to meet deprecIATIon costs

NFA = net foreign assets

Change in any of the variables on the right hand side of equation(2) will require change in the supply of money by the state (which will be the only source of money supply). Supply of money will increase in tandem with increase in real income (at estimated planned and free bazar prices), deprecIATIon costs and net inflows of foreign money. It will decline with a rise in money circulation.

The state will operate an adjustable foreign exchange rate system which may be negotiated with major trading partners (Iran, Turkey, Pakistan, and Uzbekistan) through foreign trading arrangements and currency swap arrangements. Adjustment of foreign exchange rate will reflect imports needs of the economy. Frequent devaluation will be avoided.

As noted above the monetary system will incorporate a currency plan and a credit flow for the period 2022-24. The currency plan will estimate the currency needs and rate of currency circulation at a districtlevels. Estimated amounts of currency will be supplied through the CentralTamveeli Institute to all employers (for payment of wages) and to all trading centers (for the payment of purchases of agricultural output) free of cost in accordance with the estimated currency needs of all businesses.(see blow)

The credit plan estimates the day to day operational needs and the asset construction credit needs of all major districts (agricultural) and businesses. The credit plan establishes production and service delivery targets for each district/business to which credit is issued and repayments are synchronized with the achievement of these targets. IATI branches routinely monitor the production and service delivery performance of each district/business(see below) . The credit plan is an articulation of the production plan of the national economy. A periodic revision of the national production plan (necessitated by the plan implementation process leads to a corresponding periodic revision of the credit plan. Only IATI(see below) and the branches will be the source of credit. Credit extension from one state enterprise to another will be prohibited. However Qard-e-hasna can be provided by the state by all public and private organizations, businesses, consumer financing (excluding home financing) will be discouraged. IATI may extend credit to farmers and SME sector cooperatives and trusts. Interest basedcommercial paper will be eliminated (due to riba and gharar prohibition). There will be no money stock or bond market in the Islamic emirate.

VIII. The Tamveeli System

Money exists not by nature but by law – money is what the state desires it to be. Money is a state artifact to circulate wealth.Control is reflected in the state’s ability to issue and withdraw money from circulation and to determine who controls it. If the money is linked to gold or foreign exchange reserves, the amount of gold and foreign exchange will control the money supply and its social allocation. If money is defined as debit as is currently done in all capitalist and socialist societies then its supply and distribution will be controlled by bankers. Money creation is therefore necessarily a political prerogative – a prerogative of the Islamic state. We should do everything we can to prevent losing this power to the Jewish bankers and their allies who dominate the international financial system.

State control of money supply requires abolishing what is known as the fractional reserve system in which banks are enabled to create a multiple quantum of credit on the bases of a slender reserve base. In the Tamveeli system 100 percent of bank deposits would be protected by reserves while IATI branches(see below) will enter into musharka and modarbadaulatafzai (investment) contracts with business and farming communities. The daulatafzai contracts will be subject to the priorities of the national production and credit plan. Legally created government money (the only sort of money that will exist in the Islamic state) can be regarded as equity in social wealth.

The Tamveeli system is much less prone to inflation than the debt based financial system in which debt money is created by banks on the basis of their (speculative) profit expectation. All speculation is eliminated in an Islamic Tamveeli system and money supply reflects projection in real sector (GDP and employment including self-employment) growth.

The transition to theTamveeli system requires that immediately (at the beginning of the transition period) all existing bank loans outstanding will be regarded as government issued money. As they are paid bank they are returned to the central Tamveeli Institute and converted into Islamic Dinar or credit again issued by CAI.(see below)

Electronic money creation is not a viable option for the Islamic government because the main agent for the transformation of individuality is the state (in present circumstances) and relinquishing control over the supply of money is surrendering it to the masses – many of whom are not (yet) inspired by Islamic values (zuhd, tawakul, faqrikhtiari). Moreover, electronic money is fully integrated into the global capitalist financial system – delinking from which is a primary objective of a self-sustainable interest and speculation free Islamic national economy.

A primary aim of the Tamveeli system is to reduce dependence on dollars which dominate the global imperialist financial system. As far as the poor countries are concerned it is the IMF which is the principal agent for subjecting them to dollar imperialism – by continuously supplying interest based dollar loans to finance current account deficits. Withdrawing from IMF membership is thus an essential pre-requisite for the development of a self-reliant national Islamic economy.

The Islamic state should attempt to control the supply of money, its purchasing power and the (average) wage level. While the control of the money supply should be complete – no other agency should be permitted to create money – the control over the general price and wage level is necessarily partial due to changes in environmental conditions (weather calamities, sabotage activities etc.) and due to the existence of a growing free economy. Money supply growth should therefore follow changes in aggregate price and wage level. The Central TamveeliInsititute(CTI) must therefore target employment growth. Money supply growth must seek to promote full employment, potential output achievement – not inflation targeting over 2022-24 period. Eliminating accommodative lending by financial institutions should be relied upon to reduce inflationary pressure.

We are arguing that the Islamic state must act as employer of last resort. To control inflationary pressure the average wage level growth in the manufacturing and service sectors must be moderated. During 2022-24 this need not be a major problem since the share of these sectors in aggregate employment is relatively low and in the agricultural and informal sectors unit income growth keeps pace with productivity growth. Wage growth can be moderated by moralization – propagation of the Islamic virtues of qana’t and tawakul and da’wah activities within the trade union movement.

IX. Financial Institutional Mechanisms

There will be twotamveeli institutions in the Islamic Imarat; the Central Tamveeli Institute (CTI) and the AwamiIslamiTamveeliIdara (IATI). The CTI will be a branch of the federal ministry of finance reporting through it to the Supreme Economic Council of Ministers. IATI will have offices throughout the country at the provincial, district and local levels (with headquarters at Kabul).

CTI will be responsible for the issuance of all money in the Imarat. CTI is mandated to provide money supply at the level which is required for the achievement of potential full employment at a given level of income. This implies that money supply growth should be ensure that growth in the general price index is equal to or lower than growth in aggregate physical output. The higher the rate of growth of physical output, the lower the impact of a given money supply growth rate at the general price level. The optimal rate of growth of money supply is that rate which maximizes the rate of growth of physical output and employment. The monetary policy of CTI must attempt to identify and maintain this money supply growth rate.

This optimum output/employment growth must be politically determined taking realistic account of economic circumstances – it cannot be known in advance. We believe – without adequate knowledge of the macro economy – that an annual average growth rate of 10 percent is realistic for the 2022-2024 period for the Afghan economy.

Inflation can occur only if the rate of growth of money supply significantly exceeds the rate of growth of physical output and expectations are not adequately managed through the mass promotion of the Islamic virtues (zuhd, tawakul and infaq). Thus a realistic assessment of physical circumstances and of the moral condition of the mases are essential pre-requisite for the articulation of effective Islamic monetary policy and CTI must be institutionally equipped to make such assessments either directly or in collaboration with other state institutions.

CTI may issue or retire money supply which it may on lend to branches of IATI spread throughout the country in accordance with the estimation of the consumption and daulatafzai (investment) needs of each locality. Profit earned and losses incurred on the deposits through IATI branches will/may be shared with CTI. CTI may create a tavmveeliinstument – the central deposit certificate which may be sold to the public and its proceeds can be added to CTI resources. Profits earned through daulatafzai(investment) of central deposit certificates can be distributed to the public. The rate of return on central deposit certificates will correspond to average rate of profit of all government daulatafzai (investment) projects.

Money supply growth will be effected by the net inflow of foreign moneys (NFA). As we have noted all moneys obtained from foreign sources will be converted into Islamic dinars. The effect of positive NFA inflows will be neutralized by the CTI through the sale/purchase of central depository certificates. If NFA inflow is negative CTI will inject Islamic Dinars into the economy to compensate for the net outflow. CTI deposits and central deposit certificates will be de-nominated in Islamic dinars only.

The AwamiTamveeliIslamiIdara (IATI) will take over all the branches of the domestic and foreign commercial banks and other financial private sectors institutions in Afghanistan. Its branch network will expand rapidly since it will be the primary source for the distribution of the Islamic Dinars issued by the CTI throughout the country. The present (2022) stock of Afghanis and foreign currencies circulating in the economy will be gradually converted into Islamic Dinars during a twelve month period. This conversion will take place through the branch network of IATIand fresh issues of the new currency will be channeled through it.

IATI will take two types of Amanat (deposits) from the people and from businesses and state institutions. Amanat-e-Mahfuz (current account deposits) will not be on lent and Amanat-e-Daulat (investment account deposits).Of course no interest charges will be made on either type of accounts but the real administrative costs (wages, rent, utilities, technology use etc.) will be calculated. A profit margin will be added to it and charged as fees to amant account holders (qard-e-hasna loans will be exempted from these charges).

The major proportion of IATI profits will accrue from its use of daulatamanats. These amanats will be extended for use by businesses (including state owned businesses) with the consent of the amanat account holders on the basis of musharka and modarba (profit and loss sharing) contracts. IATI will thus hold equity (on behalf of DaulatAmanat account holders) in the businesses to which daulat account funds have been lent. IATI branches will participate in the monitoring and management of business financed through DaulatAmanat funds and PLS funds may also be extended to cover day to day expenditure (working capital requirements). IATI can also purchase physical assets (buildings, ships, planes, machinery) and lease them to the private and government owned businesses. Other IATI services may include:

Credit-purchase lending

IATI can purchase assets/commodities on cash and sell them on credit to users. Return on such contracts will be determined by profit/loss of borrowers on use of these assets.

Holding company arrangements

IATI can establish subsidiaries in various sectors with part equity ownership in assocIATIon with public and private businesses. This is specially important in the mining, energy and construction sectors during 2022-24.

Letters of Credit

IATI can issue letters of credit (LCs) which are not interest bearing. This can be based on a fee system representing the administrative and real cost of financing of such operation.

Corresponding relationship

No corresponding relationship should be established with any foreign Islamic bank or any interest bearing bank. Correspondence relationships should not be established with any financial institution that has links to the global money or capital markets. Immediate attempts may be made to establish correspondence relationship with Bank Milli Iran and its member banks. This should be seen as a first stepin the establishment of a full-fledged currency union with the Islamic Republic of Iran.

Qard-e-Hasna

IATI can provide qard-e-hasna for students, patients and fuqara (those derveshes who are full time occupied in ibadat). Qard-e-hasna can also be extended to Dawah activities.

The Bait-ul-Maal (the state treasury) has an important role to play in the management of the Tamveeli system. Its function is collective and allocative. It collectives government revenue (at the federal, provincial, district and local levels) in the form of income and business taxes, indirect taxes, zakat, usher, sadqat, atyat etc. It manages state monopolies in trade (both domestic and foreign) in assocIATIon with other ministries and monopoly commission and ensures the efficient functioning of product and service markets. It is responsible for a major proportion of financing of public goods – health, education, transport and communication etc.

During most months of the 2022-24 period some form of rationing especially of grain and a small number of essential consumables will probably be necessary (sugar, cooking oil, some vegetables, soap). As noted above a federal Department of Supplies should be established with branches at the provincial, district and local level. This department will stock the items obtained from the agricultural and manufacturing sector through mandatory requisitioning (at fixed prices and taxation) in the form of commodities – for example a proportion of grain will be collected as part of Usher revenues). A very successful rationing exercise of this form was organized in the Soviet Union during 1918-1925when roughly half of the aggregate output of the agricultural and manufacturing sectors was requisitioned for rationing. Ration prices can vary,thus lowest prices should be charged for the mustadafeen. Ration prices should be lower than both administered (monopoly) prices and free market prices. Rationed stocks can be allocated to major businesses for payment as part of wages. This proportion of aggregate agricultural and manufacturing output consumed by rationing should be reduced by 2024 as production increases. We anticipate that real output will be 21 percent higher in 2024 in comparison to 2021, grain production will probably be significantly higher.

Part of the profit of all businesses in the agricultural, manufacturing and service sectors will be absorbed in taxation. Retail prices are based on real (resources) costs of production plan planed profits plus taxes. In the transitional Islamic economy it is the prerogative of the Islamic government to structure the price system. Thus the rate of taxation should be lower on the production of armaments, locally produced technology,(specially IT products ) & eventual commodities (grain) winter clothing, health and education products and services). It should be highest on luxuries and imports. The tax rate should be a component of the planned (retail) price of goods/services.

While credit retaining by IATI may be practiced during 2022-24 the rate of return on extended credit should be strictly determined on profit/loss share basis in the project. However a higher rate of taxation can be incorporated in the profit share of non-priority projects. Higher rates of tax should be applied to projects requiring a large proportion of imports and joint venture projects and projects involving the production of luxury goods. Lower rates of profit taxation should be applied to projects producing essential goods and services (armaments, grain, construction, health and education projects)

IX Financial Investments

As noted earlier there will be no money, stock or bond market in the Islamic Imarat. This will be a first step towards abolishing the capitalist property form whose purpose of conducting transactions is the accumulation of capital (not wealth) and the performance of management is evaluated on the bases of its efficiency in accelerating the accumulation of capital (abstract value). The purpose of the functioning of the Tavmeeli system is the promotion of the Islamic virtues (zuhd, sabr, tawakul, infaq), through the managed production of real wealth (physical goods and services).

We assume that the Afghan masses are not able or willing to organize their ma’ash as a means for achieving falah in ma’ad. We base this assumption on the fact that mukhliseen-e-deen (those who selflessly supported the Taliban and other mujahideen groups during the Occupation period) amounted to no more than 3,00,000 people out of a total population of 33,000,000. Thus during an extended transitional period – lasting will beyond 2024 – the Islamic government (federal, provincial, district and local) has to play a crucial directional and mentoring role in running the Afghan economy. This is necessary to bring the masses up to the moral and spiritual level of the mujahideen and the mukhliseen-e-deen so that their economic behavior reflects their desire to achieve falah in ma’ad. As the masses progress morally and spiritually the role of the government (federal, provincial, district and community level) may gradually be reduced.

The principal tamveeli instrument will be the daulat fixed term certification issued by CTI having shorter maturity and IATI will also issue daulat certificates of longer maturities. Trading in certificates by individuals and businesses will be prohibited by law to eliminate speculation. Rates of return on CTIcertificates will be determined by aggregate average rate of return on government investment. CTI certificates will not be issued for financing government non investment expenditures which will be financed by taxation and issuance of Islamic Dinar. Rate of return on IATI certificates will be determined by actual profit earned on the specific project at date of maturation of the IATI certificate.

IATI certificates and CTI certificates will be priced at face value at time of issue but if re-issued will be re-valued at time of maturity.

IATIcertificate will be fixed term modarba and musharka certificates revalued at maturities. IATI may also issue “mutual fund” type certificates consolidating several (or all) doulatafzai schemes with rates of return linked to average profits and loss of the entire IATIdoulatafzai portfolio. Holders of musharka and modarba certificates except those of “mutual fund” type certificates will be regarded as owners of the businesses in which their funds have been invested. It will be the responsibility of the Da’wahMajlis to encourage and facilitate business monitoring and management participation of mudarba and musharka certificate holders in the affairs of their financed business.

CTI will issue its short termCertificates to IATI branches and distribute them in accordance with the profitability, liquidity risk and promotion of Islamic consciousness of all DaulatAfzai projects of IATI. Alternatively the entire stock can be allocated to IATI which will be responsible for its branch distribution in accordance with the above criteria. No secondary market will be allowed to emerge to avoid speculation (gharar).

Liquidity needs of businesses and localities would principally be met by issuance and injection of currency through the currency plan. Business and households will be required to finance their day to day operations (working capital) through their own retained funds, and saving.

Foreign investment by Afghan citizens and businesses will be strictly prohibited. All foreign exchange earnings and remittances will be surrendered to CTI which will convert them into Islamic Dinar at government determined exchange rates and (taking account of its impact on money supply growth). Foreign exchange resources will be distributed to government and private importers on the basis of national needs as specified in the production plan.

The Demand of Money

The rate of return on short term certificates issued by CTI will be a major determinant of the demand for money in the transitional Islamic economy. When the rate on short term CTI certificates rises the demand for money by businesses and households will fall and the demand for investor instruments will rise within the limits prescribed by the credit plan and the currency plan. There will be no opportunity for speculative transaction – no secondary market – in the economy. This money demand will reflect only precautionary and (real) transaction needs.

The rate of return on short term CTI certificates will anchor all expected acceptable investment rates of return –As the short term rate rises expected rates of return on all investment instruments must rise within the limits provided by the credit plan.

The rate of money (both currency and credit) supply expansion is thus dependent upon (a) the rate of return on short term CTI certificates (b) the level of real income (c) the targeted (or expected) inflation rate. It should be noted that the higher the rate of growth of real output the lower the expected rate of inflation. An increase in the rate of CTI issued short term certificates (and hence upward shift in all investment return) reflects growth in physical output. Both CTI and IATI (at the branch level) need to closely monitor the performance of the real economy.

It must be stressed that the focus of money supply production should be both on growth of the total volume of production as well as on its efficient and equitable regional and local distribution in accordance with the daulatafzai strategy outlined in the production plan. Unbalanced (regional and sectoral) investment growth can seriously dis-balance and injure the Islamic economy.

Finally and perhaps most importantly achieving a targeted rate of inflation requires an adroit management and structuring of public expectations. Hence the Da’wahmajlis has a vitally important role to play. The more it succeeds in the mass propagation of the Islamic virtues of zuhd, qana’at, sabr and infaq, the easierit will be to manage money demand, for Islamically motivated masses will be able and willing to sacrifice worldly gains (in the form of higher desired levels of consumption) for the achievement of rapidly constructing a self-reliant national jihadi economy, a goal to which they are morally and spiritually committed.

Economic policy success depends principally and crucially on the success of the Da’wahmajlis to transform the moral and spiritual condition of the Afghan masses.

Summary

The state in the Economy
1. The state consists of all the institutions which govern society.
2. Establishing a powerful system of governance at all levels of society (federal, provincial, district, local) is essential at this stage of the revolution.
3. Establishing a powerful governance system is essential to defeat counter-revolutionary sabotage.
Objectives of Planning
1. Planning is a means for establishing and operating a system of governance at all levels of society.
2. The objectives of the planning process should be:
  1. To transfer governance authority at all levels of society (federal, provincial, district, community) to the active supporters of the revolution (the mukhliseen-e-deen).
  2. To uproot capitalist values from individuals and communities at all levels of society and to inculcate in individuals and communities the desire to regard economic and political activities (ma’ash) as a means for achieving falah in ma’ad.

To establish a self-reliant, self-sustaining national jihadi economy which gradually delinks from the global capitalist economy.

The planning process
1. Planning is a process of a) estimating existing physical resources (land, labor, machinery) b) specifying production targets over a time period (2022-24) and c) identifying a socioeconomic strategy to achieve these production targets.
2. A statistical office to collect data at all production levels is urgently required.
3. Plan targets should be periodically set and revised by a supreme council consisting of major ministers.
4. Subordinate to the supreme council sh89i ould be a planning commission. The planning commission should have offices at the federal, provincial, district, community levels and in major agriculture areas industrial and service enterprises.
5. Initially the planning commission may draw up plans for a small group of strategically selected sectors (food, electricity, security).
6. The planning process must be focused on achieving coordinated production progress in all major sectors and regions.
7. The planning process can be structured as follows:
  1. The central planning office of the planning commission at the federal level establishes estimates of production, investment, material and labor and average wages for each major region and (agricultural, service and manufacturing) business.
  2. The estimates are submitted for revision through provincial, district, local planning machinery to major agricultural, manufacturing and service production businesses.

The lowest planning level (the business) finally modifies these estimates in light of its existing circumstances.

The modified estimates are submitted to the federal planning central office which consolidates them in the form of a national production plan.
Production targets should only be set for major agricultural regions and nationalized (manufacturing and service) sector businesses. All others should be under state supervision and price production and wage limits should be set for them. A small (but growing) number of free markets in consumables should be allowed to function outside the planning system. A cooperative movement should be encouraged.
Medium sized businesses in specific sectors may be organized in trusts which can serve as plan implementation tools monitoring performance for ensuring observance of production and price directives of the production plan.

The establishment of a Dawahmajlis in each major agricultural community and manufacturing and service business reporting through it provincial and district network to the ministry of AmrbilMaruf and nahi an-al Munkar is of vital importance.
The functions of the Dawahmajlis will be as follows:
1. Propagation of religious values in all employers and employees and arrangementof their religious and spiritual training.
2. Delegitimize tendencies of itrafand khiyanat to refute counter revolutionary propagenda and attempts at sabotage of work processes through the establishment of a community/business based surveillance system.

To liaise between the general public and the Islamic government and to explain government policies.

To participate in the administration of the health programs of the community/business and be the principal source for the distribution of health products.
To participate in trade union activities.
To approve the appointment of the chief executive officer in the business.
Planning Techniques
1. Before detailed statistical information is available individual ministries may be asked to provide production plans for reaching a politically specified growth target (say 10% GDP growth for 2022). This growth target may be revised by the supreme council in the light of their comments.
2. Ministries both federal and provincial may be asked to indicate the amount of physical resources they need to achieve realistic growth rate targets for their sectors/areas. The planning commission then estimates aggregate resource availability and distributes resources to the sectors/areas in such proportions as is required to achieve the (realistically determined) average aggregate growth rate.
3. As detailed statistics become available the government may make projections of expected resource increases and identify investment allocation in the light of these projections.
4. We recommend that projections not be fixed on historical data – i.e. data for 2002-2020 as the purpose of planning by the Islamic government is to change the (production and consumption) structure of the economy. Projections should be made on the experience of the 2022-2024 period and should be the basis for the development of a medium term plan for example for 2024-2029.
5. Planning should be conceived of as a physical not a financial exercise. During the 2022-24 period priority should be given to the construction of a national economy wide input-out matrix describing the production and resource utilization structure of the Afghan economy. This input-output tables should undergird the medium term plan (2024-29).
6. As the economy grows the input-output structure of the sectors change reflecting the economic strategy of the Islamic government. Thus at the beginning of the medium term planning period (i.e. 2024) a projected/forecasted input output table should be drawn up for 2029. Showing the policy desired changes in national production/consumption of structure at the end of the medium term planning period (i.e. 2029). Achieving the desired changes in the existing production/utilization structure should be a major objective of the plan.
7. Forecasting should not depend entirely on statistical data. Constant interaction and advice from on-sitepersonal (engineers, foremen, industrial and service sector laborers, farmersbusiness managers) is of crucial importance in developing realistic forecasts. This requires that the planning process be extended to the basic production and consumption level through de-centralization.
8. Reliance on foreign experts should be avoided as a) they have a capitalistic mindset b) are not likely to be in touch with ground realities and c) are likely to be agents of imperialism.
9. The national input-output matrix may be de-composed within major sectors to identify cost in terms of physical (not financial) resources at project level and ascertaining the pattern of balancing of resource use at the intra-sectorial level. Project prioritization is facilitated in this way.
10. During 2022-24 the statistical base may not exist for identifying such intra-sectoral balances throughout the economy. Nevertheless an attempt should be made to identify project balancing/linkages in a) defense production b) IT sector, d) selected grain producing regions e) mining.
11. Moving from the existing to the desired input-output structure requires the implementation of a politically determined economic strategy by elements of which must be:
  1. Exhancing mass Islamic consciousness
  2. Rapid growth of daulatafzai (investment) in defense production, IT sector, mining, agricultural support (not ownership) and heavy machinery.

Drastic reduction of luxury goods consumption (both imports and domestic production)

Delinking from the global capitalist system by nationalization of existing foreign investments, de-dollarization of the economy, promotion of joint ventures and withdrawal from international financial institutions – IMF, WB, ADB, IDB and from WTO and WIPO.
Plan Implementation
1. The supreme council should set plan targets and articulate planning strategy and monitor plan implementation.
2. The planning commission should be responsible for the day to day implementation of the plan and for advising the supreme council on the viability of its proposed plan strategy and production and daulatafzai targets.
3. The planning commission should have a statistical office responsible for the continuous collection of data and its analysis.
4. Both the planning commission and the statistical office should have branches spread throughout the country at the provincial, district and community levels and within major manufacturing and service businesses.
5. The Dawahmajlis reporting to the supreme council (as the ministry of AmrbilMaruf) will be responsible for promoting and monitoring of the growth of Islamic consciousness among employers, employees and self-employed for liaising between workers, farmers, employers and the Islamic government and for the organization of health and education services at the production unit level. It will have branches at the provincial, district, community and major business unit levels.
6. The implementation process consists of fishing out actual data at the production sites and testing it with desired outcomes. Putting the plan into operation yields new insight into reality to which the plan targets and strategy has to be constantly adjusted. Such adjustments may take place on a quarterly bases.
7. The implementation system also requires the establishment of a supply commission responsible for the collection, distribution, rationing and price control of state supply of grain and selected manufactured goods. The supply commission will have offices at federal, provincial, district and local levels. It will report through the ministry of agricultural and provincial governments to the supreme council.
8. State monopoly commission will be established for a) large scale manufacturing sectors b) mining c) power and water c) foreign trade. They will report through their respective ministries to the supreme council.
9. A price commission (for items other than grain and those rationed) with branches within all major districts and reporting directly to the supreme council.
10. Private trusts for SMEs.
11. CTI and AIT (see below).
Financial Planning
1. Planning is process of balancing a growing volume of real resources and their allocation. Financial planning expressed in money terms is or adjunct of the physical plan.
2. If planning is conceived of as a physical balancing process the availability of financial resourcesare not a precondition for mobilizing physical resources. Production of physical output requires physical resource inputs (not money). Only in capitalist society does money become a binding constraint on production.
3. The financial plan transforms the costing of physical production into (planned) money prices. From the system of planned prices of a desired level of output emerges a cash plan and a credit plan for the earning.
4. The retail price of a product includes a) the actual cost of its physical inputs b) a planned rate of profit c) a planned rate of tax and d) unit distribution costs.
5. Most prices in the transitional economy will be subject to plan – a free market will be allowed to emerge in tandem with the growth of the Islamic virtues of zuhd, tawakul and ghina at the mass level.
6. The price system will be structured as follows:
  1. Luxury products (alcoholics, electronic games, cosmetics) both domestically produced and imported will be restricted and severe punishment will be meted out to black marketers.
  2. State administered prices will be charged for prioritized sectors (armaments, grain, fertilizers, energy products, IT products, health products etc.)

Goods and services subject to price monitoring and control (clothes, shoes, radio sets, school fees etc.)

Goods and services subject to no price control e.g. handicrafts, barber services etc. This list may be revised in terms of the Dawahmajlis’ assessment of the extent to which Islamic moral transformation has taken place in society.

Actual cost of production may be lower (due to efficient use of resources) or higher (due to wastage) than planned cost. This should lead to a revision of the financial plan. Actual profits which consist of a) retained earnings by the owner b) business re-investments c) infaq expenditure d) taxation may also deviate from the planned rate of profit.
State owned units are fully integrated into the financial plan because the money level of their output is fixed by it. The integration of other units into the financial plan is incomplete. Units not subject to price control are fully outside the financial and production plan.
Each unit meets its day to day needs (working capital) through its own resources. The credit plan mainly provides for daulatafzai expenditure and for emergencies. Daulatafzai expenditure is also financed from business related earnings.
Price policy should be based on the following objectives:
1. To promote akhlaq-e-hasna in society
2. To facilitate daulatafzai especially in priority sector (e.g. anti-aircraft and surveillance technology, grain, IT and health services).

To discourage consumption and the quest for higher standards of living.

To maximize self-employment
Moderation of real wage growth
Prices for the period 2022-24 can be fixed with reference to a base period (2019 or an average of 2018, 2019 and 2020) with an adjustment for current import prices especially of fuel and machinery.

Control of wholesale trade of major consumables – grain, some vegetables, sugar should be a major element in price policy. This requires strict control over hoarding which is a kabira sin in Islam.
Speculation and hoarding should be punishable in accordance with Islamic law.

Over the plan period 2022-24 planned prices of priority sector goods and services should be gradually raised to facilitate daulatafzai in the economy.

The monetary system
1. We advocate the gradual issuance with in a period of 12 months of a new currency – the IsamicDenar – not linked to gold or foreign currency reserves. This is necessary for the creation of a non-capitalist, self-reliant monetary system which gradually delinks itself from the global speculation focused capitalist financial order.
2. Islamic Dinar should be issued by the central Tamveeli institute (the present State Bank) which should be a subordinate branch of the ministry of finance.
3. The quantity of money produced should be estimated by the money values of GDP for a year (say 2022) at an adjusted price index (described above say for 2018-20). Money supply growth would seek to achieve full employment output level.
4. Currency demand mainly depends on the money value of consumables (estimated at planned and free market prices) required at particular level of labor (both employed and self-employed) earnings, adjusted for estimated circulation of currency.
5. In estimating aggregate money account must be taken of the exhaustion and tear of physical assets (land, machinery). In an Islamic economy the cost of “capital” is merely its real deprecIATIon i.e. wear and tear. Estimation of aggregate money demand must also take account of the inflow of net-foreign moneys (NFA) which we have recommended be mainly converted into Islamic Dinars (with a portion being required for allocation to importers).
6. The government will operate on adjustable exchange rate system. Exchange rates may be negotiated with Iran, Turkey and Pakistan as parts of FTAs. NegotIATIon for establishing a currency union with Iran should be initiated. Currency swap arrangements with Irani banks may also be sought.
7. The currency plan will estimate currency needs and the rate of circulation of currency at district level. Estimated amounts of currency will be supplied through the branch network of a newly established AwamiIslamiTamveeli Institute (IATI) at district level to all employers and households (see below).
8. The credit plan will assess the day to day operational needs and the asset construction and maintenance needs of all agricultural and urban businesses. Production and service delivery targets can be specified in the production plan or independently for private business. Credit repayment is synchronized with the achievement of these targets. The credit plan is an articulation of the national production plan at the district level.
9. IATI will be the sole credit source. Credit from other state enterprises will be prohibited. Qard-e-Hasna can be extended by the government, IATI and all other institutions.
10. There will no stock or bond market in the country to abolish speculation.
The Tamveeli Institutions
1. The Central Tamveeli Institute (CTI) must target employment growth. Money supply growth must seek to achieve full employment potential output. The state should act as employer of last resort but to offset inflationary pressure average money growth rate should be moderated. Money creation is a political act.
2. Surrendering the power to create money to domestic bankers or to the Jewish dominated international financial system is surrendering political power to our enemies.
3. The CTI is mandated to identify the monetary growth rate which maximizes the full employment output growth rate consistent with planned price stability.
4. Control of money supply by CTI requires the abolishing of the fractional reserve system.
5. At the beginning of the transition period all bank issued loans will be regarded as government issued money (all interest accounts will be cancelled). As they are paid back they are converted into Islamic dinar by the CTI and/or issued as credit (non-interest) loans through the branches of IATI – the AwamiIslamiTamveeli Institute.
6. CTI must work in close collaboration with the Da’wahmajlis to manage expectations. By promoting values such as tawakul, zuhd, sabr and ghina at the mass level the Da’wah Council will play a crucial role in moderating inflationary pressure with inthe economy.
7. IATI branches spread throughout the country receive currency stocks from CTI for distribution in accordance with estimated money supply needs of all districts.
8. IATI also has daulatafzai accounts which itcan fully lend on the basis of musharka and modarba contracts to farmers and businesses. Profits and losses subsequently incurred may be shared between IATI, lenders and depositors.
9. IATI branches will participate in monitoring and management of businesses financed through daulatafzaicontracts.
10. CTI may also create a financing instrument – the Central Deposit Certificate (CDC) which can be sold to the public and receipts added to daulatafzai deposits at IATI. Rate of return financed by use of CDC can be shared between CTI, IATI and holder of CDC – this rate of return will correspond to the average profit/loss of all CDC financial projects.
11. The effect of NFA will be neutralized by the CTI through the sale/purchase of CDCs. And varIATIons in the stock of Islamic dinars CTI deposits and CDCs will be demonetized in Islamic dinar only.
12. IATI will take over all branches of existing domestic and foreign banks. It’sbranch network will expand rapidly over all districts. We recommend a twelve month period for converting all Afghan and foreign currencies circulating in the economy into Islamic Dinars (issued by CTI).
13. IATI will take two types of deposits from the public a) Amanat-e-Mahfuz (current account) backed by 100 percent reserves b) Amanat-e-Daulat for on lending on a profit/loss sharing basis. No interest will be charged but administrative costs will be deducted from profits.
14. IATI can also participate in leasing and credit –purchase contracts. It can issue letters of credit and build sector specific holding companies on a fee paying basis – the fee being based on administrative and real costs of extending such services.
15. Correspondence relationship will not be established with banks which have connections with the international financial system. Negotiationsmay be immediately started to establish correspondence relationship with Bank Milli Iran and its member banks – a first step in the establishment of a full-fledged currency union with the Islamic Republic of Iran.
16. IATI can extend qard-e-hasna to the mustadafeen, students, patients and for da’wah expansion purposes.
17. CTI and IATI certificates will be issued for long and short maturities. The rate of return will be determined by profit/loss rate of businesses financed through them. Maturities will be fixed. Initially they will be issued at face value but they can be re-issued and revalued subsequently.
18. IATI may also issue ‘mutual fund’ type certificates with rate of return linked to average profit of financed sectors or of the entire IATIdaulatafzai portfolio.
19. All holders of musharika and modarba contracts will be considered owners of the so financed enterprises. It will be the responsibility of the local Da’wahmajlisto encourage participation in monitoring and management of these asset holders in their financial businesses.
20. No secondary market in CTI and IATI certificates or in any other credit contract instrument will be permitted to eliminate gharar (speculation).
21. No foreign investment by Afghan individuals or businesses will be permitted.
22. All foreign exchange earnings will be surrendered to the government which will either convert them into Islamic dinars or allocate them to importers in accordance with national needs as specified in the production plan.
23. The Bait-al-Maal plays a part in monetary management. Its functions is both collective and allocative of revenue. Sources of public revenue are income and business taxes (both direct and indirect), Zakat, Usher and jaziya etc. It manages state monopolies and trades (in assocIATIon with other ministries). It is a major source of financing public works (health, education, defense etc.)
24. Part of the profit of all businesses will be absorbed in taxation. Retail prices will be based on real actual costs of production plus distribution costs plus retained profits plus taxation. Rate of taxation should be lowest on grain, locally produced technology, IT products, armaments etc. It should be highest on non-essential consumer goods and imports. Higher rates of taxation should be levied on the profits of import intensive projects, joint ventures and non-essential consumer businesses.
Conclusion

Afghanistan is potentially a rich economy –rich both in manpower (we defeated both the USSR and America through protracted struggles), skills and material (mineral, agricultural, energy) resources. This rich economy has been devastated by imperialist loot and plunder since the late 1970s. Imperialists now seek to subordinate the Afghan economy to the global capitalist system so that this loot and plunder can continue.

The development of a national planning system through which the state dominates the national economy (in the transitional period) is essential to defeat imperialism. The Islamic revolution in Afghanistan must aspire to be the first nail in the coffin of the crisis ridden, decaying global capitalist order.

Through the planning system, with Allah’s help, we seek to develop a transitional Islamic economy which fosters Islamic individuality (through the promotion of zuhd, sabr, tawakul and infaq), promote national self-reliance (through rapid growth in the production of material goods and services, not finance) and gradually delink from the global capitalist economy.

Achieving these aims requires articulation of a production plan and a financial plans which organizes production and exchange from the base of the society to its apex.Planning so conceived is a process authorizing and empowering millions of the mukhliseen-e-deento participate in the process of plan conception and implementation.

Such a planning system requires the urgent establishment and efficient operation of the following planning organs:

The Supreme Council of Ministries (responsible for plan strategy)
The Planning Commission (reporting to the Supreme Council with branches at provincial, district, community and major business levels)
The Da’wahmajlis (reporting to the Supreme Council with branches at the provincial, local and business levels) responsible for influencing the economic behavior and expectations of the masses and other management functionaries.
Supply Commission (reporting to the planning commission, responsible for distribution of grain and selected manufacturing units with branches at provincial and district and communities levels.
Price Commission (reporting through the planning commission to the Supreme Council, responsible for maintaining price stability; with branches at provincial and district levels and in all major bazars)
Central Tamveeli Institute (a part of the Ministry of Finance) responsible for the provision of money supply and the formulation of monetary policy.
Awami Islamic TamveeliInstitute : reporting to CTI, responsible for distribution of currency and credit; with branches spread throughout the country.
State Monopoly Commission: reporting to relevant ministries of foreign trade and mining and state owned manufacturing sectors
Trade Unions: reporting to the Ministry of Labor

Ya Allah! You have granted us victory over the Kuffar in the battlefield. We beseech You as Your humble slaves to bestow upon us Istiqamat so that by Your grace and mercy they are defeated on the economic front as well. Yours is the Kingdom, the Power and the Glory forever and ever. Ameen.

Note: Planning Commission, Dawa Council, Price Commission, Supply Commission and AIT all have branches at provincial, district and major business levels.