ban economy dependent on a state that in turn drew most of its income from links to the international state system and market. Agriculture and pastoralism accounted for about 60 percent of GDP, and about 85 percent of the population depended on the rural economy for its livelihood. As late as 1972, economists estimated that the cash economy constituted slightly less than half of the total. This figure probably increased later in the 1970s, as a result of the expansion of the national market after completion of the nation-wide ring road and a rise in remittances from labor migration to Persian Gulf countries after the 1973 oil price rise (Rubin, 1995a, 62-75; Fry, 1974, 135-62). Government expenditure consumed less than 10 percent of the whole economy, less than 20 percent even of the cash economy. Government domestic revenue was even less than that. In the 1960s foreign aid accounted for 40 percent or more of the budget, including virtually all development projects. This aid came from both the Soviet- and US-led alliance systems, though the former predominated, especially in the military. As aid declined in the late 1960s, export of natural gas from northern Afghanistan to the Soviet Union (principally Uzbekistan) replaced it, so that these rentier incomes continued to finance slightly less than half the budget. Most of the rest came from taxes on a few items of foreign trade and government monopolies of commodities such as fuel and tobacco (Rubin, 1995a, 296-7). Urban society depended on the redistributive activities of the state. Since after the mid-1950s the private sector was largely confined to trade, the state controlled most urban employment, which expanded together with the foreign funded state. The state controlled almost the entire educational system (secular and Islamic), which expanded rapidly since the 1950s. The exception was the private, rural madrasas (Islamic academies) that steadily lost influence and prestige. The Isl...
