Kabul, Afghanistan ? Afghanistan remains one of the world’s least-developed countries, the United Nations said Monday, warning that the nation that harbored al-Qaida terrorists until 2001 could fail again unless more is done to lift it from poverty.

In a new report examining Afghans’ security, welfare and ability to control their own lives, the world body ranked the country 173rd out of 178 surveyed, with only five states in sub-Saharan Africa faring worse.

While landmark October elections showed Afghanistan’s political progress, the report urged President Hamid Karzai and his international backers to redouble their efforts to tackle miserable health and education standards, as well as growing inequality which could fuel fresh conflict.

“Sustained peace in Afghanistan is not guaranteed despite the early successes in state-building,” it said. “The price the international community would pay to protect itself from Afghanistan would be far greater than what it will pay to help develop the country.”

The 288-page report by the United Nations Development Program paints a mixed picture of the country’s re-emergence since U.S. forces drove out the former ruling Taliban for harboring Osama bin Laden in late 2001.

On the plus side, Afghanistan’s economy is booming, growing at least 25 percent annually since then and expected to expand by at least 10 percent a year in the next decade. Some 4 million children have enrolled in school.

However, it still has the worst education system in the world, according to the U.N. calculations, which points out that nearly three-quarters of all adult Afghans are illiterate and few girls go to school at all in many provinces.

Moreover, most of the country’s income is being mopped up by warlords with strong political and military connections, creating a dangerous gap between rich and poor and between the cities and the countryside. Half of all Afghans are poor, it said.

The report was also critical of the U.S.-led military engagement in Afghanistan, saying it helped produce a climate of “fear, intimidation, terror and lawlessness” and neglected the longer-term threat to security posed by inequality and injustice.

It also described reconstruction projects sponsored by the U.S. military as “inadequate.”

Glass blower Sayedullah makes a glass at his workshop, where he recycles glass from empty bottles to make up to 100 glasses in a day in Kabul, Afghanistan. Three years after the fall of the Taliban, Afghanistan remains the world's sixth-least developed country, the United Nations said Monday.