The economy is showing signs of recovery after months of paralysis. Factories have reopened and trade has picked up amidst hopes of an end to crisis.
The economy is showing signs of recovery after months of paralysis. Factories have reopened and trade has picked up amidst hopes of an end to crisis.
The Ministry of Finance spokesperson Abdul Qadir Jailani believes there are two reasons that halted the economic slide: installation of the national unity government and its signing a bilateral strategic agreement with the US.
While it may take two years to recoup the losses estimated to be roughly 21 billion Afs (365 million USD), he was optimistic the government would not default on paying staff salaries.
“Our target for the 3rd quarter was 11 billion Afs (191 million USD) but we could merely collect 3 billion Afs (52 million USD) due to the disputed presidential election. But now the situation is normal,” says Jailani.
There is similar optimism in the ministries of economy and commerce. Musafer Quqandi, spokesperson for the Ministry of Commerce says both domestic and foreign traders have increased investments in the country. New investors are queuing up for licences. “The economy is growing again … Every week many traders and investors are asking for work licences,” says Quqandi.
Economist Saifudin Saihoon thinks the economic signs are positive. But he wants the new government to also act on rampant corruption in government offices, and compel the “powerful” to pay taxes. Not only has the government been lax about collecting tax from businessmen, however influential, but government losses from leaky customs and corrupt revenue offices are high. Moreover, the practice of awarding contracts for small mines to “powerful people in government offices” must stop, says Saihoon.
Support industry
Tens of factories had shut over the last few years because of the government’s failure to support ailing industries, a crisis that was exacerbated by the inconclusive presidential election in April. For nearly six months the Karzai government was on hold waiting for a successor. Everyone from home-based workers to women in business and agriculture felt the pinch. Tens of factories shut down in Herat, according to the provincial industrialists union. Sweeta Durani, a manager at the Women’s Trade Centre in Herat, said in July that 80 percent of businesses run by women were at a standstill.
Now there are signs of revival. Hamidullah Khadem, head of the Herat Industrialists Union, said close to one hundred factories have restarted. He wants the government to keep its promise to strengthen industry by cleaning up corruption in dry ports. “If strong rules are implemented in each port, industry in Herat would definitely grow,” he is optimistic.
Herat acting Governor Asladin Jami is also hopeful about industry in the province. According to him, investors had even pulled out their capital but now some 100 factories have restarted and hiring workers.
However, Mohammad Jafar Kazemi, an official in the Trade Union of Herat, feels the government has to create conditions to provide jobs for the unemployed. “The people need work,” he says. “Our good wishes are with the government’s forming a cabinet. We want a new cabinet that will have good ideas to strengthen the economy.”
The Afghanistan Investment Support Agency (AISA) thinks cheap imports and low tariffs are a barrier for investors, and the government has to resolve the problem.
At an event to mark the start of the construction for the second stage of the Juma Mohammad Mohammadi Industrial Parks project in Bagrami district, Kabul province, on Nov 4, Sher Baz Kaminzada, chairman of the Afghan Industrialists Union urged the government to support industrialisation in the country. Afghan business did not take advantage of the opportunities of the past decade. Millions of dollars came and went out of the country but “unfortunately we (investors) were not able to become self-sustained in production”, he said.
The first Juma Mohammad park in Bagram is already completed. It extends over 45 acres of land, and houses 35 factories that are already operational.
In the pipeline
Wafiaullah Eftekhar, the head of AISA, unveiled plans for a much bigger industrial part in the Gosfand Dara area of Bagrami district.
Khan Jan Alokozai, the deputy director of the Afghanistan Chamber of Commerce & Industries urged Afghan investors to prove their mettle and strengthen the economy and the hands of the national unity government.
“I would like to urge all Afghan traders to bring their capital to Afghanistan,” he says. He also has a message for the government. “Until there is food on the tablecloth of Afghanistan security would never come to the country.”
President Ashraf Ghani who was sworn-in on Sep 29 hit the ground running. He has promised to safeguard the interests of investors, and “take legal action against those who create problems” for them. In his week he said he would strive for peace in the country, and the welfare of all Afghans.
Abdul Rahman Dard, a lecturer in the economics faculty of Nangarhar University, is hopeful of change during the government’s five-year term. “The (current) economic crisis is a fact,” he states. “The best governments are those that have a strategy at the beginning of their term, and work to reaching their goals, one step at a time,” he advises.
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