Factories in Balkh, Herat, Kabul, Kandahar, Nangarhar and other provinces that have not already shut are on the verge of closing. Some 8,000 people have lost their jobs.
AISA or the Afghanistan Investment Support Agency issued some 6,000 factory permits over the past 14 years.
Factories in Balkh, Herat, Kabul, Kandahar, Nangarhar and other provinces that have not already shut are on the verge of closing. Some 8,000 people have lost their jobs.
AISA or the Afghanistan Investment Support Agency issued some 6,000 factory permits over the past 14 years. The Chamber of Commerce & Industries and union of industrialists say the slowdown in investments and the government of national unity’s failure to revive the economy have led to the collapse of manufacturing. The union of industrialists says the government has failed to figure out a proper strategy for the revival of industry. The authorities have made many promises but no action has been taken.
Abdul Rahim Faizan, the deputy director of the industrialists’ union says that many factories are shut in industrial parks. Though eight new factories for processed food and medicines recently opened in the Herat Park, they have not been able to figure a market because of erratic power supply and the flooding of the Afghan market with cheap and low quality imported medicines.
According to Faizan, the situation in Juma Mohammad Mohammadi industrial park located in Bagrami, Kabul, is also not “good”. Two factories in the park closed, and 32 others are facing closure. “If attention is not paid they will fail,” he warns. “The government does not play a supportive role,” he says.
The situation in Jalalabad is slightly better. Some eight of the 160 big and small factories there have shut. These were either manufacturing engine oil or in the marble business. The former could not find a market and the latter could not find raw material. Moreover, Tormalang, the head of the industrialists union in Nangarhar points to the serious electricity shortage as their “main problem”. According to him, while the province has been allocated 25 MW, it receives barely 12 MW. “The central electricity department has not been delivering our share, and also since the lines from the Naghloo hydropower project were cut by armed opponents of the government, the factories have been starved of power,” Tormalang says.
Many factories have closed due to lack of electricity, high taxes and a shrinking market because of cheap imports. Some 250 factories were working last year. The number is now down to 125.
In Kandahar, Faizulhaq Moshkanai, deputy at the Kandahar industrial park says their problems are mostly chronic power shortages and high taxes on local goods. People are unwilling to buy goods made in Afghanistan when there are cheaper imports.
There has to be restrictions on cheap imports if the situation in Kandahar is to change. Some 4,000 jobs are on the line if factories keep shutting.
Factories in Balkh province also are in trouble. A factory owner, Nasrtullah, says there are more than one hundred factories in the province. Seventy are shut now including his. The factory used to produce yarn for carpets.
“We invested some one million dollars in the factory but the factory was forced to close. Unless the government helps, factory owners have no choice but to close,” he said.
Shoe manufacturers face similar problems. Asef Jami says the industry employs some 2,500 people in 525 factories. The union of shoe producers has the capacity to manufacture 7.5 million pairs annually. But it has been working at a lower 3.5 million pairs for the past few years. “Many factories are closed because of financial or other kinds of distress. The government has been importing 330,000 pairs of shoes for the military,” he said. In 1992, there were some 3,000 small but very active shoe factories in the country.
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