Fears of an economic collapse in the wake of the pullout of foreign troops may be exaggerated. The resurgence of the economy has been aided by rising income from mining, agricultural exports and investments, a Killid investigation reveals.
Fears of an economic collapse in the wake of the pullout of foreign troops may be exaggerated. The resurgence of the economy has been aided by rising income from mining, agricultural exports and investments, a Killid investigation reveals.
More than a third of the country’s earnings are from exports. Mizaman Popal, the director of Export Promotion Department says there has been an increased production of Afghanistan’s famous handmade carpet business, and exports of fresh and dry fruits, grains, medicinal plants, and both precious and semi-precious stones.
In 2012 the total value of exports was 139 million dollars. In the following year it increased by 61 million USD. “There was a 90 percent increase in vegetable exports, and 80 percent in grain exports in 2013,” says Popal.
The good news is the revival of the carpet industry, and it is reflected in the figure for exports from the Afghan Chamber of Commerce & Industries (ACCI). Within the first six months of last year the industry had earned 20 million USD, which was as much as it had earned in the previous year. By year-end Afghanistan had exported 654,000 sq metres of different kinds of carpets, valued at 64 million dollars. In 2012, the total volume of exports was 196,000 sq metres.
International recognition
In 2007 Afghanistan’s hand-made carpets were its biggest export, with sales amounting to around 261 million dollars. But lack of infrastructure and access to international markets sent many of the jobs in the industry to Pakistan with carpet manufacturers taking their unfinished carpets across the border to cut and wash. Industry officials say the famous Afghan carpet was selling with made in Pakistan labels.
Now optimism is riding high on the Afghan carpet, which for the second year running won the prestigious Oscar Award of the Carpet Industry at Domotex Hannover, 2014. Tanweer FBMI, which was the largest Afghan carpet company in the four-day international trade fair that ended on Jan 14, won the prize for two of the six rugs it entered in the competition. The company is a partnership between Tanweer and FBMI, a humanitarian initiative for women led by Sheikha Fatima bin Mohammad of the United Arab Emirates. Tens of thousands of Afghan women have the skills to weave carpets, but they were denied the opportunities.
At a press conference in Kabul on Jan 18 Mohammad Qurban Haqjo, head of ACCI, said one million people were employed in carpet making. The government should establish a fund for providing long-term loans to carpet manufacturers and also build industrial parks. “Private sector should produce all stages of carpet manufacturing inside Afghanistan and avoid producing part of it in Pakistan,” he urged.
Tanweer FBMI, which according to its website began with an investment of 33 million dollars in July 2010, has two large centres of production and processing handmade carpets in Kabul and Nangarhar provinces. There are smaller operations in nine other provinces.
ACCI officials point to a slowdown in exports to Pakistan, which they blame on the uneasy relations between the two countries, and corruption. The government has not been able to stop the illegal smuggling of timber, which runs into millions of dollars, says Haqjo. “Vast tracts of forests have been cut, and taken across the border,” he told Killid.
There is also a roughly 2 billion dollars illegal trade in narcotics, he adds.
Khan Jan Alokozai, deputy director of ACCI, believes trade relations have been affected by insecurity. In 2012, Afghanistan had signed trade deals worth 2.5 billion dollars but it decreased to 500 million last year, he says. “We could see a further decrease this year,” he adds.
The Ministry of Commerce and Industries was dismissive of the fears. Wahidullah Ghazi Khail, a spokesperson in the ministry, says, “This is not an issue to worry about.” He urged industry associations to focus on projects that guarantee employment to strengthen the economy.
Mining wealth
The Ministry of Mines and Petroleum has predicted revenue from mining will increase to 4 billion dollars by 2015. This would be a significant addition to the government’s income, which was about 2 billion dollars in 2011. The nation’s mineral wealth, which includes deposits of copper, iron, and gold and also reserves of oil and gas, could generate serious revenue for the government.
Rafi Sediqi, a spokesperson for the Ministry of Mines, says, “We hope extraction from mines would become more organised. It could help provide stability in the country.”
There is encouraging progress. Income from mining has increased by 30 percent in Badakhshan. “Our income was 25 million Afs (437,000 USD) in 2012, and it has risen to 31 million Afs (541,700 USD) last year,” says Engineer Atiqullah, the head of Cadastre of Badakhshan.
Meanwhile, Engineer Abdul Khaliq, the head of mines department in Baghlan also confirms an increase in revenue from mining in the province.
The Afghanistan Investment Support Agency (AISA) estimates some 3,000 small and big investors invested more than 8 million dollars, creating jobs for about 800,000 people. Most of the investment is in the service industry, Wafiullah Eftekhari, the head of AISA confirms. At least 100 new investors have promised more business this year, he adds.
