Investing in the future of Afghanistan

There are 100 major investors in Afghanistan presently with about 100 million USD dollars investments, and despite the cloud of uncertainty in the wake of proposed foreign withdrawal, the mood of local and foreign investors is upbeat

After years of war and despondency, Afghanistan is blazing past a highway to become a vibrant nation with growing industrial and financial clout. All the prime stakeholders, including the government of Afghanistan and many non-governmental institutions, are striving hard to ensure the economic growth is inclusive and rapid, which creates a sea of excellence, prosperity and possibilities in place of mediocrity, deprivation and discontent. It may not be hailed as the great success story of globalization, one of the main protagonists of new economy and international policy, but Afghanistan is on course to outstrip many developed nations in the future.

Considering that huge chucks of investments are made by the Afghan companies, it would be safe to suggest that Afghans have an important role to play in the future economic development of Afghanistan 



A large number of foreign companies have expressed their desire and commitment to invest in Afghanistan and many of them have procured licenses for same. According to the information provided by AISA (Afghanistan Investment Support Agency), about 3,000 small and medium, local and international companies have invested 518,864,320 million USD and work opportunities have been provided to 809,950 individuals.  

However, as the time of proposed withdrawal of foreign forces from Afghanistan inches closer, there are reports suggesting that some of the investors are also finding ways to leave the country. Despite these rumours flying thick and fast, about 5407 new companies have asked for activity licenses from the Afghan government and invested 639,470,724 million USD in different fields.
Of the total number of companies who have invested in the country so far, 4703 are local and 270 are foreign. The total investment made by the local and international companies in 2012 was staggering 639,470,724 million USD, and a big portion of it, 57,755,363 million USD was invested by the local companies and the rest 61,917,661 million USD was pumped in by foreign investors.
Considering that huge chucks of investments are made by the Afghan companies, it would be safe to suggest that Afghans have an important role to play in the future economic development of Afghanistan.

As per the information provided by AISA, foreign investments saw a 26 percent increase in 2012 compared to 2011. 

Wafiullah Iftikhar, Director of AISA, says there have been investments to the tune of 9 billion USD since the last ten years, mostly in service fields. “Most of these investments were in service field like construction, communication, air and logistic companies and banks,” says Mr. Iftikhar.

According to AISA, since the past 11 years, a total of about 8518,864,320 billion USD have been invested in the country, of which 6371,751,968 billion USD are locally invested and 2147,112,352 billion USD are invested by foreigners.

Though AISA stops short of naming the companies for security reasons, but as per our privy sources, most of the investments have been made on communications, beverages and printing houses.
 “I can say that we have more investors in banking and industry, beverages and printing, air and insurance, mines and fuel but I cannot mention their names,” he says, citing security concerns.  
There is no mechanism to check the rate of killings and kidnappings of investors, but Herat province is mostly prone to it, where the residents accuse Iran, the neighboring country for such incidents.
Analysts believe the increase in local production weakens the process of importing Irani products and it might be the reason that Iran creates problems for investors in Herat province to discourage them from investing there.

Presently, Afghan made Biscuits and various types of beverages are produced in Herat province, which is considered a barrier for imports of Irani products. Today, there are more opportunities for investment in Afghanistan and it does not go down well with many neighbors.

According to AISA, most of the investments have been made in communication sector. gDurin  the International Communication Day Celebration on May 15 this year, authorities from Ministry of Communication said that about 1.800 billion USD investments have been made in Afghanistan so far. Almost 88 percent of Afghan areas have been covered under communication systems and work opportunities have been made available to nearly 150,000 people by various communication companies.

There are five communication companies now in Afghanistan, and two of them, Afghan Telecom and Afghan wireless, are Afghan companies.
A number of Afghan entrepreneurs have invested in other countries; they need to come back and invest in their own country, which would greatly help Afghan economy and create job opportunities for working class here


Remarkable investments have been made in transport and transit sectors too. Currently, there are a total of seven local and international air companies, four of them local and three owned by foreign companies. Local air companies include Ariana Afghan, Safi, Ofuq sharq and Kam Air. Except Ofuq Sharq, which operated only locally, the six other companies have both local and international operations.

Mr. Iftikhar says there are about 100 major investors in Afghanistan presently with about 100 million USD dollars investments. In order to boost the economic sector, increase long-term work opportunities and give fillip to the gross domestic product (GDP); investments are necessary in industrial sector.

“Regretfully, only 4 percent investment has been made in the agriculture sector, which is considered the key sector and main source of livelihood for 80 percent Afghans,” he laments.
Currently, most of the important products are imported from other countries and despite the situation improving and opportunities opening up; many Afghans prefer to work in other countries.
Today, Afghans import raw material from other countries while these materials were originally made by them. For example, Afghans work in any factories of Iran and Pakistan and whatever they make is exporting to their home-country.

In addition, a number of Afghan entrepreneurs have invested in other countries. They need to come back and invest in their own country, which would greatly help Afghan economy and create job opportunities for working class here. According to reports released by AISA, Afghanistan currently imports 95 percent of its products from other countries.

There are fears and apprehensions about investors bidding adieu to Afghanistan after the withdrawal of foreign forces towards the end of 2014. But, the top government officials downplay the fears as ‘baseless’. Mohammad Qurban Haqjo, Official in Ministry of Commerce and Industries, says bilateral treaties and mutual agreements on various issues between Afghanistan and other countries are likely to encourage more investors into the country.

 

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