An Overview Of The Afghan Economy
By Ghanizada - Mon Mar 03 2014, 3:24 pm
As troops drawn down in Afghanistan and foreign aid money dries up, there are fears this will have a huge knock on effect for the Afghan economy. However, one economist believes that’s just not so. American Rod Monger says people should not be predicting doom and gloom.
Dr Rod Monger, Professor of Business, American University of Afghanistan, said, “That’s absolutely false. I don’t know why people have that attitude but you know the smart money now understands, and I’m talking about the smart global money, now understands that Afghanistan is probably the biggest investment opportunity in the world. A lot of the investment options in South East Asia are now mature, certainly Europe is mature, even the Gulf Arab region is mature now but in Afghanistan there are business opportunities here, I don’t want to exaggerate, are beyond belief.”
The investment opportunities Professor Monger is referring to include an estimated three trillion dollars of minerals, a figure based on aerial surveys by the American Geological Survey. He believes oil and gas industries will be developed, there’ll be a major growth in the mining and financials sectors and the infrastructure of the country.
Nasim Akhbar, CEO of Harakat Investment Climate Facility, said, “In the last decade, the biggest sector that attracted investment was the construction sector, perhaps over three billion dollars. Two billion was in the telecom sector.”
For hundreds of years Afghanistan was the epicentre of the region’s trade routes. The Soviet war came in the late seventies, civil war broke out and the country was torn apart.
The civil war sucked the life out of the Afghan economy. Both the import and export of goods became almost impossible because no international relationships could be forged. Many of Afghanistan’s wealthy business owners left the country and those that stayed were more preoccupied with survival than trade.
Najibullah, Chairman of Afghan Foreign Exchange Market, said, “During the Taliban regime no one was interested in doing business. The Taliban also had no contact with the rest of the world so it was a terrible time for business in this country.”
The economy has turned around now. Mohammad Shekib Rashedi recently opened Afghanistan’s first frozen yoghurt shop, called Cherry Berry. While his business caters predominantly to a younger, more affluent crowd, it demonstrates a growing trend of enterprising young Afghans taking steps to start their own business ventures.
Mohammad Shekib Rashedi, Owner of Cherry berry, said, “ We had a logistic company and we were totally dependable on the projects. But while we didn’t have any project so we were just sitting and doing nothing. Therefore we thought to start a business which will be in relationship with the people of Afghanistan.”
In 2012, The World Bank predicted a sharp slowing of growth for the Afghan economy, which it then attributed to the withdrawal of foreign forces and the reduction in donor money.
The vague sense of uncertainty about the future is one of the issues affecting business in Afghanistan, the other is corruption. But Rod Monger thinks that corruption issues will be addressed.
Dr Rod Monger, Professor of Business, American University of Afghanistan, said, “What you will see I think is that as the donor money becomes less of a factor in the economy and as the capacity of the country builds up, Afghanistan will deal with its corruption problem. I still think the largest barrier to the development of the economy here is the development of human capacity, education, and that’s why there needs to be resources poured into that end.”