Editor in Chief: Moh. Reza Huwaida Thursday, January 18th, 2018

Investment is Dropping in Afghanistan

As the concerns regarding the security are rising, the concerns regarding other walks of life are also multiplying in Afghanistan. One of the major of them is the economy. Afghanistan would be faced with great challenges of stabilizing its economy and striving to stand on its own in the post-withdrawal era. As international support would diminish and the investors do not seem very much interested in Afghanistan because of uncertain conditions, the future for Afghan economic system does not seem a smooth sail. It is important to see how much the responsible authorities in the country would be ready to face all these challenges.
Highlighting the same concern Afghanistan Chamber of Commerce and Industries (ACCI) disclosed on Friday, February 12, that foreign investment in the country sharply dropped to its lowest level since the start of new solar year, which is a warning of an economic recession if the government does not take firm steps to tackle the decline.
According to ACCI, a surge in violence across the country and government’s failure for providing fresh incentives to foreign investors have also affected domestic investments. Khan Alokozai, the deputy head of ACCI, said in a statement, “There has not been any foreign investment in the country this year, no one is prepared to invest amid the fragile security situation, even our domestic investors are faced with numerous problems right now and they are not willing to continue.”
Meanwhile, Afghanistan Investment Supporting Agency (AISA) has said that investments dropped by 26 percent this year.
The ACCI and AISA have warned that if the government does not come up with strategic economic reforms to boost the economy and attract foreign investments, the country may collapse into a financial recession.
The situation seems really threatening and if the country is not able to attract investors, it would be very difficult to construct an infra-structure that would be helpful for the future of Afghanistan’s economic system. Aid and support would be helpful but they can only be of any advantage when Afghanistan’s economy is able to stand on its own. Therefore, it is vital that the authorities should make efforts to pave the way for better economic opportunities for both the national and international investors.
The doubts and uncertainties of the Afghan market have made the international investors think thousand times before they take an initiative to start their businesses in the country. Though there are great opportunities in Afghanistan and the country is blessed with different types of mineral and other natural resources, the economic infra-structure has not been able to get enough attention.
Apart from that there are other factors as well that have been influencing the economic system of Afghanistan. Among them the rising corruption is the most dominant one. It is important that the menace of corruption must be tackled with iron fists to enhance economic opportunities. Additionally, the insufficient and unfavorable business environment is also one of the issues affecting Afghan economy. There have to be strong business laws governing the society and controlling the business. The laws should not only safeguard the rights of investors and businessmen but also make sure that the competition within the system is maintained on strong and fair footings. The evils like monopoly based on unfair competition must be tackled properly and there should be strong bodies that control the prices within the markets, which at the present are non-existent and the businessmen are fixing the rates on their own. This has given rise to a political system that, on the exterior, is called as democratic but in reality is an ad-hoc arrangement that has no strong foundation.
Afghan economy, therefore, requires structured development towards a capitalist society. And in this regard, businesses can play a vital role. If within a system there are consistent investments and different businesses, the system is on a track towards development and prosperity. Since the very inception of human society, human beings have required businesses so as to have their requirements fulfilled. Throughout human history, businesses have taken different forms and characteristics and today have reached to a very advanced form. From the barter system to today’s advanced era when the businesses are taking place online, there has been a series of different practices, but the vitality of the business has never been lost.
Having developed its economic infrastructure based on capitalism or free market economy marked with stability, Afghanistan can hope to tackle some of the major social problems as well. It can then be in a position to tackle the major problems like poverty and unemployment that are basically giving rise to many other social problems. Moreover, the political stability is also largely dependent on the economic stability. If the country is able to have a stable economic system, it would on a track towards a truly democratic society. In addition to that, the economic stability would, in the long run, support Afghanistan to fight terrorism and restore peace and tranquility in the country.