Editor in Chief: Moh. Reza Huwaida Thursday, April 26th, 2018

The Decline in Investment

Economic stability is considered to be very important for the development of a country. It is believed that political and social stability depend on the economic prosperity. Without economic well-being it is very difficult to find a country with political might and social integrity. And, for strong economy, investment is the key. However, investment itself requires certain pre-requisites to flourish. Among them stability and security are the most vital ones. If these factors within a country are stable and reliable, the ground is said to be totally ready for the investors and businessmen to grow their businesses. All that the businessmen want is consistent outcome from their investments and, mostly, they dislike inconsistent and unreliable socio-political circumstances.
The evil such as insecurity also plays a decisive role in disheartening businesses and investments. Different occurrences of terrorism and killings force the businesses to go out of business, and thus discourage the investors to invest. The societies victimized by insecurity do not have consumers going to the markets and enjoying the extravagance of shopping different products.
Afghanistan is also among the type of countries where insecurity and ambiguity have been influencing the economic life to a great extent. Both national and international businessmen are not eagerly prepared to invest in all the sectors and they do not see positive scenarios of their businesses. As insecurity and uncertainty have been devastatingly influencing the country, the development in the basic infra-structure has been scanty. 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 minerals and other natural resources, the economic infra-structure has not been able to get enough attention.
Afghanistan Investment Support Agency (AISA), in a recent report shows that investments have dropped considerably in Afghanistan since the establishment of the National Unity Government (NUG) in 2014. AISA officials recently revealed that there has been a 26 percent fall in registration of new companies for investment during this period. Figures by AISA show that at least $1 billion USD was invested in the country over the past two years while according to the organization, this amount was over $2.2 billion USD during the same period under the previous government.
AISA information also shows that investment in Afghanistan's mining industry has experienced a 77 percent decrease, construction sector has witnessed 57 percent fall while energy and water sector has seen a 54 percent reduction over the past two years under the NUG.
AISA's investment support director Masihullah Fakhri said that a lack of political and economic stability as well as insecurity have affected investments in Afghanistan.
It is also important to note that there has not been a dedicated and serious effort by NUG to improve the situation. It has mostly been dominated by its inner conflicts and, therefore, could not dedicate enough attention to the economic issues and therefore, we have this situation facing us today.
Apart from that there are other factors as well that have been influencing the economic system of Afghanistan. The insufficient and unfavorable business laws are 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 with 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.

Afghanistan needs to have strong economy so as to survive in the post withdrawal era. The international aid and assistance that have been coming to the country for the last some years will be diminished and Afghan economy will be tested to a large extent. The country has to start from the basic infra-structure development and have to reach to a stable economy, wherein the businesses are able to function without any fear and inconsistency. An environment has to be developed that can be galvanizing for both the national and international investors. Moreover, the golden opportunities wherein Afghanistan can exert maximum and can get the best outcomes from must be discovered and they should be strengthened so as to push the country towards self-sufficiency. On the other hand, the businessmen and investors must also keep the national interests in their consideration while they establish their businesses and start getting the outcomes from them. They have to keep this in their minds that the society as a whole has certain rights that have to be fulfilled by them.