Editor in Chief: Moh. Reza Huwaida Tuesday, October 23rd, 2018

Government has Failed to Attract FDI

In the last three decades, due to fast advancement in technology, traditional practices in all fields have changed or changing fast. Business, trade, finance and investment have all gone electronic. Unfortunately, Afghanistan falls among the countries that have benefited the least from the opportunities of the last thirty years and has disappointingly failed to attract foreign direct investment (FDI) which considered pivotal for economic growth of a country. These are all due to foreign invasion, civil war, Taliban-ism and terrorism.

Afghanistan has a number of plus points as compared to many countries in the region and beyond - its strategic geographical location and vast deposits of mineral resources, for example. Therefore, Afghanistan should have been among the countries where investment is at its peak.

The three-decade long conflicts have kept investors away from Afghanistan. This factor is majorly responsible for the concerning and vulnerable economic condition we have today. Afghanistan should have an attractive market for investors but due to lowest security level here, investment has gone decreasing over the last years – specially the foreign direct investments.

It is not only investment and economy; insecurity has negatively impacted all fields of life. If the condition persist as is, it is far difficult for Afghanistan to have a stable economy – for which attracting investment has a vital role.

Apart from security, the government of Afghanistan too has not been able to take any measure towards attracting foreign investor. Investment in Afghanistan is limited to only a few telecommunication companies and some other businesses like airlines and hotels. Where there is more risk, there is either more profit or more loss. Same is the case with Afghanistan.

Companies that have dared to invest here despite serious risks and threats are earning good profit. Although laws for investment are still quite vague at some points, the government has tried somehow to facilitate investors. In this regard the first and the only significant step was the establishment Afghanistan Investment Support Agency (AISA) back in September, 2003 for facilitating investors under one window operation.

There are tens of thousands of functioning national and foreign companies registered with AISA but almost all are domestic firms with majority investing insignificantly. But for the underdeveloped and foreign-dependent economy of Afghanistan, investment is considered lifeblood.