The Government has announced 10-years tax exemption and land subsidies for businesses that invest over $1 million in Afghanistan during 2013. The Ministry of Finance has said other incentives will be offered and companies will get free land for factories and business centers, and loans from Afghan state banks on easy terms.
The announcement is part of the plan to avoid flight of capital from Afghanistan amid the increasing concerns of insecurity and instability after 2014. The current security and political uncertainties about the situation after the US and NATO withdrawal has already caused a flurry of capital and other assets' flight from country.
Recent reports say the new trend is that people with assets in the country are now transferring it as gold bars inside airlines. Similar cash outflow was reported earlier, which continues. On the other hand, ordinary Afghans, particularly the youth are increasingly seeking for ways to leave the country.
Apart from such financial incentives for investment, the Government needs to take solid steps to undermine the perception of post-2014 uncertainty about political stability—the main source of all the worries. People are not actually afraid of return of Taliban or that it is even a distant possibility, but any political adventure with the transfer of power in Kabul scheduled for 2014 will cause our demise.
Such steps include all preparations for smooth power transfer through free, fair and transparent elections. The election law and voter registration are fundamental issues on which the rulers are playing delay tactic to turn the events in favor of their longevity and influence the process.
The international community, particularly major stakeholders such as the US and other NATO powers should also encourage their private sector for investment in Afghanistan.
It increases the uncertainty among other international companies to see that any major American or European company has not invested in private sector in Afghanistan, particularly our mining sector—an insurance of our economic independence and stability.
Recently there was $700 million investment by a joint US-Afghan company in the oil refinery plan in Northern Afghanistan. Governments of other NATO and donor countries should encourage their companies to benefit from the 10-years tax exemption incentive and invest in Afghanistan. They can do a great help by this to ensure suitability of their contributions in reconstruction of Afghanistan throughout the last decade.