The Afghanistan Investment Support Agency (AISA) says there has been a 4 percent increase in the domestic investment in the first half of 2011 as compared to the same period of the last year. The security is at its worst. Despite that, if domestic investment has risen, it should be good news. But at the same time, there is bad news. The foreign direct investment (FDI) which holds more importance for Afghanistan than domestic investment has fallen. Bad security is considered the major reason behind low investment by Afghan themselves and failure of Afghanistan to attract foreign direct investment.
In order to boost up its economy Afghanistan is in dire need of investment in all sectors – agriculture, manufacturing and mining to services, education, and transportation and so on. Currently Afghan economy is highly dependent on foreign aid. The wellbeing of our economy seems to be at great stake as the international community is reducing its role and has announced its complete withdrawal in 2014.
The security factor is majorly responsible for the concerning economic condition we have today. Afghanistan is 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 persists as it is, it would be far difficult for Afghanistan to become self-reliant in economy – for which attracting investment has a vital role.
A number of measures have been taken by Afghan government to support investment but these measures have not been sufficient. Although laws for investment are still quite vague, the government has tried to facilitate investors by the scarce means available to it. The first significant step was the establishment of Afghanistan Investment Support Agency (AISA) back in September, 2003 for facilitating investors under one window operation. There is noteworthy number of national and foreign companies registered with AISA.
For the underdeveloped and foreign-dependent economy of Afghanistan, investment is considered lifeblood. Since security situation is not feasible for investment, significant foreign and domestic investment would continue to remain a dream for Afghanistan.