Editor in Chief: Moh. Reza Huwaida Tuesday, May 26th, 2020

Afghanistan’s Economic Opportunities and Challenges


Afghanistan’s Economic  Opportunities and Challenges

stepping up commercial exchanges and promoting trade and transit are highly essential for Afghanistan to tackle economic challenges. Afghanistan is seeking to enhance connectivity and link itself to regional states to lift people out of poverty and capitalize on the economic potentials for public betterment.
Afghanistan is a fast growing emerging market of strategic importance close to some of the largest and fastest-growing markets in the world, Afghanistan is strategically located between the energy-rich republics of Central Asia and the major seaports in South Asia providing a key transit route for central Asian oil and gas to markets in South Asia as well as overseas.
It has been stated that Afghanistan holds greater than one trillion dollars’ worth of mineral resources, including gold, iron, copper, aluminum, gemstones, chromite, Sulphur, and talc.
In terms of agriculture, a source said that “about 85% – 90% population in rural areas is engaged in the agriculture sector which plays a vital role in the livelihood of 76% of the total population. It is responsible for about a quarter of the country’s Gross Domestic Product (GDP) in the recent years. Fresh fruits, vegetables, nuts, olive, wheat, maize, sugar can, sugar beet, barely, dairy, honey, poultry, meat, milk, fish, sunflower, sesame, linseed, saffron, cumin and anise are the agricultural products of Afghanistan.”
After 2015, Afghanistan’s economic growth raised from one person to two percent and government and private sectors started investing in several economic sectors. For instance, Afghanistan was linked to Turkmenistan through Aqina port, it was also connected with Uzbekistan via railway and its route creating the way to trade with China. Afghanistan opened the Lapis Lazuli corridor, which facilitated trade and transit with Turkmenistan and some of the Asian and European countries. Moreover, Chabahar port increased Afghanistan’s trade volume.
Last month, Afghanistan signed Memoranda of Understanding (MoUs) with Turkmenistan in a bid to expand rail network and increase energy import and attract investment. Afghan Acting Finance Minister Mohammad Humayon Qayyoumi is cited as saying that the MoUs are aimed at attracting investment for the Torghondai-Herat and Aqina-Andkhoi rail networks and increasing 110 megawatts of electricity import from Turkmenistan to Farah province via Herat’s Shindand district.
Afghanistan opened air corridors with some countries, including India and China to support private enterprises and businessmen to export Afghanistan’s products, which include dried fruit, fresh fruit, saffron, and precious stones. Although the air corridors will not address the current huge economic constraints, they will mitigate the challenges to some extent. For example, the price of water melon dropped drastically despite the recent inauguration of air corridors, which discouraged a number of farmers.
In addition to exporting the country’s agricultural products overseas, those products should also be exported across the country. That is, the government has to seek a balanced development through connecting far provinces to capital cities. A Chinese saying goes that if you want to be rich, you must build roads at first. It suggests that connectivity plays a key role in economic development. Roads, which include all sea, air, and land routes and airports, will link a country to the region and the world and a remote province to large cities. Thus, building roads and enhancing connectivity contribute much to a country’s economy.
Illegal mining deals a strong blow to Afghanistan’s economy. Militant fighters and strongmen and influential figures are said to be involved in illegal mining and smuggling Afghanistan’s precious stones outside the country. Afghanistan has to bring the illegal miners to justice and prevent illegal mining immediately. Moreover, mineral resources have to be secured.
Generally speaking, although Afghanistan has a strategic geographical location with mineral resources and huge labor forces, economic constraint continues unabated. There are two main challenges before the economic development. First, militancy hampers economic activities and discourages businessmen and NGOs to invest in the country. With lack of investment and enterprises, unemployment will surge up. Second, corruption and the existence of corrupt figures within the government’s body and illegal activities of strongmen also lead to poverty. Corrupt figures must be prosecuted and fined seriously.
To enhance the economy and lift citizens out of poverty, the government has to focus on both facilitating trade and campaigning against any factors which hamper economic development. The government has to promote connectivity and seek balanced development. That is, a platform for economic activities should be provided for all citizens and provinces so that all could participate and benefit. Meanwhile, the government should upgrade the country’s agriculture.

Hujjatullah Zia is the permanent writer of the Daily Outlook Afghanistan and freelance writer based in Kabul. He can be reached at zia_hujjat@yahoo.com

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