Afghanistan: The Land of Dreams and Industry

Apr 24, 2012 at 6:12 pm Leave a comment

This post originally appeared on the Building Markets blog on November 17, 2011.

Optimism. The Afghan-American Chamber of Commerce Business Matchmaking conference held earlier this week can be summed up by that one word.

Whether an Afghan government official or business owner, an official from a US government agency or a CEO of an American company working in Afghanistan, everyone spoke about the urgency of strengthening Afghanistan’s private sector before Coalition forces pull out in 2014. But any mention of this transition was always followed by remarks about the private sector that were filled with an electrifying optimism.

Perhaps H.E. Asif Rahimi, the country’s Minister of Agriculture, Irrigation and Livestock said it best: “Gloomy people watch the news and see only that donors are going away…Everyone is asking how Afghanistan can become more self-reliant. The answer is business.”

Conference attendees were full of optimism not only because they had inspiring ideas but also because many were well on their way to achieving them.

Telecom Industry

The telecoms industry in Afghanistan has exploded in recent years, going from .05 percent phone coverage in 2002 to 80 percent today. The sector is one of the major pistons of Afghanistan’s economic engine. It attracts a large amount of investment and provides the largest tax revenue of any domestic industry, about ten percent of all revenue generating activities. Additionally, it has created about 100,000 jobs indirectly and has invested $1.2 billion into building Afghanistan’s first-ever national telephone network. There is still much room for the sector to grow. Rural areas, home to about 20 percent of the population, remain unconnected. As the telecom sector develops, it means more jobs and connectivity for ordinary Afghans and a continued stream of tax revenue and investment for the country.

Source: ABC News

Mining

In 2010, major media outlets broke the news that Afghanistan was sitting atop $1 trillion worth of mineral deposits, including iron, copper and gold. The country faces huge challenges to getting this sector off the ground, such as security, lack of infrastructure and the infamous resource curse. Most likely, it will take years to attract top global mining companies, but Chinese companies are already clearing the way and expect to begin production at the Aynak Copper Mine south of Kabul in 2014. It will be a challenge for the country to properly manage such projects, but, if done well, it presents huge opportunities to bolster the country’s economy.

Airline Industry

“We are not focused on 2014. To us it is simply a thing that will happen,” says Michael Timcke, Director of Business Development for Kam Air, one of Afghanistan’s three airlines. Landlocked, Afghanistan is rapidly expanding its air industry. Its national airline carrier, Ariana, was incorporated by PanAm in the late 1950s and services expanded quickly throughout the region.

By the 1970s, Ariana employees were providing technical assistance to Turkish Airlines. “There’s no reason why we can’t go back to that,” says Timcke. Currently, the country’s three airlines have a total of 18 planes. In 2001, there were none. Those numbers sum up both how far the airline industry has come and how far it still has to go.

Agriculture

Afghanistan’s Agriculture, Irrigation and Livestock Minister Asif Rahimi is quick to put naysayers, who focus on the possible negative effects of his country’s transition aside. After all, he’s got more important things to think about, like pomegranates, almonds and, what Rahimi calls, the “caviar” of saffron. Rahimi has a top ten list of agricultural products that he predicts will be major factors to drive Afghanistan’s growth Some of the products on the list need entire supply chains to be built, such as lamb and pistachios, while others can simply be ramped up. For example, there is a huge market for seasonal flowers from Afghanistan in the Middle East and Europe. Why not break into the market of the US? It’s ambitious plans like these that will allow Afghanistan to enter new markets and spur its development.

Despite all the negative news coming out of Afghanistan, PDT is inspired to know and work with Afghans on the ground who are dreaming up big ideas, making business connections and growing their country.

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Entry filed under: Afghanistan, Economic Development. Tags: , , , , , .

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