Business
World Banks says Afghanistan’s economy adjusting to new realities
The World Bank said in it’s latest Afghanistan Development Update report that the country’s economy is adjusting to a “new normal” following the collapse of the former government and take over by the Islamic Emirate of Afghanistan (IEA).
According to the report, a sharp decline in public spending, lower household incomes, and reduced consumption caused aggregate demand to fall, while disruptions in the payment system and supply constraints further hampered private sector activities, initially forcing many businesses to close or scale down their operations.
The report noted that preliminary statistics on the gross domestic product (GDP) show that the economy contracted by about 20 percent in 2021.
However, the resumption of off-budget international support for humanitarian needs and basic services helped mitigate some of the negative impacts over the past year.
The report concludes that Afghanistan’s economy is now much smaller than before after contracting significantly. The economy has now reached a point where it is likely to plateau.
The World Bank stated that while inflation remains high, some indicators have improved: exports have increased, exchange-rate volatility has reduced, and domestic revenue collection is relatively healthy.
In addition, private businesses are adjusting to the new operating environment.
“While there are signs of economic stabilization and resilience of Afghan businesses, the country continues to face enormous social and economic challenges that are impacting heavily on the welfare of the Afghan people, especially women, girls, and minorities,” said Melinda Good, World Bank Country Director for Afghanistan.
“Living conditions showed slight improvements in the past few months, but deprivation remains very high across the country, and persistent inflation might further erode any welfare gains,” she added.
The report projects that the real GDP in 2022 will contract further, with an accumulated contraction of close to 30-35 percent between 2021 and 2022.
“A range of economic and political scenarios is possible for Afghanistan’s future. While all scenarios depend on continued off-budget aid from the international community, a more upside and sustainable trajectory requires actions by the interim Taliban (IEA) administration to unlock much-needed economic integration and domestic opportunities for the private sector to create jobs for the Afghan people,” added Good.
Business
Shoemaking industry in Takhar province facing stagnation
A number of shoemakers in northern Takhar province say that while their handmade shoes are of better quality than imported shoes, but still sales are down.
According to them, there were more than 20 shoe-making shops in the past, but now some have been closed due to the decline in sales.
The shoemakers make most of their shoes from leather. A number of industrialists say that this industry is now facing stagnation.
Abdul Raqib, a shoemaking factor owner, said: “The government should support us. Currently, we import soles. It can be made with good quality in Afghanistan, and we could even compete against Turkish shoes.”
Meraj, another shoemaking factory owner, said: “Shoe sales were higher in the republic era. There were military shoes. Sales have declined now, but we still thank Allah.”
Shoemakers make these shoes with basic tools and by hand, with 5 to 8 people working in each shop.
Javed, a shoemaker, said: “Our sales are not so good. We can make any type of shoe or slipper. We want the government to support us.”
A number of Takhar residents say that domestically produced shoes are of high quality and with lower price compared to imported shoes, so people prefer domestic products to foreign products.
Mir Ata, a resident of Takhar, said: “We are very happy about domestic shoes. People should buy it. They are of good quality.”
However, the officials of Takhar Industry and Commerce Department say that they are committed to support the industrialists.
Abdul Rahman Ghaznawi, provincial director of industry and commerce, said: “People prefer domestic shoes and slippers. Takhar’s products are sold in Kunduz, Baghlan and Badakhshan as well.”
Meanwhile, industrialists say that if the government supports them, they will be able to make the best products and can be more competitive.
Business
Daily truck clearances at Torkham drop from 400-500 to 5-10
Pakistan’s Sarhad Chamber of Commerce and Industry (SCCI) has said that daily truck clearances at Torkham crossing have declined from 400-500 to 5-10.
SCCI President Fazal Muqeem Khan said this at the signing ceremony of a memorandum of understanding (MoU) with the Pakistan-Afghanistan Joint Chamber of Commerce and Industry to promote bilateral trade and cooperation.
He said the volume of trade between Pakistan and Afghanistan had fallen from $3 billion to $1 billion annually.
Fazal Muqeem also highlighted the adverse impact of the 2% Infrastructure Development Cess (IDC) imposed by the Khyber-Pakhtunkhwa government on trade and transit.
Business
Turkish scholars, charity officials assess investment prospects in Afghanistan
Officials pledged to encourage Turkish investors to explore and capitalize on investment opportunities in Afghanistan
Afghanistan’s Acting Minister of Energy and Water, Mullah Abdul Latif Mansoor, met with a delegation of Turkish scholars and officials from the Adif Charity Foundation on Tuesday to discuss various political, religious, and social issues.
According to the Ministry of Energy and Water, Mullah Mansoor praised Adif’s humanitarian efforts in Afghanistan and highlighted the country’s ample resources for energy production.
He emphasized that Afghanistan currently offers a favorable environment for investment in all sectors, assuring the Turkish delegation of the Islamic Emirate’s commitment to ensuring the safety and security of investors and their assets.
In response, Adif officials pledged to encourage Turkish investors to explore and capitalize on investment opportunities in Afghanistan, signaling a potential boost in economic and developmental cooperation between the two nations.
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