Business
World Bank survey finds Afghan firms still face ‘daunting challenges’
The World Bank said Monday many businesses in Afghanistan are adjusting to the new business environment but most still face daunting challenges.
The World Bank’s second private sector survey, published Monday, was conducted in May and June 2022.
The Private Sector Rapid Survey (PSRS) Round 2 assessed the status, constraints, and investment outlook of businesses, and the impacts of the ongoing economic challenges faced by private sector firms in Afghanistan.
“Afghanistan continues to face enormous social and economic challenges that are impacting heavily on the welfare of its people, especially women, girls, and minorities.
“The new survey confirms the resilience of Afghanistan’s private sector, which can play a key role in the economic recovery of the country and improving the lives of all Afghans,” said Melinda Good, World Bank Country Director for Afghanistan.
“It also shows that firms continue to suffer from impacts of political uncertainty and policy fragmentation, Afghanistan’s isolation from the international financial sector, and reductions in international assistance,” she said.
More than three-fourths of firms surveyed in Round 2 are operational, compared to two-thirds in Round 1, conducted in October and November last year.
However, most are operating significantly below their full capacity and are only considered partially open, the World Bank stated. Consumer demand appears to have slightly improved in past months but remains considerably lower than before August 2021.
Employment remained around 50 percent lower, on average, than before August 2021, compared to 61 percent lower in Round 1 of the survey.
Women-owned businesses are most affected by restrictions on women’s mobility, resulting in disproportionate revenue and job losses, World Bank stated.
Female employment remains 62 percent lower than before August 2021, while it was 75 percent lower in November 2021.
In addition to this, the World Bank found that businesses continue to be negatively impacted by the loss of international banking relationships, which has disrupted international payments and limited access to bank accounts and formal banking.
“Firms are resorting to the use of informal money transfer systems for domestic payments,” the bank stated.
Despite some businesses hiring employees, the majority of respondents have coped with these challenges by laying off employees, shifting to cash and informal payment channels, shrinking investments, and lowering staff salaries, World Bank reported.
“Action is required by the authorities to unlock possibilities for much-needed international economic integration and domestic opportunities for Afghanistan’s private sector,” said Good.
“This includes increased transparency in public finances and reestablishing central bank independence. With measures like these and continued resilience of businesses, a sustainable private sector-led recovery is possible.”
Business
Mullah Baradar inaugurates a blanket factory in Kabul
About 930 million Afghanis have been invested in the factory and it currently has the capacity to produce 1000 blankets per day.
Mullah Abdul Ghani Baradar, the economic deputy prime minister, on Sunday inaugurated a blanket factory in Pul-e-Charkhi industrial area in Kabul city.
Speaking at the inauguration ceremony, Baradar said that with the provision of overall security in the country and the reduction of corruption, a favorable environment for medium and small investments has been created.
He added that the Islamic Emirate continues to support domestic industries by implementing effective import substitution policies, which plays an important role in strengthening the country's national economy.
Baradar stated that in order to support domestic industries, heavy-duty machines worth 100 million afghanis ($1.4 million) were purchased for the newly established blanket factory based on the Islamic Murabaha Islamic financing structure.
Murabaha is a sales contract where the buyer and seller agree on the markup or "cost-plus" price for the item being sold.
Baradar also mentioned that the Islamic Emirate seeks to reduce dependence on foreign imports by increasing the level of investment.
He called businessmen and investors to invest inside Afghanistan for the economic growth of the country.
According to Baradar’s office, the newly established blanket factory uses domestically sourced raw materials including wool and cotton, which will help increase job opportunities in addition to strengthening the livestock and agriculture sector.
About 930 million afghanis has been invested in the factory and it currently has the capacity to produce 1,000 blankets per day.
The factory has employed about 900 people.
Business
Trade volume between Kabul-Tehran has reached over $1.8 billion: MoIC
Afghanistan News: Iranian officials also stated that since the beginning of this year, the export of non-oil goods to Afghanistan has increased to $1.3 billion
Ministry of Industry and Commerce (MoIC) says the trade volume between Afghanistan and Iran has reached more than $1.8 billion over the past seven months of 1403 [solar year].
The ministry's spokesman Abdulsalam Jawad Akhundzada said these trades include oil and non-oil goods.
According to Jawad Akhundzada, trade and transit with Iran is expanding.
“Afghanistan's trade with Iran during the seven months of 1403 was worth $1 billion 827 million dollars, of which 30 million dollars were exports and $1 billion 797 million dollars were imports,” said Akhundzada.
“Most of the major export goods are mineral stones, raisins, all kinds of soft drinks and sesame seeds, and the main import items are diesel fuel, petrol, raw materials for manufacturing, liquid gas and cement,” he added.
Meanwhile, Iranian officials also stated that since the beginning of this year, the export of non-oil goods to Afghanistan has increased to 1.3 billion dollars.
Tehran Times newspaper quoted the Iranian customs officials and reported that Afghanistan was Iran's fifth largest importer of non-oil products in the last seven months.
Business
Afghanistan-India trade volume totals $650 million so far this year
Trade between Afghanistan and India totals $650 million in the first 10 months of this year, the Islamic Emirate’s Ministry of Industry and Commerce announced this weekend.
In a post on X on Saturday, the ministry’s spokesman Abdulsalam Jawad Akhundzada said $477 million in exports and $203 million in imports were recorded this year.
He said Afghanistan’s main exports to India included dried figs, raisins, saffron, green cumin, and almonds.
According to Akhundzada, the main items imported from India over the past 10 months were sugar, raw materials for industrial factories, new clothing, and roasted chickpeas.
Just last week, JP Singh, Indian foreign ministry’s joint secretary for the Pakistan-Afghanistan-Iran division, visited Kabul and met with Acting Foreign Minister Amir Khan Muttaqi.
The two sides discussed political and economic relations between Afghanistan and India, and people's movements, the Afghan foreign ministry said in a statement.
Muttaqi expressed hope that relations between India and Afghanistan would expand in various fields. He stressed that to develop trade relations, Indian visa facilities should be increased for Afghan citizens, especially businesspersons.
According to the statement, JP Singh said that relations with Afghanistan are important for India and have an ancient history.
The Indian diplomat said that along with humanitarian aid to Afghans, India has also started development assistance to Afghanistan and is engaged in technical discussions with relevant Afghan institutions.
JP Singh stressed that in the near future, negotiations will be held between technical delegations of regional countries including Afghanistan and India on the Chabahar port.
He also promised to increase Indian visa facilities for Afghans.
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