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World Bank survey finds Afghan firms still face ‘daunting challenges’

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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.”

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Iran’s non-oil exports to Afghanistan rise by 31% this solar year

Iran’s imports from Afghanistan also rose sharply, totalling over $33 million, a 192% increase in this period

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Iran's non-oil exports to Afghanistan surged by 31% in the first half of this solar year (April to September 2024), totalling over $1.77 billion.

According to Iran’s trade association in Afghanistan, both the value and volume of non-oil exports to Afghanistan saw substantial growth. 

Statistics provided by the association indicate that nearly 560,000 tons of Iranian goods, including iron, steel, cement, eggs, and potatoes, were exported to Afghanistan during this period.

Iran’s imports from Afghanistan also rose sharply, totalling over $33 million, a 192% increase in this period. 

The primary exports to Iran included barley, corn, peanuts, and chilies.

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Private sectors of Afghanistan, Kazakhstan sign contracts worth $100 million

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Private sectors of Afghanistan and Kazakhstan have signed contracts worth $100 million during the visit of an Afghan delegation to Almaty recently, the Islamic Emirate of Afghanistan (IEA) announced on Thursday.

The agreements include the export of more than 2,000 tons of dried fruit, the export of fresh fruit, including pomegranates, and the export of cotton, Zabihullah Mujahid, a spokesman for the Islamic Emirate, said on X.

Mujahid said that the Islamic Emirate delegation during its recent visit to Kazakhstan signed a "road map of cooperation between Afghanistan and Kazakhstan in the fields of trade, industry, mining, energy, logistics, agriculture, telecommunications, health, higher education and humanitarian aid.”

He said Kazakhstan also assured that it would provide more facilities for the transit of Afghan goods to China and other countries through Kazakhstan.

The allocation of an area "as a logistics center for Afghan goods" in the port of Khargos was also part of the agreement between the two sides to facilitate the unloading and loading of Afghan traders' goods.

The spokesman of the Islamic Emirate also said that Kazakhstan will participate in the construction of the Torghundi-Herat, Kandahar-Spin Boldak and Mazar-e-Sharif-Kharlachi railway projects.

Mujahid added that Kazakhstan will also participate in the establishment of a trade and transit center in Herat province, which will be used to store and finance trade and transit goods. Meanwhile, Kazakhstan has agreed to establish permanent expo centers for the sale of Afghan goods in various cities of Kazakhstan.

It is worth mentioning that the delegation of the Islamic Emirate led by Nooruddin Azizi, Acting Minister of Industry and Commerce, participated in the three-day exhibition of Afghanistan's domestic products, which was launched on October 21 in Almaty.

The Ministry of Industry and Commerce recently announced that 23 tons of pomegranates from Kandahar province were exported to Almaty through the port of Torghundi.

 

 

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China resumes direct rail trade with Afghanistan

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China resumed its direct freight rail services to Afghanistan on Thursday when a train loaded with goods left Nantong city in Jiangsu province.

The train, carrying commercial goods in 55 wagons, is heading for the northern Hairatan border in Balkh province, Yue Xiaoyong, China’s Ministry of Foreign Affairs' Special Representative for Afghanistan, said in a post on X.

Nantong is a central hub of the Belt and Road Initiative and is located north of Shanghai.

The resumption of the rail line was marked at a formal ceremony on Thursday with Yue and Bilal Karimi, the Afghan Ambassador to China, in attendance.

This comes after China recently announced plans to lift customs tariffs on Afghan exports to China by the end of this year, further strengthening trade ties between the two nations.

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