pakistani342
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Lengthy but timely article on DW here, excerpts below -- as I've said before, the 80 TV channels are no indicator of progress for Afghanistan -- the beginnings of an organic economy would be:
"In its current state, the Afghan private sector is not the engine of economic growth or instrument of social inclusion it has the potential to be," said researchers from the Stockholm International Peace Research Institute (SIPRI) and the International Council of Swedish Industry (NIR), in a summary of the report released on October 12.
...
Afghanistan's economy is a complex mix of informal, formal, illicit and aid-sustained elements, with the private sector contributing a mere 10 to 12 percent to the country's official gross domestic product (GDP), according to SIPRI - a product of a decades-long mix of protracted conflict, low state capacity, foreign interference and external aid dependence.
...
They say, for instance, that the administration of former President Hamid Karzai - who governed until 2014 - allowed the post-intervention conflict and aid economy to create new revenue channels for an existing and emerging oligopoly. "Lack of interest and incapacity by political authorities have resulted in weak formal economic institutions, largely unaccommodating economic policies and regulatory failure."
...
In their report, the Sweden-based experts also expressed concerns about the high unemployment levels and the fact that informal institutions tend to, among other groups, marginalize women, who make up around half of the potential labor and entrepreneurial force. In fact, formal employment is extremely low in the country and has contributed to the current exodus of young Afghans, especially to neighboring countries and Europe.
But maintaining a business in the conflict-ridden country is easier said than done, as Yusupov explained. "Business is often not stable and the capacity for medium-term planning is low. A bad year or a security-related incident such as extortion, racket, kidnapping of family members of employees can terminate an enterprise very quickly."
Moreover, production costs are high and even the simplest manufacturing or agricultural products are easier to import than to produce. "This means you mostly have trade and services as main activities, both of which are highly dependent on the security situation and trade on the relations with neighboring countries," the Afghanistan expert added.
...
These constraints are compounded by extra-market conditions such as a deteriorating security situation, concerns over the national unity government's longevity and effectiveness, lingering and rampant corruption, and an external aid flows that distort the domestic marketplace.
As a result, Afghan entrepreneurs who are able to run profitable businesses as well as avoid criminal pressure and governmental regulations, tend to take their money out of the country. "The majority of private entrepreneurs secure their profits in Dubai, buy property in Pakistan or Iran, keep their capital fluid and quickly moveable," said Yusupov.
...
But Michael Kugelman, South Asia expert at the Washington-based Woodrow Wilson Center, stresses that while the key obstacles may be simple to identify, they are very difficult to do away with. "At the end of the day, the key is the government," he told DW.
"In its current state, the Afghan private sector is not the engine of economic growth or instrument of social inclusion it has the potential to be," said researchers from the Stockholm International Peace Research Institute (SIPRI) and the International Council of Swedish Industry (NIR), in a summary of the report released on October 12.
...
Afghanistan's economy is a complex mix of informal, formal, illicit and aid-sustained elements, with the private sector contributing a mere 10 to 12 percent to the country's official gross domestic product (GDP), according to SIPRI - a product of a decades-long mix of protracted conflict, low state capacity, foreign interference and external aid dependence.
...
They say, for instance, that the administration of former President Hamid Karzai - who governed until 2014 - allowed the post-intervention conflict and aid economy to create new revenue channels for an existing and emerging oligopoly. "Lack of interest and incapacity by political authorities have resulted in weak formal economic institutions, largely unaccommodating economic policies and regulatory failure."
...
In their report, the Sweden-based experts also expressed concerns about the high unemployment levels and the fact that informal institutions tend to, among other groups, marginalize women, who make up around half of the potential labor and entrepreneurial force. In fact, formal employment is extremely low in the country and has contributed to the current exodus of young Afghans, especially to neighboring countries and Europe.
But maintaining a business in the conflict-ridden country is easier said than done, as Yusupov explained. "Business is often not stable and the capacity for medium-term planning is low. A bad year or a security-related incident such as extortion, racket, kidnapping of family members of employees can terminate an enterprise very quickly."
Moreover, production costs are high and even the simplest manufacturing or agricultural products are easier to import than to produce. "This means you mostly have trade and services as main activities, both of which are highly dependent on the security situation and trade on the relations with neighboring countries," the Afghanistan expert added.
...
These constraints are compounded by extra-market conditions such as a deteriorating security situation, concerns over the national unity government's longevity and effectiveness, lingering and rampant corruption, and an external aid flows that distort the domestic marketplace.
As a result, Afghan entrepreneurs who are able to run profitable businesses as well as avoid criminal pressure and governmental regulations, tend to take their money out of the country. "The majority of private entrepreneurs secure their profits in Dubai, buy property in Pakistan or Iran, keep their capital fluid and quickly moveable," said Yusupov.
...
But Michael Kugelman, South Asia expert at the Washington-based Woodrow Wilson Center, stresses that while the key obstacles may be simple to identify, they are very difficult to do away with. "At the end of the day, the key is the government," he told DW.
