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
Afghanistan eyes direct Basmati rice imports from India amid tensions with Pakistan
Afghanistan is exploring direct imports of Basmati rice from India as it seeks to diversify its supply sources amid ongoing tensions with Pakistan, according to a report by The Hindu.
The report said Indian exporters and Afghan importers are expected to meet next month to discuss expanding direct trade in Basmati rice, following preliminary talks between officials from both countries held last week with the facilitation of the PHD Chamber of Commerce and Industry.
Afghanistan consumes nearly 500,000 tonnes of Basmati rice annually and has traditionally relied on imports from neighboring Pakistan. However, industry sources told The Hindu that recent strains in Afghanistan-Pakistan relations have encouraged Kabul to seek alternative suppliers, including India.
Representatives of Afghanistan’s diplomatic mission in New Delhi reportedly took part in the discussions and expressed interest in increasing purchases of Indian Basmati rice. At present, some Indian rice reaches Afghanistan indirectly through traders in Iran and Dubai, a route that adds to transportation and transaction costs.
One proposal under consideration is to transport rice through Iran’s Bandar Abbas Port, subject to agreements between the two governments. The discussions are also expected to cover logistics, payment mechanisms, and the possibility of barter trade, with Afghanistan’s dried fruit exports to India seen as a potential component of future trade arrangements.
According to The Hindu, a direct trade arrangement could help India expand its share of Afghanistan’s Basmati market, which has historically been dominated by Pakistani suppliers.
Business
Afghanistan, Kyrgyzstan establish trade council to boost economic cooperation
The two sides signed a memorandum of understanding to establish the Afghanistan-Kyrgyzstan Trade Council.
The Embassy of the Islamic Emirate of Afghanistan in Kyrgyzstan says the Afghanistan-Kyrgyzstan Business Forum has been held with the participation of officials from both countries.
According to a statement issued by the embassy, Acting Ambassador Abdul Shakoor Haqqani said Afghanistan supports strengthening bilateral trade relations and promoting joint economic initiatives between the two countries.
The statement added that the two sides signed a memorandum of understanding to establish the Afghanistan-Kyrgyzstan Trade Council. The council aims to strengthen ties between business communities, coordinate joint initiatives, and expand and support economic projects.
Meanwhile, Sayed Karim Hashemi, Chairman of the Afghanistan Chamber of Commerce and Investment, arrived in Kyrgyzstan on Saturday at the head of a trade delegation to participate in the forum.
Business
Afghanistan invites Turkish investors to expand joint investments
Participants stressed the importance of increasing private sector cooperation and creating new opportunities to boost trade and investment between Afghanistan and Türkiye.
A high-level Afghan business delegation, led by the Chairman of the Balkh Chamber of Commerce and Investment, Mohammad Ibrahim Ghazanfar, participated in the Afghanistan–Türkiye Joint Business Council meeting in Istanbul, calling for expanded joint investment and stronger economic cooperation between the two countries.
According to a statement from the Balkh Chamber of Commerce and Investment, Ghazanfar invited Turkish investors and industrialists to explore investment opportunities across various sectors in Afghanistan, emphasizing the country’s potential for mutually beneficial partnerships.
The meeting brought together business leaders, investors, and private sector representatives from both Afghanistan and Türkiye to discuss ways to strengthen bilateral trade and economic ties.
During the event, several cooperation agreements were signed between Afghan and Turkish economic institutions. The agreements are aimed at expanding commercial relations, promoting joint investment projects, and enhancing economic cooperation between the two countries.
The meeting was chaired by Süleyman Güllü, Chairman of the Türkiye–Afghanistan Joint Business Council, and was attended by Mohammad Akbar Azimi, the Islamic Emirate of Afghanistan’s Consul General in Istanbul, along with a number of businessmen and investors from both countries.
Participants stressed the importance of increasing private sector cooperation and creating new opportunities to boost trade and investment between Afghanistan and Türkiye.
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