Business
Afghanistan’s economy under the spotlight on eve of 1401, the new solar year
On the eve of Afghanistan’s new solar year, Nowruz, the year 1400 has proven to be one of increased economic hardships that ultimately led to a financial crisis in the country.
In August, the former government collapsed which sparked widespread panic among Afghans who rushed to banks to draw their money.
People queued for hours, for days and even weeks but as the Ashraf Ghani government tumbled and foreign troops withdrew, foreign funding that propped up the country came to a sudden halt and the banking system froze.
In order to prevent the complete collapse of the banking system, the Islamic Emirate of Afghanistan (IEA), which had swept to power, stepped in and imposed strict restrictions on the amount of cash people could withdraw.
Global sanctions added to the mix and made life even more difficult for Afghans – so much so that the IEA was unable to pay government employees their salaries for the first few months.
Gradually, the economic situation stopped its freefall and leveled out. Humanitarian aid helped ease hunger and shipments of cash from the United Nations has continued to come in to the country. Although sanctions are still in place, the UN has stepped in to assist with regards to the economy.
On a more positive note, some development projects have been kickstarted by the IEA these past few months – especially transit projects connecting Afghanistan to Central Asia.
However, Afghanistan’s economic situation is still critical.
Key problems are as follows:
• No new investments have been made in 1400 in the country
• With the coming to power of the Islamic Emirate, banking activities were suspended for a significant period of time
• International organizations stopped major projects they had been funding, leaving many projects unfinished
• Global sanctions were imposed on the country’s economic system
• Trade between Afghanistan and its neighbors stalled due to a lack of funding and political uncertainty for some time
• The Afghani (AFN) plummeted to a low of 130 AFN to the US dollar. It has since recovered somewhat
• Food and fuel prices have risen unprecedentedly
• About $9 billion of foreign assets were frozen by the United States
Despite all these challenges, the IEA has stepped up efforts to stabilize the economy and to improve the situation. The IEA came out in support of the private sector and worked hard to save the country’s economy from collapsing altogether.
The Ministry of Finance meanwhile said the economic situation in the country has improved slightly in the past few months and that the Islamic Emirate will take major steps to boost the economy in the new year (1401). The IEA also said it will launch some key development projects.
The Ministry of Finance, however, was unable to finance the budget for the new fiscal year from domestic revenue. This is not however new, as a major part of the budget has been funded by the international community for the past 20 years.
Economic experts believe the Islamic Emirate has taken effective steps to stabilize the economy, but many have said government needs to facilitate new investments.
Afghanistan’s private sector has in addition called on the Islamic Emirate to invest in agriculture and mining; to generate electricity; and develop transit, telecommunications, fiber optics and telecommunication sectors.
Business
Acting commerce minister meets Russian deputy PM
Nooruddin Azizi, Acting Minister of Industry and Commerce, met with Russia’s Deputy Prime Minister Alexei Overchuk to discuss trade and investment, it was announced on Friday.
Sergey Pavlov, General Director of Russian Railways, and Dmitry Zverev, Deputy Minister of Transport of Russia, were also present in the meeting, the Ministry of Industry and Commerce said in a statement.
According to the statement, the two sides discussed increasing the volume of trade, preferential tariff for Afghan goods, Russian investment in mines and water dams in Afghanistan, and Afghanistan’s role in the International North–South Transport Corridor.
They also discussed about reducing the cost of transportation through the Russian railway, removing the export tax on basic materials, arranging the trip of the delegation to the ports of Astrakhan and Makhachkala, and holding a trade connectivity conference and an expo of Afghan products in Moscow.
Azizi met with the Russian deputy PM on the sidelines of the Kazan Forum – the 15th International Economic Forum of Russia and the Islamic World.
He also met with representatives of a number of Tatarstan and Russia companies and encouraged them to invest in Afghanistan.
Business
Azizi meets with head of Tatarstan on sidelines of Kazan Forum
The Ministry of Commerce and Industry said Thursday acting minister Nooruddin Azizi met with the leader of Russia’s autonomous republic of Tatarstan, Rustam Nurgaliyevich Minnikhanov, on the sidelines of a meeting in Kazan.
According to the ministry, Azizi met with Minnikhanov on the sidelines of the Kazan Forum – the 15th International Economic Forum of Russia and the Islamic World.
The two officials discussed bilateral trade relations, the establishment of the Russian Trade House in Afghanistan, the visit of Minnikhanov to Kabul, investment in electricity production, water transfer, mining, cultural and economic cooperation and other matters.
This annual meeting is held by Russia and the 14th round of this meeting was also held in the same country last year.
The main goal of the forum is to strengthen trade and economic, scientific and technical, social and cultural ties between Russian regions and the countries of Organisation of Islamic Cooperation (OIC), as well as to promote the development of the Islamic financial system institutions in Russia.
Business
Afghanistan’s imports and exports totaled $10.3 billion last year
The National Statistics and Information Authority (NSIA) said on Wednesday that last year, the value of exports totaled $1.79 billion while imports totaled $8.57 billion.
According to NSIA, fruits accounted for the largest share of export items last year, totaling over $645 million.
Medicinal plants, minerals and vegetables were the next top three items respectively to be exported.
Meanwhile, petroleum and oil accounted for the largest portion of imported goods, totaling over $1.37 billion.
Another large portion of the total amount imported went to machinery, vehicles and parts. This totaled over $1.15 billion, followed by textiles, metals and metal products.
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