Afghanistan is strategically located as a hub between rich and resourceful Central Asia and the fast-emerging economies of South Asian nations. Canada and Canadian investors can play a pivotal role in the transformation of the land-locked country by helping it to become a land-linked and regionally reintegrated country. Boosting regional and global trade would lead to economic growth for Afghanistan.
The Afghan government remains committed to working towards shifting the economic direction of the country, from an aid-reliant country to a country that is self-sustaining and self-reliant. Promoting trade with its regional and international partners is one of its key goals. The focus is on private-sector development and investment in agri-business, mining, oil and gas, major infrastructure development projects and the promotion of small and medium enterprises.
Afghanistan has made significant progress in reconstruction and development as well as lifting per-capita income over the past decade. With significant effort by the government and donors, Afghanistan has maintained macro-economic stability and built policy buffers. The country also has been implementing important infrastructural reforms, lowered debt and inflation and made progress towards achieving social and developmental objectives.
Between 2015 and 2017, Afghanistan’s global exports rose from $580 million US to $784 million US, an increase of more than 35 per cent. The government anticipates a significant increase in 2018, estimated to surpass $1 billion US.
Regional trade and transit facilitation remain high priorities for Afghanistan’s government, which can tremendously strengthen regional co-operation, stability and prosperity and increase investment. It is vital for the self-reliance of Afghanistan to foster investment, both public and private, foreign and domestic, so that development assistance is replaced with sustainable sources of national income.
To generate and encourage this growth, the government is committed to improving conditions of international trade and transit through the development of policies and regulations, capitalization on regional and global trade linkages and boosting trade through assistance in trade-policy liberalization, customs reform and trade facilitation. Afghanistan became a member of the World Trade Organization in 2016 and has also passed a public-private partnership law. The government has also reduced regulatory burdens by cutting the price of business licences from $440 US to $1 US and providing on-arrival visas to investors. The country has launched multiple air corridors with India, Turkey, Indonesia, Uzbekistan, Kazakhstan and Saudi Arabia to expand trade with new partners.
The government’s national export strategy adopts an open-access policy to promote pro-trade interventions with trade diversification, development and growth. The government aims to achieve socio-economic sustainability by empowering youth and women, building institutions, facilitating regional connectivity and building infrastructure and investment in the mining, agriculture and industrial sectors.
Canada has remained a critical international partner in political as well as economic arenas. Bilateral trade between Canada and Afghanistan totalled $30.4 million in 2016. A major portion of the trade was merchandise exports to Afghanistan, which primarily constituted machinery and parts at $26.4 million. Canadian merchandise imports from Afghanistan were led by fruit and nuts, and stood at $4 million in 2016. Canadian companies are currently pursuing business opportunities in Afghanistan mainly in mining, information and communication technologies, transport, engineering services and agriculture.
Canada and Afghanistan have many potential economic opportunities that can be mutually beneficial — areas such as mining, agri-business, energy, mega-infrastructure projects, access to finance and banking and, importantly, promoting small and medium enterprises. When it comes to goods, fresh and dried fruits, saffron, marble and granite, carpets, precious stones and handicrafts produced by women in Afghanistan could attract markets across Canada.
The mandate of the Afghanistan embassy is to facilitate and promote a mutually beneficial relationship with Canada and Canadian investors. The embassy aims to facilitate discussions and a series of joint efforts between governments, private sector, chambers of commerce, trade and investment councils. It also aims to explore areas for economic empowerment of female entrepreneurs in Afghanistan that will lead to trade and investment agreements between Canada and Afghanistan.
Abdul Jabar Rahimi is the chargé d’affaires for Afghanistan. Reach him by email at j.rahimi@mfa.afor or by phone at (613) 563-4223.
