Participants at the Nangarhar PBA launch event.
A year after the impasse over the 2014 presidential election was resolved, Afghanistan finds itself at a critical juncture in its economic development. Given the dramatic reduction in foreign military presence over the past several years and the decrease in development assistance from the international donor community, concerns are mounting that Afghanistan’s economy will be unable to sustain itself.
A recent study published by the Stockholm International Peace Research Institute (SIPRI) and the International Council of Swedish Industry (NIR) draws attention to the problem. “In its current state,” the report notes, “the Afghan private sector is not the engine of economic growth or instrument of social inclusion it has the potential to be. Popular dissatisfaction with unequal access to economic resources, flawed public services and goods, the adverse security situation, and predatory government activity undermine an effective and sustainable private sector.”
President Ashraf Ghani and the National Unity Government have laid out a wide range of proposals to kickstart economic development, but security conditions and political infighting have made it difficult to implement many of these reforms. Nevertheless, hope for progress and success remains. The Swedish report, while painting a grim picture of the current outlook, provides a concrete set of recommendations to Afghan government policymakers, the international donor community, and other key stakeholders, for incentivizing private sector growth and boosting economic development, thereby improving prospects for peace and stability.
Chief among these recommendations is the need for the Afghan private sector to play a greater role in the policy making process. On October 28, over a hundred leaders of the Afghan business community, civil society, and media, as well as prominent provincial and national government figures, convened in Jalalabad for the official launch of the report of the Nangarhar Provincial Business Agenda.
The report contains a list of concrete policy recommendations to improve the business climate in Nangarhar province, and was compiled at a summit meeting of businessmen and key stakeholders, which was also held in Jalalabad, and was convened by a task force of fifteen business associations including the Nangarhar branch of the Afghanistan Chamber of Commerce and Industry, with CIPE’s support. Over 400 businessmen and women attended the summit meeting, hailing from across Nangarhar province, as well as from neighboring Kunar and Laghman provinces.
Afghanistan remains one of the most difficult countries in the world to do business. The World Bank’s 2016 Doing Business Report ranks Afghanistan 177 out of 183, behind Iraq, Yemen, and Syria. By releasing this report, CIPE and the Nangarhar PBA task force hope to initiate a vital and sorely needed dialog between government stakeholders and members of the business community that will lead to implementation of reforms needed to improve business conditions, encourage investment, and jump start commercial growth in Nangarhar province.
CIPE Afghanistan Country Director Mohammad Nasib opened the event by highlighting how the Provincial Business Agenda, as the collective voice of the Nangarhar business community, can serve as an important tool for advocacy efforts and public-private sector dialog. Addressing the attendees as a keynote speaker, Nangarhar Governor Saleem Khan Kundozi stated that “the private sector plays a great role in the creation of job opportunities, economic growth, and development. In order to encourage private sector investment in the country, we should create an enabling business environment.” Governor Kundozi further committed to working to implement the proposed policy reforms in the PBA and promised to closely coordinate and work with task force members to do so.
The Nangarhar PBA launch event is an important step forward in CIPE’s Provincial Business Agenda program, a grassroots effort that organizes the business communities of four key Afghan provinces that act as major commercial hubs, and develops their capacity to advocate for reform and engage with government stakeholders to develop the policy framework needed to foster commercial and economic growth.
As the drawdown in international assistance has been most keenly felt outside of the capital region, the PBA program works to incentivize economic growth at the provincial level, where it is needed the most. In addition to Nangarhar, CIPE will support the release of Provincial Business Agendas for Herat, Balkh, and Kandahar provinces in the coming months.
The SIPRI/NIR report states that “the Afghan private sector, in addition to leading economic growth, contribute to improving human and traditional security conditions in the country.” By bringing together and supporting business leaders and policymakers in developing relevant policy reforms, specifically at the provincial level, CIPE is playing a key role in advancing economic growth and development in Afghanistan, a country which, after over thirty years of unending conflict, continues to be in dire need of assistance from the international community.
With CIPE’s support in identifying major impediments and obstacles to commercial development, developing concrete policy recommendations to overcome them, and then effectively communicating these recommendations to relevant policymakers, the Afghan business community can play a vital role in developing the business policy framework the country needs to jump-start economic growth and improve conditions that can lead to increased stability.
Read a summary of the PBA and download the full report here.
Vivek Shivaram is a Program Assistant for South Asia at CIPE.