An expert on Afghanistan’s economy urges the international
Author:
Clara Hogan
14 March 2010 - Issue : 877
When will Afghanistan become truly self-sustaining?
The age-old question is still looming above the international community despite politicians’ attempts to set timeframe estimates of when outsiders could finally leave the country in the hands of an established and long-standing democratic system.
When such a world for Afghanistan will actually occur is largely unknown, and likely to be more than 15 years away, though a key factor that could help speed up the process may still be being ignored by those involved in the rehabilitation efforts: enhancing the private sector.
Since 2002, billions of international dollars have poured into Afghanistan to fund military expenditures, development projects, and humanitarian aid efforts. But now, some are calling for an increased emphasis on building the country’s private market to increase stability.
One of the major players in pushing this idea forward has been Jaime McCampbell, an economic expert who has devoted much of her life to informing people of why a private market system is vital to Afghanistan’s future as a stable nation.
“My point of view is that long-term stability and sustainment of the economy and the country will only come if you have a very large involvement of the private sector; now whether the private sector is coming from Afghanistan itself or the outside, that’s not quite as important as the fact that they need to be there period in the planning stages and the execution states,” she told New Europe in Brussels.
McCampbell’s work at times has been an exercise in “extraordinary frustration” as she tries to get foreign investors interested in one of the most unstable countries in the world.
She is now transitioning back to the private sector after spending three years at NATO, where she served as the first person devoted to economic security in the organization that traditionally only thought in a military fashion. Her mission, at first, was to find European companies willing to invest in Afghanistan, but she quickly learned they were simply not interested in doing business somewhere that is wrought with bureaucratic and corruption issues. Her struggle has been to make people, who have only worked in the governmental their whole lives, understand the need for the private sector as the driver of the economy.
Despite the bureaucracy and complications surrounding Afghanistan’s future, McCampbell remains positive about its possibilities. The country has many rich markets, aside from poppy, that have not begun to reach their potential, from some of the world’s greatest apples to the largest availability of quality marble across the globe. In addition, there is an up and coming population of Afghan women eager to get to work.
As the supplier of 92% of the world’s heroine, Afghanistan’s economic system has become famous for its focus on farming poppy seeds. But this Biblical country has much more to offer the world than this. It is home to minerals, copper, uranium, gold, fruits, vegetables, and high-value crops like pomegranates. It also has the largest amount of marble in the world.
In the issue of marble, the Pakistanis are quarrying the marble in a way that is unusable by western companies interested in using it for construction.
McCampbell said technical assistance is needed for quarries to show them how to make it properly and in high-volume ways to get a good return for their money.
Negotiating and setting up trade agreements with countries near its borders is going to be a vital next step for Afghanistan. Trade talks between Afghanistan and Pakistan right now are a bit contentious. Pakistan has become accustomed to exporting almost all that Afghanistan needs to the Afghanistan, so if Afghanistan starts become self-sufficient and even exporting, it threatens their economy. Because Afghanistan has 80 billion liters of water flowing through it, and with 60 billion going to other countries, it could have the upper hand in future trade agreements using that as a negotiating tool.
“As they are able to trade with each other, it’s going to be safer for everybody,” McCampbell said.
The Karzai Government is also attempting to crackdown on corruption. After the London Conference on Afghanistan earlier this year, they created an oversight committee to look into the drug trade and connection to government corruption. Karzai’s brother is heavily involved with the drug cartel in the south, and no prosecutions have been made so far.
McCampbell said she hopes it is a genuine effort, and it could be thanks to very dedicated ministers put on the committee, but also worries it may be too little too late.
“He is looking to them to help him see his way through this corruption maze, because if there isn’t something done about the corruption, nothing else is going to make a difference. It will completely undermine all of our efforts.”
In addition, there is a lot of money that is being poured into Afghanistan, but a lot of it is illicit.
A recent poll conducted, out of 677 Afghans half admitted they had given a bribe in the last year. The average bribe being 152 dollars. If that is true for all Afghanistan, it would equal $2.5 billion in bribes per year –a quarter of the GDP and equal to what is gained from the opium production.
“It’s a way of life, and in many countries,” McCampbell said. “No country escapes it, but we have to be willing to get in there, set up businesses, teach them how to run the businesses, how to read contracts, how to get produce to market, show them what the world demand is for their product. There are so many ways to give technical assistances to people who want to help themselves and, trust me, Afghans do not want handouts, they are truly entrepreneurial people.”
On each visit to Afghanistan, McCampbell has seen more interest from women entrepreneurs who want to start their own business and help their country move forward. Since 2002, micro-loans have been available for women living in villages to start a small business or project, but there isn’t a lot of funding available for women who want to do something larger than that in small or medium size enterprises.
“They want to do something more than at the village level, which is a force multiplier — if you help a woman start a factory, she’s able to hire 40 or 50 other women,” McCampbell said.
In general, Afghanistan must work to make itself more open and friendly to foreign investors, and in some ways, they have already started to do this. President Hamid Karzai and his government have passed and implemented a number of laws that are business friendly. It is now easier to get business licenses; the tax system is not as erroneous, foreign investors can lease land longer and can take their profits out of the country.
What is still lacking is information to the private sector, not just to the American private sector but all of the NATO contributing nation capitals, need to dispense information to their general public about the opportunities available.
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