Background

From Aid to
Development

Private Sector’s Role

in Development

Afghan Government
Institutions
Legal and Regulatory
Business and Investment in
Environment
Afghanistan
Trade and Transit

Trade Conferences
and Missions
Chambers of
Commerce
Mariam A. Nawabi
Commercial and Trade Counsel
Government Reforms
(202) 234-3810
Positive Economic nawabi@embassyofafghanistan.org
Developments
Major Achievements

Reasons to Invest

The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008

Background

From Aid to
Development
Background
Private Sector’s Role
in Development 25 million population
Size of Texas
Afghan Government Varied climate
Institutions Rich in natural resources
Legal and Regulatory Crossroads of trade and culture in Asia
Environment Large populations of Afghan expatriates in U.S,
Europe, Pakistan and Iran
Trade and Transit

Trade Conferences
and Missions
Principal Markets and Trading
Chambers of Partners
Commerce
- Pakistan
Government Reforms
- Korea
Positive Economic
- India
Developments
Major Achievements - Germany
- UAE
Reasons to Invest
- Japan
- United States
The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008
Background

From Aid to
Development

From Humanitarian Aid to Economic Development

Private Sector’s Role
in Development
• $4.5 billion pledged at the January 2002 Tokyo
Donors Conference for 5 years, mostly spent on
Afghan Government
emergency assistance
Institutions
Legal and Regulatory
• $8.2 billion pledged at the March 2004 Berlin
Environment Donors Conference
Trade and Transit
• Goal of Afghan Government is to leverage donor
Trade Conferences aid on trade, investment and the promotion of
and Missions private sector
Chambers of
Commerce • Lending facilities and guarantee facilities a
Government Reforms
priority
Positive Economic
• Capacity building of local private sector
Developments
Major Achievements
• Government has expressed its intent on being a
Reasons to Invest
policy maker and manager, not an implementer,
of projects.

The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008

Background

From Aid to
Development
Private Sector’s
Private Sector’s Role
in Development • RoleSector is engine for growth and sustainable development
Private

Afghan Government
• Business can have a significant impact on the development of
Institutions
Afghanistan
Legal and Regulatory
• The most important role of business in post-conflict Afghanistan is that of
Environment an investor
Trade and Transit • Business investment provides the jobs, the economic development and
Trade Conferences
the hope allowing Afghanistan to break out of the circle of conflict and
poverty
and Missions
Chambers of
Commerce
• Partnerships with local companies are vital to long-term success and
growth
Government Reforms
• With the growth of business and economic activity, Afghans can gradually
Positive Economic sustain themselves and need for humanitarian aid will be reduced
Developments
Major Achievements • It can move the country from assistance dependency to sustainable
development.
Reasons to Invest

The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008

Background

From Aid to
Development

Private Sector’s Role

Afghan Government
in Development
Institutions
Ministry of Commerce
www.commerce.gov.af
Afghan Government
Ministry of Finance
Institutions www.mof.gov.af
Legal and Regulatory
Environment Central Bank

Trade and Transit Afghan Investment Support Agency (AISA)

www.aisa.org.af
Trade Conferences
and Missions Afghanistan Reconstruction Development Service (ARDS)
Chambers of
http://www.afghanistangov.org/aaca/procurement/
Commerce

Government Reforms Guiding Documents

Positive Economic New Constitution http://www.constitution-afg.com/resrouces/Draft.Constitution.pdf
Developments
National Development Framework
Major Achievements
Budget (www.af)
Reasons to Invest Securing Afghanistan’s Future (www.afghanistangov.org/recosting)
2004 World Bank Country Economic Report
The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008
Background

From Aid to
Development
Legal and Regulatory Environment
Private Sector’s Role
in Development Commercial Code of 1955

Civil Code of 1976

Afghan Government
Institutions Central Bank Law
Legal and Regulatory
Environment
Commercial Banking Law of 2003
• Issuance of banking licenses in Sept. 2003. Five foreign banks
operational (Standard Chartered, Afghanistan International Bank, National Bank of
Trade and Transit
Pakistan, Habib Bank, Punjab Bank)
Trade Conferences
Law on Domestic and Foreign Private Investment of 2002
and Missions • Liberal, 100% foreign ownership, most areas open, protection from expropriation.
Chambers of
Commerce Foreign Entity Recognition
• Registration, not reincorporation
Government Reforms
Corporation and Partnership Law
Positive Economic
• Part of existing Commercial and Civil Codes. Reforms to these provisions underway.
Developments
Major Achievements Arbitration
• Arbitration between parties is recognized by existing Commercial Code. Foreign
investment law allows for arbitration.
Reasons to Invest
Land Titling and Property
• USAID has funded a project that would improve land titling and registration system.

The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008

Background

From Aid to
Development Trade and Transit Agreements
Private Sector’s Role Trade and Investment Framework Agreement
in Development • United States

Transit Agreements
Afghan Government
• Iran
Institutions • India
Legal and Regulatory • Pakistan
Environment • Uzbekistan
• Turkey
Trade and Transit
Trade Agreements
Trade Conferences • Iran
and Missions • India
Chambers of
Commerce
Trade Preference and Concessionary Agreements
• USA
Government Reforms • India
• Canada
Positive Economic
• Japan
Developments • EU
Major Achievements • Iran

Memoranda of Understanding
Reasons to Invest
• England
• Germany
• Iran (Chabahar)
The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008
Background

From Aid to
Development
Trade Conferences and Missions
Private Sector’s Role
in Development

US Trade and Business Mission

Afghan Government
Institutions
Berlin Conference
Legal and Regulatory
Environment
Economic Cooperation Organization
Trade and Transit

Trade Conferences Afghanistan Development Forum

and Missions
Chambers of
Commerce
Asian Development Bank Annual Meeting

Government Reforms
2nd US Trade and Business Mission
Positive Economic
Developments
Major Achievements
International Business Exhibition

Reasons to Invest Upcoming U.S. Dept. of Commerce Mission

The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008

Background

From Aid to
Development

Chambers of Commerce and Industry

Private Sector’s Role
in Development

Afghan Government Afghanistan Chamber of Commerce & Industries

Institutions Contact: acci2002@hotmail.com
Legal and Regulatory
Environment The Afghanistan Traders & Industrialists Center
Contact: matsa@asia.com
Trade and Transit
Afghanistan International Chamber of Commerce
Trade Conferences
Contact: atiqpanjshiri@yahoo.com
and Missions
Chambers of Afghan-American Chamber of Commerce
Commerce
Contact: www.a-acc.com
Government Reforms
Afghan Chamber of Commerce
Positive Economic
Contact: www.afghanchamber.com
Developments
Major Achievements Local chambers in most major cities in
Afghanistan: Herat, Mazar-e-Sharif, Kandahar
Reasons to Invest

The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008

Background

From Aid to
Development

Private Sector’s Role

Government Reforms
in Development
• Principles of a free market economy in the new Constitution
Afghan Government
• Growth of the private sector is a high priority
Institutions
Legal and Regulatory • Focus on removing obstacles to private sector development
Environment
• New government agencies that provide foundation to investment
Trade and Transit
 AISA: Afghan Investment Support Agency
Trade Conferences
“One Stop Shop for All Investors”: registration, licensing, promotion of new
and Missions investments
Chambers of
Commerce
 ARDS: Afghanistan Reconstruction and Development Service
Procurement of Afghan Government funded projects using internationally
Government Reforms
recognized procurement regulations
Positive Economic
Developments
Major Achievements
• Ministries of Commerce and Finance, the ministries with primary
responsibility in this area, have enacted reforms to reduce
Reasons to Invest
bureaucracy.

The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008

Background

From Aid to
Development

Private Sector’s Role

Government Reforms
in Development (cont)
• A major part of the reconstruction plan has been connecting
Afghan Government
the nation to neighboring countries to make it a key transit
Institutions
Legal and Regulatory point in the region.
Environment
• Plans to privatize state-owned enterprises and industries
Trade and Transit

Trade Conferences
and Missions • Working with USAID to establish 3 new industrial parks
Chambers of  Water, power, electric
Commerce

Government Reforms
• Creating and enforcing international standards: National
Positive Economic
Developments
Bureau of Standards and Norms, Ministry of Commerce
Major Achievements

• Entrepreneurship Development Office for Afghan Women

Reasons to Invest
 Afghan Women’s Business Association
 Training Programs; Exhibitions
The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008
Background

From Aid to
Development
Positive Economic Developments
Private Sector’s Role
in Development
• Rapid economic growth over the past three years.
Afghan Government
 30% growth in 2002
Institutions
 23% growth in 2003
Legal and Regulatory
 Baseline is low, but given the destruction of infrastructure and institutions,
remarkable
Environment
• Many international institutions involved in the reconstruction process
Trade and Transit

Trade Conferences
• Foreign direct investment increasing
and Missions
• USAID, World Bank, ADB and other institutions offer contracting
Chambers of
Commerce
opportunities for US companies
Government Reforms • Loans for investments available through the IFC and OPIC
Positive Economic
• Political risk insurance available through OPIC and MIGA
Developments
Major Achievements • First venture capital fund was announced this year, Afghanistan Capital
Partners
Reasons to Invest
• Strong local interest in business and trade
 AICC elections
The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008
Background

From Aid to
Development

Private Sector’s Role

in Development
Major Achievements
New Currency
Afghan Government •1 USD = 47 Afs
Institutions
Legal and Regulatory Banking Reform and
Environment Licensing

Trade and Transit Infrastructure Improvements

• Roads
Trade Conferences
• Communications
and Missions • Electricity
Chambers of • Transit
Commerce

Government Reforms
Bilateral Trade and Transit
Agreements
Positive Economic
Developments
Trade Preference and
Major Achievements
Concessionary Agreements

Reasons to Invest Institutional Reform

The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008

Background

From Aid to
Development

Private Sector’s Role Reasons to Invest in Afghanistan

in Development

• One of the lowest custom tariffs in the region

Afghan Government
Institutions • Low tax rates
Legal and Regulatory
• Freely exchangeable currency with remarkable stability ($1 for 47
Environment
Afghanis)
Trade and Transit

Trade Conferences
• Liberal investment law in 2002 that allows 100% foreign ownership, full
and Missions transferability of profits outside the country
Chambers of
Commerce • Mineral resources, agricultural raw materials abundant
Government Reforms • Location of Afghanistan: gateway to investment in Central Asia, a
Positive Economic
market of 150 million
Developments
Major Achievements • Your investment is not only a business venture, but also an investment
in regional and world stability
Reasons to Invest

The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008

Background

From Aid to
Development Business and Investment
Private Sector’s Role •Opportunities
Agriculture
in Development • Architectural, construction and
engineering services
• Business Services
Afghan Government • Civil Aviation
Institutions • Consulting
Legal and Regulatory • Construction Materials
Environment
• Consumer Goods
• Education services
Trade and Transit
• Energy
 Power generation and transmission
 Oil and gas exploration
Trade Conferences
• Equipment and machinery sales and leasing
and Missions • Food processing and packaging
Chambers of • Irrigation technology
Commerce • Leather and leather processing
• Manufacturing
Government Reforms
• Marble and other industrial stones
Positive Economic • Mining
Developments • Precious and semi-precious stones
Major Achievements
• Telecommunications
• Textiles and carpets
• Transportation
Reasons to Invest • Water Supply
• Waste Treatment

The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008

Background

From Aid to
Development Recent Private Investments
Private Sector’s Role Afghan Wireless
in Development •TSI (NJ); $150 million
Roshan Wireless
Afghan Government •Alcatel and Aga Khan
Institutions
Hyatt Hotel
Legal and Regulatory • Afghanistan Reconstruction Company (NY) and OPIC; $40 million
Environment
Kabul Serena
• IFC and Aga Khan; $27 million
Trade and Transit
Coca-Cola Bottling Plant
Trade Conferences • Habib Gulzar International (Afghan); $25 million
and Missions
Olive Factory
Chambers of • Jalalabad
Commerce
Electronic Plant
Government Reforms • Herat
Positive Economic Swiss Skies
•Berkeley Aviation (MD); $10 million
Developments
Major Achievements GroupSat
•Unisource (AZ); $38 million
Reasons to Invest Kabul Business Center
Intercontinental Five Star Hotel

The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008

Background

From Aid to
Development Funding and Insurance Sources
Private Sector’s Role • Afghan Government www.af
in Development  National Development Budget www.af/mof/budget/
 ARDS www.af/aaca/procurement

Afghan Government • Multilateral Institutions

 World Bank www.worldbank.org
Institutions
 Asian Development Bank www.adb.org
Legal and Regulatory
 United Nations www.devbusiness.com
Environment
 International Finance Corporation www.ifc.org
Trade and Transit  Multilateral Investment Guarantee Agency www.miga.org
Trade Conferences • US Government
and Missions  Agency for International Development www.usaid.gov
Chambers of  Overseas Private Investment Corporation www.opic.gov
Commerce
 State Department www.state.gov
Government Reforms
 Department of Defense www.defenselink.mil

Positive Economic • Other Government Funding

 DFID (UK) www.dfid.gov.uk
Developments
 CIDA (Canada) www.acdi-cida.gc.ca
Major Achievements
• Nonprofit Organizations
Reasons to Invest
• Foundations
• Venture Capital
• Private Sector
The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008
Background

From Aid to
Development

Private Sector’s Role

in Development
Challenges
• Security
Afghan Government
• Narcotics
Institutions
Legal and Regulatory
• Administrative Capacity
Environment • Lack of information
• Logistics
Trade and Transit
• Corruption
Trade Conferences
and Missions
Chambers of Overcoming Challenges
Commerce

Government Reforms • Planning

Positive Economic • Patience
Developments
• Creativity
Major Achievements
• Local partnerships
Reasons to Invest • Long-term vision

The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008

Background

From Aid to
Development

Private Sector’s Role

in Development

Afghan Government
Institutions
Legal and Regulatory
Environment

Trade and Transit

Trade Conferences
and Missions
Chambers of
Thank You
Commerce

Government Reforms

Positive Economic
Developments
Major Achievements

Reasons to Invest

The Embassy of Afghanistan • 2341 Wyoming Ave., NW • Washington, DC 20008