Economy

Overview

Afghanistan remains extremely poor, landlocked and highly dependent on foreign aid, farming and trade with neighboring countries. The current standards of living are among the lowest in the world. Much of the population suffers from the shortage of the housing, drinking water, electricity, health care and employment. If the current level of donor interest and international development agencies continues their could be some optimism in the improvement of economy. Drug trade and opium cultivation account of 1/3 of the GDP and remains a major challenges for the state, the foreign troops and UN agencies.

Economy Data

• GDP – 21.5 billion USD (2003 est.)
• GDP growth rate 7.5 % (2004 est.)
• GDP – per capita 800 USD (2003 est.)
• GDP composition
  • Agriculture 60 %
  • Industry 20 %
  • Services 20 %
• Labor force by occupation
  • Agriculture 80 %
  • Industry 10 %
  • Services 10 %
• Population below poverty line 53 %
• Inflation rate 10.3 % (2003 est.)
• Budget revenue 300 US Dollars expenditure 609 US Dollars (2004 est.)
• Agriculture – products Opium wheat, fruits, nuts, wool, mutton skin or carpets.
• Industries small scale textile, soap, furniture, shoes, carpets, natural gas, gem stones and copper.
• Electricity products 540 million kwh (2002 est.) consumption 652.2 million kwh. Imports 150 million kwh.
• Natural gas productions 220 million cum (2001 est.) proven reserves 49.98.
• Exports partners Pakistan 24 %, India 21 %, US 92.4 %, Germany 5.5 %.
• Import partners Pakistan 25 %, US 8.5 %, Germany 6.5 %, Turkmenistan 5.3 %, Kenya 4.7 %, South Korea 4.2 %, Russia 4.2 %.
• Debt external 8 billion mostly Russia (2004 est.) 500 million banks.
• Economic aid 8.9 billion US Dollars pledged by donor countries in March 2004 at Berlin.

Brief History

When Afghanistan began to plan the development of its economy with Soviet assistance in the mid 1950s, it lacked not only the necessary social organization and institutions for modern economic activities but also the managerial and technical skills. The country was at a much lower stage of economic development than most of its neighbours. Between 1956 and 1979, however, the country’s economic growth was guided by several five-year and seven-year plans and was aided by extensive foreign assistance. This aid, primarily from the Soviet Union and the United States, accounted for more than four-fifths of government investment and development expenditures during that period. Roads, dams, power plants, and factories were constructed, irrigation projects carried out, and education broadened. When foreign assistance declined in the 1970s, the sale of natural gas to the Soviet Union, albeit at a bargain price, more than compensated in financing budget expenditures.

The Soviet legacy

The Soviet invasion of Afghanistan in 1979 and the subsequent civil war severely disrupted the country’s economic development. Agricultural production declined, food shortages were reported, and industrial output stagnated—with the exception of natural gas production and some other industries considered essential by the Soviet Union. The private sector during the Soviet period encompassed primarily agriculture and livestock breeding. There formerly had been a mixed pattern of small, medium, and large landholdings, but this system underwent drastic change, particularly after 1978. The bulk of the trade and transport as well as most manufacturing were in the hands of private entrepreneurs until the late 1970s, when these sectors of the economy were nationalized. Public enterprise was confined to foreign trade, mining, and some industries.

A balanced budget was achieved with revenue derived principally from the sale of natural gas and from foreign loans and grants. Expenditures were mainly for government ministries, the developmental budget, and interest on foreign debt. The socialist government was committed to developing a mixed, guided economy. In practice, however, the effectiveness of this policy was limited by a paucity of government resources, a cumbersome bureaucracy, and a shortage in technical personnel.

Economic collapse

However low the Afghan economy had sunk during the period of communist rule, it was to decline even more under subsequent mujahideen and Taliban governments. After more than two decades of war, and in the face of the Taliban’s harsh social policies, few educated Afghans with even rudimentary technical skills remained in the country. In effect, any remains of a modern economy—at least a formal, legal one—largely collapsed during the 1990s. Public and private investment in productive enterprises was rare. Foreign aid agencies and groups, governmental and nongovernmental, provided what few services were available, but these met only basic humanitarian needs.

During the 1990s economic activity flourished mostly in illicit enterprises, such as growing opium poppies for heroin production and smuggling goods. The taxing of Afghan-Pakistani trade contributed much revenue to the Taliban’s war chest. As the Taliban’s prime source of income, it overshadowed the taxing of opium trafficking. But that part of trade—encompassing a massive smuggling of duty-free goods—had crippled local industry and revenue collections and created temporary food shortages, inflation, and increased corruption in Afghanistan and neighbouring countries. Poppy cultivation was the major source of income for farmers, but they shared little in its full profits. However, the drug economy did provide essential revenues that enabled the Taliban to pursue its war effort. By the late 1990s Afghanistan had become the world’s largest producer of opium and was thought to be the main source of heroin exported to Europe, North America, and elsewhere. Although the Taliban successfully banned the growing of opium poppies in 2000, drug trafficking continued due to large reserves of opium warehoused in the country, and it was not until that regime’s collapse that an interim government attempted systematically to eradicate the narcotics trade.

Most of the population continues to be engaged in agriculture, though the destruction caused by war has been a force for urbanization by driving many from the countryside. Many Afghans brought up in refugee camps lack the farming skills they need to survive, and the country’s agricultural sector is in great need of restoration, particularly its destroyed and degraded irrigation system. The road system is similarly damaged, and domestic energy sources need to be developed for both export income and domestic use.

The economy » Agriculture and forestry

Agriculture and animal husbandry, mainly consisting of subsistence farming and pastoral nomadism, are, in more normal times, the most important elements of the gross domestic product (GDP), accounting for nearly half of its total value. Afghanistan is essentially a pastoral country. Only about one-eighth of the total land area is arable, and only about half of the arable acreage is cultivated annually. Much of the arable area consists of fallow cultivated land or steppes and mountains that serve as pastureland. Since much of the land is arid or semiarid, about half of the cultivated land is irrigated. Traditionally, as much as 85 percent of the population drew its livelihood from a rural economy, mostly as farmers.

The greater profits found in the illegal market for drugs and the smuggling trade have cut heavily into traditional agriculture and food production. Afghanistan now has to import much of its foodstuffs from Pakistan. Prior to the period when poppy growing became widespread, most cultivated land was planted with cereals, with wheat as the chief crop. Other food grains customarily planted were corn (maize), rice, and barley. Cotton was also important, both for a domestic textile industry—when such an industry existed—and for export. Fruits and nuts have also been important export items.

Animal husbandry produces meat and dairy products for local consumption; skins, especially those of the famous karakul, and wool (both for export and for domestic carpet weaving) are also important products. Livestock includes sheep, cattle, goats, donkeys, horses, camels, buffalo, and mules. About two-thirds of the annual milk production is from cows, the rest from sheep and goats. In addition to the country’s many other difficulties, a drought in 2000 killed off some four-fifths of the livestock in southern Afghanistan and crippled the remaining food production.

Forests cover about 3 percent of the total land area and are found mainly in the eastern part of the country and on the southern slopes of the Hindu Kush. Woodlands in the east consist mainly of conifers, providing timber for the building industry as well as some wild nuts for export. Other trees, especially oaks, are used as fuel. North of the Hindu Kush are pistachio trees, the nuts of which are a traditional export. Deforestation has become a major problem, as much of the country’s timber has been harvested for fuel—because of shortages brought on by 20 years of warfare—and for illegal export.

The economy » Resources and power

Extensive surveys have revealed the existence of a number of minerals of economic importance. The most significant discovery has been natural gas deposits, with large reserves near Sheberghan near the Turkmenistan border, about 75 miles (120 km) west of Mazar-e Sharif. The Khvajeh Gugerdak and Yatim Taq fields were major producers, with storage and refining facilities. Until the 1990s, pipelines delivered natural gas to Uzbekistan and Tajikistan and to a thermal power plant and chemical fertilizer plant in Mazar-e Sharif.

Petroleum resources have proved to be insignificant. Many coal deposits have been found in the northern slopes of the Hindu Kush. Major coal fields are at Madan-e Karkar and Eshposhteh, between Kabul and Mazar-e Sharif, and Qaleh-ye Sarkari, southwest of Mazār-e Sharīf. In general, however, Afghanistan’s energy resources, including its large reserves of natural gas, remain untapped, and fuel shortages are chronic.

High-grade iron ore has been discovered at Ḥajji Gak, northwest of Kabul. Copper has been mined at Aynak, near Kabul, and uranium in the mountains near Khvajah Rawash, east of Kabul. There are deposits of copper, lead, and zinc near Kondoz; beryllium in Khas Konar; chrome ore in the Lowgar River valley near Herat; and the semiprecious stone lapis lazuli in Badakhshan. Afghanistan also has deposits of rock salt, beryl, barite, fluorspar, bauxite, lithium, tantalum, gold, silver, asbestos, mica, and sulfur. Taxation of mined and traded lapis lazuli and emeralds helped finance anti-Taliban forces during the civil war.

The development of Central Asian natural gas and oil resources has sparked international interest in Afghanistan as a route for pipelines to markets in South Asia and beyond. If built, a pipeline could carry gas and, later, oil from Turkmenistan over some 1,100 miles (1,750 km), mostly through Afghanistan, to Multan in Pakistan for transshipment. Such a pipeline could become a major source of income for Afghanistan and also offer a source of training and employment to Afghans.

Afghanistan is potentially rich in hydroelectric resources. However, the seasonal flow of the country’s many streams and waterfalls—torrential in spring, when the snow melts in the mountains, but negligible in summer—necessitates the costly construction of dams and reservoirs in remote areas. The country’s negligible demand for electricity renders such projects unprofitable except near large cities or industrial centres. The potential of hydroelectricity has been tapped substantially only in the Kabul-Jalalabad region.

The economy » Manufacturing

In peaceful times, manufacturing is based mainly on agricultural and pastoral raw materials. Most important is the cotton textile industry. The country also produces rayon and acetate fibres. Other manufactured products are cement, sugar, vegetable oil, furniture, soap, shoes, and woolen textiles. A nitrogenous fertilizer plant, based on natural gas, has been constructed in Mazar-e Sharif, and phosphate fertilizers are also produced. A cement factory continues to operate in Pol-e Khomri. In addition, a number of traditional handicrafts are practiced in Afghanistan, including carpet weaving, which in times past accounted for a fair proportion of the country’s export earnings.

The economy » Finance

The largest bank in the country, the Bank of Afghanistan, became the centre of the formal banking system. It formerly played an important role in determining and implementing the country’s financial policies. Traditionally, private money traders provide nearly all the services of a commercial bank. The currency, the afghani, underwent rampant inflation beginning in the 1990s, and as a result precious metals and gems became a common form of currency for large transactions. A sanction imposed in 1999 by the United Nations (UN) against the Taliban government froze government accounts abroad and closed the few branches of Afghan banks outside the country. Despite these measures, the Taliban and their al-Qaeda supporters (al-Qaeda is an Islamic extremist group that found refuge under the Taliban) removed large quantities of bullion and currency from Afghanistan during the U.S. military campaign of 2001, virtually bankrupting the country. Thus, it became imperative that the post-Taliban regime establish a functioning banking and monetary system with a sound new currency as a major component of national reconstruction.

The economy » Trade

Total annual imports have customarily exceeded exports. Prior to the fall of Afghanistan’s communist regime, roughly two-thirds of exports went to the former Soviet republics to the north, and much of the rest went to the United Kingdom and Germany. The Soviet state was also the leading source of imports, followed by Japan, Singapore, China, and India. The principal export, natural gas, flowed mostly to the Soviet Union until pipelines were closed. Traditional exports are dried fruits, nuts, carpets, wool, and karakul pelts, and imports include vehicles, petroleum products, sugar, textiles, processed animal and vegetable oils, and tea. Since the mid 1990s Pakistan and Iran have served as the major suppliers of consumer goods.

The economy » Services

Until the collapse of the communist regime in 1992, the service sector—including public administration, military spending, and retail sales—accounted for less than one-fourth of GDP. Although there have been no official statistics since then, government spending fell sharply over the decade, and, like other segments of the economy, retail sales suffered from the country’s general economic malaise. Purchasing power in the post-Taliban period began to recover with the revival of government programs that were funded mainly by international donors.

The economy » Labour and taxation

The bulk of the population in the rural areas consists of small farmers exploiting their tiny plots of land. The majority of the city and town dwellers are artisans, small traders, or government employees. The industrial labour force, always small, is now hardly visible, and labour unions have failed to develop. Traditional loyalties to families and tribes are stronger than those to workers’ organizations.

The Afghan government has traditionally received much of its revenue from foreign aid—particularly during the Soviet era—and as a consequence the Afghan people have generally been lightly taxed. Taxation during the mujahideen and Taliban period often took the form of levies placed on the illicit cross-border trade between Pakistan and other countries, on cultivating opium poppies and manufacturing heroin, and on extracting and exporting semiprecious stones. Following the defeat of the Taliban in 2001, the interim government relied largely on foreign aid and subsidies from donor nations.

The economy » Transportation and telecommunications

Being a landlocked country, Afghanistan depends primarily on transit facilities from its neighbours for its international trade. It lacks railways, has few navigable rivers, and relies on roads as the mainstay of its transport system. These factors drive up transportation costs and also add to the difficulty of integrating the transport system of the country with those of its neighbours. Nevertheless, in the 1960s major efforts were directed toward upgrading the highway system and connecting the main trading centres of the country with one another, as well as with the railheads or road networks of neighbouring countries.

The road network of Afghanistan connects railheads in Gushgy, Turkmenistan, and Termiz, Uzbekistan, with those at Chaman and Peshawar, Pakistan, respectively, and provides for direct overland transit between the countries to the north and the Indo-Pakistani subcontinent. The most important Afghan highways are those connecting Kabul with Shir Khan, on the northern border, and with Peshawar. Other paved roads link Kandahar, Herat, and Mazar-e Sharif with Kabul and with frontier towns of Pakistan, Iran, Turkmenistan, and Uzbekistan. During the civil war, however, the road system was severely damaged from the fighting and from disrepair. Its rehabilitation has become a high priority in any program of national reconstruction.

Despite the rapid development of motor transport, camels and donkeys are still commonly used as draft animals. In the countryside many people have not abandoned their cherished horses, which are an important source of prestige.

Almost all provincial centres have at least a seasonally operable airport. There are international airports at Kabul and Kandahar. Afghanistan, however, has limited air service and only one airline, the national carrier, Ariana Afghan Airlines. UN restrictions imposed in 1999 and again in 2001, aimed at punishing the Taliban government for its alleged support of international terrorism, limited international routes for Ariana and prohibited other airlines from scheduling flights into the country.

Afghanistan’s communications infrastructure is one of the least developed in the world. Telephone service is sparse, with only one main telephone line per thousand persons. As of 2002 there was no cellular telephone or Internet service in any part of the country. Radio receivers are fairly pervasive, with roughly one radio receiver per 10 people. Afghans who have access to shortwave radio listen to international broadcasts—including the Voice of America’s Dari and Pashto programs and the BBC Pashto Service—which are primary sources of information. The number of televisions per capita is only one per hundred residents. Wealthy Afghans have satellite dishes and are able to receive foreign broadcasts; domestic television reception is limited to Kabul.

SEED AND CROP IMPROVEMENT SITUATION ASSESSMENT IN AFGHANISTAN

X. A MARKET ECONOMY-THE BASIC NEED

X.1. CURRENT SITUATION

Afghanistan has a population variously reported at 24 to 26 million. Poverty and poor nutrition, even to malnutrition, are reported by WFP and other agencies as common in rural areas. Many farm families are unable to purchase seed and fertilizers to improve their production. The majority of the rural population is, relatively speaking, low-income and at poverty levels.
Land holdings are small, with little chance of increasing the cultivable area operated by the average family. Many are unable to produce their basic food needs, and depend on outside, often seasonal, employment or other sources of income to sustain themselves. With the current economic situation, adequate employment within the country does not exist.
In the last reported/estimated year, GDP was estimated at $300 per capita. No figures on personal or family income were available, but the average rural income (and some 80% of the population is rural) is clearly below the level considered necessary to maintain a healthy life.

X.2. FAMILY FOOD AND LAND REQUIREMENTS

Bread is the basic foodstuff of Afghanistan. Reportedly, per capita consumption of wheat is 180 kg per year. Thus, one ton of wheat would feed 5.6 persons per year. For a population of 25 million (a median figure of the population estimates), total national wheat requirement (completely aside from other nutritional requirements) would be some 4.5 million tons of wheat per year, assuming no waste.
At the best recently-reported annual production (1999), total national wheat production was 2.5 million tons, or slightly over half (56%) of today's minimal needs. During the recent drought, production has been down significantly from this level.
Rural families reportedly average about 7 children, for a family size of 9 persons. Each family would thus require 1.62 mt of wheat per year. Average irrigated wheat yield was reported to be 1.13 mt/ha. Thus, each family would thus require 1.44 ha of irrigated land for wheat alone, simply to satisfy family needs for wheat. Again, this assumes average crop yields, no loss to locusts, aphids, diseases, etc., in the field, or to rats or insects in storage.
Reportedly some 1,200,000 ha of land have been devoted annually to wheat production in the last few years. At reported yield levels of 1.13 mt/ha, this is a production potential of 1,356,000 mt.
Typical rural family land holdings available for wheat production are reportedly 3 jeribs (2 jeribs = approx. 1 acre, 5 jeribs = approx. 1 ha). At 5 jeribs/ha, the family's land to provide its own food needs would be 7.2 jeribs for wheat, plus the land required to produce other foodstuffs and livestock feed.
On a national basis, at 0.16 ha per capita to produce the needed wheat, some 4,00,000 ha would be needed for a present population of 25,000,000. The total land area devoted to cereal production (wheat, rice, maize, barley) in 2000 (a drought year) was 2.38 million ha, and 2.77 million ha in 1998.
Total wheat production required (at 180 kg/year/person) would be 4,500,000 mt. Pre-war (1978-81) total cereal production was reported as 4,060,000 mt.
The additional land is clearly not available. Even if it were available, the typical family apparently does not have the means to cultivate it.
This is in addition to land needed to produce (1) other family nutritional needs and (2) production for market to earn income to purchase other family needs and food requirements.

Current production systems, cultural practices, and yield levels cannot meet the needs of the present population for either basic foodstuffs, or marketable goods adequate to generate the minimum required income and purchasing power. Further, a high rate of population growth is reported.
Clearly, a "subsistence agriculture" in which families are more-or-less self-sustaining, and can produce their own food and other needs is not possible, and is not a viable solution to Afghanistan's current critical needs.
Last available estimate of GDP (Gross Domestic Product), and the same figure for income, was $300/capita. On the basis of a family of 9 persons, this is $2,700.
In order to calculate minimum family income needs-in addition to short-term food from own-grown crops-if $10/month/capita is allowed for additional nutritional needs, farming supplies, medical/ dental, etc., or $120/year/capita, for a family of 9 persons, an additional $1,080, or less than half of per-capita GDP (potential, at this stage) would be needed.

X.4. MARKET ECONOMY

How can at least a large portion of Afghanistan's rural population earn this money to supplement the family-produced food?
A market economy, as contrasted to a subsistence agriculture as presently exists, must be created and must include at least the majority of farm families. This means that the farm family must produce for the market, or be employed in the marketing of farm and other products. This would require a major shift from present economic conditions; it must create:
        1. Earning opportunity situated so as to permit employment while still living in the village, and
        2. Either off-farm employment or on-farm production-for-market capability adequate to generate the required supplemental income.
This would require:
        1. Industrialization (such as in Taiwan) by moving factories to rural areas, so people could live at home on the farm and still work in factories, and/or
       2 Increasing farm productivity so that family food needs could be produced on less land, and then devoting the excess land area to producing a high-value, low-volume crop which could be sold to a local market outlet which would then export the crop commodity.
This would convert the existing "subsistence agriculture" into a "market agriculture", at least for the commodities produced for the market.

X.5. GENERATING INCREASED FARM FAMILY PRODUCTION INCOME
To enable rural families to produce basic family food needs plus production for the market would require:
Increased production/jerib of the basic food crops so that less land is required to produce the family food needs. This, in turn, would require general use of higher-yielding varieties, good seed, fertilizer, pesticides, etc.
Development of markets, and farmer production capability, of export-destined specialized crops which could be sold to local market outlets at prices high enough to generate the required family income from a small land area. Such crops could include high-value spices such as saffron, or labor-intensive specialized seed such as hybrid tomato or hybrid petunia.
It may also require some family planning effort, to keep population growth within some sort of stable economic relationship to the available cropland.



X.6. ESTABLISHING A MARKET ECONOMY

To establish a "market agricultural economy" which enables farm families to produce for the market, will require considerable time and effort by government to create and maintain conditions which attract production and marketing firms to Afghanistan.
It will also require setting up and maintaining the systems and facilities which train/guide farmers in producing crops suitable for market, and to maintain the marketing network which can reach many rural villages.
This is a major economic development effort in itself, and cannot be detailed within the scope and time of this effort.

X.7.MARKET POTENTIAL AND OPPORTUNITIES

Afghanistan urgently needs to find/create export markets for its commodities, to earn foreign exchange. And, agriculture is the mainstay of the Afghan economy, is the most likely area to re-establish export earnings, and involves the majority of the Afghan population (which needs increased income). But, the question is: what is there a market for, what can be sold, and what is required to produce commodities to satisfy such markets?
Before the era of conflict, Afghanistan exported agricultural commodities such as almonds. As the Afghan supply was affected during the conflict, these markets were taken over by other areas so that it would be exceedingly difficult to re-establish these markets for Afghan products.
The result is that Afghanistan should not try to go back to its position before the conflict. In this-and in other things-it must try to leap ahead and rejoin the world market at its present status.
In addition, the per-capita cultivable land has declined as the population has grown, and the minimum needed income per family from the sale of commodities has grown. There is not now enough available cropland to produce export commodities that have relatively large land requirements or low market value.
Afghanistan has climatic conditions, irrigation, and isolated small farming areas that are ideal for producing high-value, low-volume commodities such as spices (saffron, for example) and hybrid specialty flower and vegetable seed (petunia and tomato, for example).
These would require bringing in foreign companies which process and market these commodities. Afghanistan and its farmers will be the producer; an outside market must be developed, and this will require investment by the "market" agencies in Afghanistan, so they can ensure that the materials produced meet their specifications. Attracting foreign investment in Afghanistan is the only way that Afghanistan will be able to develop high-value, low-volume production for export markets.
Bringing in external investors is of significant benefit to the country: while the foreign investor must profit, the country also profits through increased employment, increased domestic family income, transfer of technology, national development, etc.
Environmental conditions alone are not enough to make Afghanistan an attractive place for foreign investment. As one investor put it, "I only have so much money to invest, and there are many places where I can invest. I will invest only in those places where there is minimum risk and maximum economic opportunity".
In addition to the environmental conditions, Afghanistan must create the social, economic, manpower, delivery, and technical conditions required to attract the investment required to establish an operating export-oriented production industry. This will include:
Good transport: It must be easy to reach the villages where production takes place, and to bring in inputs and bring out the production. Although rural roads are in generally poor condition, there are enough villages which can be reached, so this is available.
Good communication: The investor must have ready communication with the producers, to maintain current information on crop conditions and expected yields, so as to develop and prepare to supply his markets, advise on shipment instructions, etc.
Reliable transport from Afghanistan to overseas destinations: most commodities which enable high agricultural earnings from small land areas are shipped by air. Regular, rapid and safe air freight connections with major overseas hubs through which shipment can be made without delay or constraints are essential.
Plant quarantine and international phytosanitary certificates: Essential to enable free movement and marketing of seed and agricultural products. Creating this is one of the improvements included in the FHC planning.
Rapid, supportive customs clearance: most commodities such as are envisioned here are shipped quickly to meet the needs of very time-sensitive markets. The customs clearance procedures and personnel must be honest and supportive to avoid delay or constraints to immediate clearance and shipment.
Technically-trained local manpower: crop production must be supervised by persons with a high degree of technical knowledge. Local specialists must be available; if expatriate resident specialists are required, the costs become so high that the production is uneconomic. This requires domestic educational programs to train specialists who can be given short-term intensive training abroad to make them ready and able to supervise the specialized production.
Trainable, intelligent, reliable farmers and farm workers: The farmers and farm workers who do the actual technical field work do not have to be literate, but must be intelligent and trainable, and dependable to do the proper work in the proper manner. Afghanistan has such farmers and farm family laborers; they only need training and guidance.
Supportive government agricultural programs, agencies and officials: Government agricultural agencies and their officers must support and assist the operations of production for the foreign market/investor, and must not constrain, interfere or increase costs of their operations.
Social stability: Local societies must be stable and relatively free of unrest, uprisings, or labor stoppages.
Safe and reliable financial systems: The country must have adequate, rapid and safe banking and financial systems through which funds can be transferred in and out at reasonable cost and within short times.
Tax freedom: Taxing production, import of stock seed, export of produced seed, etc., increase costs to the point where investment is not economic. There should be legal guarantees of freedom from tax.
Safety of genetic materials: The parent lines of valuable hybrid seed crops are quite valuable, and are a major proprietary asset of the investing company. There must be minimum risk that the growers, government agencies, etc., will allow such genetic materials to "escape" to other entities.
Electric power: Uninterrupted electric power to operate equipment is highly desirable. However, Afghanistan's climate is such that minimal drying (most such commodities must be dried to moisture contents suitable for sealed packaging, which is 6% moisture or less) is required. If electricity outages are not excessive, small standby generators can be used.
Investment incentives: Because of competition for investment, it is most effective to offer special incentives to attract investors. Some countries have special "Investment Promotion" Laws which provide significant incentives to investors.
Domestic external seed quality control: While supporting services such as seed testing, seed health testing, certification, seed law implementation, etc., are not absolutely essential, they do minimize the "non-production" investment required, and increase the attractiveness of the country for investment.
Security: Freedom from risk or danger to personnel, equipment, facilities, crops, produced commodities and local cooperators is an absolute necessity.
Afghanistan definitely has some of these requirements; information on some others, or how soon they could be implemented, is not now available. Detailed information on these situations, for specific locations in Afghanistan, is not known. This would require a trip to Afghanistan by an appropriate specialist, combined with interviews set up by ICARDA-Kabul, to discuss with appropriate authorities what the current situation is in selected areas, and what can be done.
Some international companies, however, may need facilities such as Afghanistan has, and may be willing to make investigatory investments here as soon as stability can be achieved. To explore this, an appropriate specialist known in the US (almost all international seed companies have facilities and staff in the US) should contact potential companies, describe the situation, (including details of what Afghanistan has to offer) to them, discuss their requirements, and identify possible investigatory investors for further dealings.
Under no conditions should international/foreign companies be offered a "bonus" to make an investment in Afghanistan before Afghan conditions are ripe for such an investment. This has been tried in other countries; in most cases, the investment was made and then failed, resulting in losses for the sponsor, the investor, and the country where the investment was made. And, one failure "scares off" later investors.