Investors are concerned about the future after the international troops withdrawal
Concerns about the future of investment in Afghanistan have grown as the exact time for the withdrawal of international troops has been announced. Officials in the country’s Chambers of Commerce and Investment say that although the withdrawal of international forces is affecting the country’s economy and investment, the current lack of a common narrative at the government level has raised concerns about the future of investment in the country. According to them, about 1,500 investors left Afghanistan for Turkey in 2020 alone, and now the concern is that the situation in Afghanistan will be similar to 1992, given the “systemic and political incompetence.” Economic experts also believe that due to Afghanistan’s dependence on foreign aid, the withdrawal of international forces will damage the country’s economy, but if cooperation continues, the level of such damage will be significantly reduced. For their part, officials at the Ministry of Industry and Trade disagree with investor exit figures, stating that investors have not yet applied for a revocation of their investment license. According to these officials, investment this year has not decreased much compared to previous years, despite the spread of the coronavirus, and there is no serious concern.
The United States announced on April 15 that it would withdraw its troops from Afghanistan on September 11, 2021. NATO Member States further stated that they have joined this initiative and will leave Afghanistan together with the United States. Although the Istanbul Conference is scheduled to take place in a few days to decide on Afghanistan’s future, concerns remain about the consequences of the withdrawal of international troops. One of the serious concerns is the increase in threats against investment in the country. Officials in the Chambers of Commerce and Investment say that while the withdrawal of foreign forces will affect the country’s economy, the lack of internal narrative is “more worrying”.
Khan Jan Alakozai, an official of the country’s Chambers of Commerce and Investment, at 8 Subh on Tuesday, April 21, that currently, the investors and traders’ biggest concern is “the lack of a common narrative between the regime, the government and the international community,” He also clarified that another concern is doubts about the future economic system because according to the constitution, the country’s economic system is a “market system” and the future of this discussion is not yet clear. He added that investors and traders are not worried about the nature of the future political system, but are afraid that the situation in Afghanistan will be similar to 1992, given the current situation.
According to Mr. Alakozai, it is clear from the “inefficiency of the system and the politicians” that investment in the country has decreased and this trend has worried traders and investors. He called the situation chaotic, stating that 25% of an investor’s gross income is currently spent on securing it. He added that a factory owner has 300 employees for production, but also has to hire 100 to 150 security guards to provide security. He added that this would cost the investor more, and given the circumstances, traders believe they have no future in the country.
Mr. Alakozai said that the situation in Afghanistan is unhealthy and in addition to the lack of infrastructure and the non-implementation of laws, war and kidnapping continue significantly. According to Mr. Alakozai, not only is there no room for foreign investment, but Afghan businessmen are also investing abroad. He added that during 2020 alone, about 1,500 investors with hundreds of millions of dollars have gone abroad because they believe that there is no ground for investment. Officials in the Chamber of Commerce and Investment also state that traders are not in the loop of the peace process due to their lack of a prominent role in the peace process and the formation of the High Council for National Reconciliation. Instead, they have shared their concerns and views with the High Economic Council and some other meetings with the Presidential Palace and other institutions.
Some economists say that the withdrawal of international troops from Afghanistan in the current situation, like the withdrawal of other foreign forces in the past, is hurting the country’s economy. Saifuddin Saihoon, an economist and university professor, told 8 Subh on Tuesday that the withdrawal of foreign troops, including Russian and British troops, had caused economic damage to the country over the past 100 years as Afghanistan’s economy deteriorated. The present economy is more dependent on foreign aid, and this trend will extend the withdrawal of American troops. According to him, billions of dollars have been invested by Afghans in Turkey and India so far, and this trend will intensify if the situation worsens.
The Ministry of Industry and Trade, however, does not agree with the figures provided for the departure of investors from the country. Ministry spokesperson, Fawad Ahmadi, said no research had been carried out and that no investor had revoked their investment license. According to him, although factories in the first and second quarters of the outbreak of coronavirus had stagnated, the damage was reduced in the third and fourth quarters. Mr. Ahmadi added that currently 11 industrial parks are ready to distribute land and there are many applicants for it. Mr. Ahmadi said that if insecurity escalated, the government would do everything in its power to protect the lives and property of the people, and would make arrangements to protect the property of traders, industrialists, factories and industrial towns. He said that although he had discussions with private companies about these issues, there are no serious concerns about the future of investment in the country.
In the coming days, the Istanbul Conference will be held in the presence of the parties involved in the country and will decide on the fate of Afghanistan, and the acceleration of the peace process. Although the Taliban have not yet officially announced their decision to attend the conference, earlier sources have suggested that the conference may be delayed. It is worth mentioning that Afghan citizens, especially businessmen, are now looking forward to the outcome of this meeting.