Impact of Small Scale Industries on Afghanistan's Economy

Abstract

Industries and small scale industries in particular play a crucial role in the economic development of a country. This study which is based on secondary data was conducted to know the true impact of small scale industries on Afghanistan's economy. Throughout the history, the country has experienced many pages of downs and ups in terms of industrial revolution where many empires took actions in regard with industries and they have taken some steps in this regard and have been able to make Afghanistan a great and popular land in the region as being a land of industries. Especially in the era of Ghaznawian (10th – 12th centuries), the country witnessed great success in terms of industries e.g. in the areas of textiles, architectures, lithograph, tiles and so on. In the 18th century when the British Empire came to occupy Afghanistan, it lost many opportunities and the country took a backward turn. In the 19th century developmental steps were taken and industrial houses were made. Gradually they moved to the 20th century and some positive actions were taken, but due to political conflicts they again came to a halt. Till 2002 there were not much of development actions in terms of industries. As the study shows, it was only after 2002 that the government of Afghanistan made some special plans to develop industries. People started to work in small scale sectors like silk, felt, rug, wooden furniture etc. and create economic value for their country. Small scale industries contribute a lot to the economy of any country. It is a source of income and employment for people. The rural people are engaged with the sector and work independently. According to a survey, 70 per cent of the people consider the impact of the sector as positive, and more than 50 per cent say that the sector helps to eliminate poverty and bring economic development. Apart from all the positive impacts of small scale industries to the economy, the study shows that it faces many problems which need to be solved. The problems of lack of capital, infrastructure, organization, lack of skilled labor, security and strategic marketing are major impediments in the way of small scale industries in Afghanistan.