The Economy of Afghanistan (An Overview of Opportunities and Risks of Doing Business in Afghanistan)

Abstract

Afghanistan entered into a new era of its history after the falling of the Taliban in 2001. Since that time, the process of state building, reconstruction and reforms has been going on. In economic aspects, some noteworthy development has been initiated. Despite all the problems and difficulties of business activities, investors (both Afghans and foreigners) have invested in different aspects. Considering these facts, we will focus in this paper on the opportunities and risks exist for doing business in Afghanistan. First I will briefly talk about major characteristic of Afghanistan’s economy. In this section, I will try to outline the newest updates about economy of Afghanistan. Although, lack of adequate and accurate statistics is a major problem in Afghanistan, I will rely on the recent available data and statistics from Afghanistan governments and international institutions like World Bank and IMF. In the second part, the business environment will be discussed. The focus will be on opportunities as well as the challenges which exist toward doing business in Afghanistan. Talking about opportunities, one should distinguish between opportunities for national and/or foreign investors and firms for doing business in Afghanistan and opportunities that exists for economic growth in Afghanistan. Considering this distinction and as far as it is related to first type opportunities, I will also talk about the opportunities and potentials of economic growth in Afghanistan. Finally, I will touch on legal and institutional frameworks for doing business in Afghanistan; the last reforms and the needs for change, if any. At the end, considering all the facts and discussed issues, I will come up with suggestions and conclusion about business opportunities and risks in Afghanistan.