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Afghanistan : GUIDE Area Profile

Contact :   TEL   847-304-4655

Bruce Donnelly   bruce@gdi-solutions.com    (Biography)

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Introduction

Foreign Direct Investment (FDI) and economic development in Afghanistan

The relatively peaceful and highly participatory presidential election in 2004 gave a clear mandate to President Hamid Karzai, reinforcing his efforts to rebuild and advance this country from the damage caused during decades of conflict.  The western media focus on any bad news of the day rarely highlights the progress that is being made over time.

Highlights - progress report at the first anniversary of AISA

"During the past year AISA has registered 726 investment projects amounting to $493 million of which 581 are domestic, 127 foreign and 18 joint ventures. The investment projects when operational will produce 49,586 jobs. We have additional $300 million worth of new projects in the pipeline."  See more below

The Afghan Investment Support Agency was created by a mandate from President Hamid Karzai to become a "one stop shop" for both domestic and foreign direct investment (FDI) projects in Afghanistan in support of the economic and industrial development of the country.

It receives financial and advisory support from multilateral organizations and foreign countries as the Afghan leadership works to rebuild the country, for which domestic and foreign capital investment projects are a high priority.

link to maps

Personal commentary by Bruce Donnelly of GDI Solutions

Executive Summary

Outline of topics - to be completed soon - see also GUIDE Network Survey

Contact information

Website : www.aisa.org.af

This GUIDE Area Profile remains under development and will be updated soon.

AISA was established as a public service limited liability company within the framework of Ministry of Commerce under the supervision of High Commission for Investment in Afghanistan.

Recent developments in the area include ... link to highlights of recent investment announcements (region)

Suleman Fatimie

Vice President for Investment

Afghan Investment Support Agency (AISA)

Opposite to Ministry of Foreign Affairs

Kabul, Afghanistan

 

Phone  +93(20)210 3404

Fax      +93(20)210 3402

 

email    invest@aisa.org.af

 

Alternate contacts : (background and e-mails available on the AISA website)

 

Noorullah Delawari, President & CEO

Naseem Akbar, Investment Manager

Abdul Salam Zahed, Investment Manger

M. Sharif Roshan Ahamdzai, Investment Manager

Eng. Abdul k. Safi, Investment Manager

List of available sites or facilities :

The Industrial Parks Development Authority is preparing for the development of three new industrial parks in Bagrami, Kandahar, and Mazar-I-Sharif with US AID support.  There are also plans for four industrial parks around Kabul, and ten others nationwide.

http://www.aisa.org.af/ipda/index.html has further details about these projects.

Examples
Service Provider Relationships

 

Professional service providers reported to be very familiar with direct investment considerations in this area from previous work on major investment projects or among leading investors there:

Other Resources

Other suggested contacts for investment planning in Afghanistan, such as regional and local contacts who work together with AISA, and websites

Kabul Chamber of Commerce & Industry

International Chambers of Commerce of Afghanistan

Afghanistan Reconstruction Task Force - US Dept of Commerce  http://www.export.gov/afghanistan/

US Embassy, Kabul

and other embassies, UN agencies, World Bank representatives, etc.

Progress Report - excerpt from speech on first anniversary of AISA

"During the past year AISA has registered 726 investment projects amounting to $493 Million of which 581 are domestic, 127 foreign and 18 joint ventures. The investment projects when become operational will produce 49,586 jobs. We have additional $300 Million worth of new projects in the pipeline.

While we see an increasing interest for investment in Afghanistan, the need for providing industrial land to built new production facilities, electric power, commercial insurance and financing are still some of the challenges to overcome."

"In cooperation with the Ministry of Light Industry, Ministry of Housing and the Ministry of Environment and water resources we are in the process of building four industrial parks in and around Kabul. Seventeen industrial park projects are planned nationwide. A $20 Million ADB loan assistance has been budgeted by the Ministry of Commerce toward building some of these industrial parks.

With a special grant from USAID three Industrial Parks will be built in Kabul, Kandahar and Mazar-e- Sharif. The Bagrami Industrial Park in Kabul will be completed and ready for distribution by October of this year."

Noorullah Delawari
President & CEO of AISA

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 Data Pointers - see also Consultant Tips

 

Suggested sources of timely statistical data for location selection issues

 

 Companies in the Area

NOT YET COMPLETE

Past Projects

NOT YET COMPLETE

Testimonials

NOT YET COMPLETE

Investment Incentives Available in the Area Local contacts which may interest some potential investors:
Multilateral Investment Guarantee Agency (MIGA), The World Bank.  www.miga.org US State Department travel advisories, Consular Information :  travel.state.gov  
US Overseas Private Investment Corporation    www.opic.gov  
Relationship Disclosure

This Area Profile was prepared by GDI Solutions as a voluntary contribution to the important work of AISA.

We have not been involved in the support of direct investment projects into Afghanistan.

We are not compensated in any way to promote investment into Afghanistan.

We expect to maintain periodic contact with AISA to improve the content made available through this website, which reflects our own judgment about the interests of the executives and advisors we serve.  Such content may therefore differ from AISA's own website.

We make no endorsement or warranty about the services provided by AISA, or vice versa.

Relationship leader at GDI Solutions for potential investors :

  •  Bruce Donnelly

    Please advise regarding any necessary corrections to this Area Profile. 

     

    The relationship leader is responsible for maintaining sufficiently frequent contact and knowledge at GDI Solutions about the participating area.  The leader keeps published GUIDE Area Profiles timely and consistent, and serves as an initial point of contact for any investors who may choose not to contact the local area representatives yet about their interests, such as at a very exploratory or confidential stage of project planning or information gathering.

Personal Commentary

In the 1960's and 1970's, few businesspeople would probably have identified Afghanistan readily on a map of the world, much less have actually known anything about it.  At best, perceptions were often shaped by the Cold War political context and greater interests in other parts of South Asia and the Middle East.  There might have been recognition that Alexander and other empires passed this way, or that the British also had trouble trying to rule it in the context of their "Great Game" in Asia against other powers of that era, but that just reflects stereotypes shaped by Kipling and other tales from the Raj in centuries past.

For many, as an extremely poor country, there seemed to be little reason to even pay any attention to Afghanistan until the Soviet Union invaded.  What followed certainly did not help to build the image of the country as a place of potential interest for long-term business investments.  It could now be found on the map, but was clearly perceived as a dangerous, lawless place of little importance to modern, international business interests.  Once the Soviet threat was removed, the country was largely ignored again, while new conflicts reinforced western perceptions that this was certainly not an attractive business location.

Afghanistan obviously remains in the middle of a region of dangerous conflicts, but this also reflects the role as a traditional crossroads of South Asia, with strong ethnic ties and trading legacies linking it across borders to other countries.  The problems and progress of neighboring countries directly affect Afghanistan, just as the flow of millions of Afghan refugees into other countries created many challenges in the early 1980's and 1990's.

The importance of successfully rebuilding a more stable and prosperous country with better relationships with other nations, both in and beyond the region, has finally gained more active support both inside the country and elsewhere.  This creates many opportunities as well as challenges, including uncertainties about the long-term commitments on both sides as the country changes to develop within the complex context of their cultural heritage and conflicts in the region.  Will the foreign commitments to Afghanistan endure this time?

Afghanistan obviously does not yet enjoy a stable business environment, but neither do many other low-income countries where the lack of comparable recent hardships may not focus their leaders as decisively on the value of business development, with top government officials welcoming foreign investment and actively trying to eliminate costly "red tape".

continued from left column ...

In Afghanistan, there is little doubt that responsible foreign investors will be welcomed as warmly as the traditional hospitality of the Afghan people would suggest.  There are many problems, as in other countries, but there is also the will to overcome the problems together as friends.  Those looking to do business in the region need to understand the importance of commitment, patience, cross-cultural sensitivity, and effective local networks of contacts.

Despite the many risks involved, the Afghan people are also legendary for their loyalty to their friends, tenacity when challenged, and savvy as negotiators with a long heritage as traders.  There are many opportunities in this fast-changing environment for those who are willing to make the long-term commitments necessary to help rebuild the country with the mutual respect, tolerance, loyalty and cultural sensitivity required to be successful beyond simply taking advantage of any foreign aid projects as Afghanistan is rebuilt.

In an era when business is not constrained by distance or roads, railways, ports and other traditional infrastructure or local market size, Afghanistan's unfortunate experience of generating so many refugees for 25 years may actually create some unique opportunities through the business connections and capabilities which they developed in exile.

While executives recognize this pattern in places like India, where so many successful expatriates have returned after leaving for higher education and economic opportunity, they may not yet have even noticed the opportunities which are emerging in Afghanistan as the refugees return.  Modern infrastructure and academic programs are being rebuilt with a clear focus on integrating Afghanistan into the world economy, rather than isolating it again.  It will not happen overnight, but the recent presidential election in Afghanistan bodes well.

Relatively few foreign companies retained operations in Afghanistan during the many years of conflict, so that leaves the market open now to those pioneers with the commitment to pursue it despite the challenges involved.  Who would have predicted a few years ago that Kabul would soon have Internet cafes and cell phones everywhere?  There is more potential for Afghanistan in this networked world than as a global base for drug or terrorist networks.  Foreign direct investment is needed, however, to help create that better future together.

Bruce Donnelly, President

Global Direct Investment Solutions

former US Vice Consul in Karachi, Pakistan 1981-83

   
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