Small investors struggle while Afghanistan hopes for big deals

Source: The Globe and Mail
Author: Zhou Xin

Afghanistan is in desperate need of investment to invigorate its tiny, fragile economy, but on top of the grave physical dangers of the decade-old war, businesses are put off by corruption, pitiful infrastructure, and a slothful bureaucracy.

Even after the billions of dollars of Western aid that have been pumped in, Afghan gross domestic product was only $15-billion last year, a tenth of the size of Cameroon, El Salvador and Uganda, and its jobless rate is around 30 per cent.

As it looks beyond the 2014 deadline for foreign combat troops to leave, the government is banking on potentially huge mining projects to bring in cash, not least to pay for the disciplined security forces it needs to prevent the country being sucked into a full-blown civil war.

But without a layer of small enterprises with the capacity to provide jobs, goods, services and taxes, the hoped-for enriching effect of big business will be severely limited.

Yu Minghui, a Chinese merchant who has been trying to build a small steel plant on the outskirts of Kabul since 2003, should be welcomed with open arms.

His factory will employ around 80 Afghans, and in a bright “swords into ploughshares” idea, recycle the military wreckage that decades of conflict has scattered across the country into steel wire for buildings.

Progress has been painfully slow, he says, and the Afghan authorities obstructive and money-grabbing.

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