Afghanistan’s image in the news media is often shaped by negative stories focused on security and political challenges. What is often not highlighted are a number of successes, achieved over the past several years, in shaping the country’s economic policy and democratic governance. These reforms have improved the business enabling environment and made a positive difference in the lives of small business owners whose livelihoods depend on a predictable and efficient regulatory environment.
Afghanistan remains one of the poorest countries in the world and one of the most difficult places to do business. The World Bank’s 2015 Doing Business data places Afghanistan at 183 on the list of 189 countries ranked on ease of doing business globally. It also ranks the country near the bottom of the list on indicators such as getting electricity (141), registering property (183), trading across borders (184) and enforcing contracts (183). On measures such as paying taxes (79), getting credit (89) and resolving insolvency (159), Afghanistan doesn’t fare much better.
Since 2005, CIPE has worked with the business community to build their capacity and engage with the government in order to improve the business enabling environment in Afghanistan. In 2011, CIPE partnered with the Afghanistan Chamber of Commerce and Industry (ACCI), the national apex chamber, and a coalition of 10 other sectoral Afghan business associations, including two women’s associations, to prepare and release a national business agenda. The 2011 NBA unified the business community to advocate for market-oriented reform and allowed the private sector for the first time to have a voice in the national policymaking process. The NBA contained a number of recommendations including reforming tax and tariff policy, improvements in infrastructure, access to land and credit, and trade facilitation, among others.
The most significant improvements in the business climate achieved by CIPE’s partners focus on governance, infrastructure, and security of industrial parks; reducing the cost of business licenses; reforming and modernizing the customs regime; and reducing certain tariffs. CIPE’s contribution transcends the actual reforms enacted and extends to establishing a process and mechanism for policy reform. CIPE and its partners have improved the business climate and strengthened democratic governance by helping build a more open, transparent, diversified, and prosperous economy in Afghanistan.
Teodora Mihaylova is Research Coordinator at CIPE.