Afghanistan's Exports in Solar Year 1401: Challenges and Government Measures to Tackle Them
By: Fazal Wali Sherani
Translated by: Sajad Ahmad Khetab
Afghanistan holds a significant position in the region, primarily due to its strategic geographical location, serving as a vital link between neighboring countries. Throughout its history, the nation has played a crucial role as a trade route connecting the East and the West, with a longstanding tradition of facilitating the movement of goods in the area. However, the past four decades of war, marked by invasions from the former Soviet Union and the United States of America, have severely impacted Afghanistan's trade sector, along with other parts of the country. Prominent exports such as carpets and fruits faced a decline, resulting in a stagnation of the country's economic growth. Following the re-establishment of the Islamic Emirate on August 15, 2021, efforts have been dedicated to reviving and developing Afghanistan's economy, with a particular focus on trade. Substantial progress has been made in the past two years, including an increase in exports, improved transparency in revenue collection from imports and exports, and the provision of necessary trade facilities, all of which have accelerated the growth of Afghanistan's weakened trade sector. The article focuses on three main topics: the ongoing process of development, the significance of exports in driving economic growth, and the status of Afghanistan's exports following the re-establishment of the Islamic Emirate, along with their impact on the country's economic situation.
The Economic Value of Exports
The development of infrastructure in key sectors of the national economy and robust support from these sectors contribute to an upsurge in exports. Expanding exports elevates profitability for domestic industries and businesses while mitigating market fluctuations, as the exporting nation gains access to diverse markets and can shift focus in the event of market instability. Moreover, export-oriented growth prompts domestic producers to optimize cost efficiency through increased production, resulting in enhanced profitability in the global market. Exportation is an integral component of demand dynamics, as heightened exports stimulate overall demand and consequently foster economic development. Additionally, amplifying exports maintains a country's trade balance equilibrium. Given the significance of exports, countries must bolster their export capacity to spur economic advancement. Recognizing this significance, the Islamic Emirate has swiftly undertaken measures to bolster export levels compared to previous years. Afghanistan boasts global recognition for several of its export commodities, exemplified by its renowned carpet industry. Throughout history, Afghanistan has engaged in trade with neighboring nations and other global partners, facilitating the export of its goods. Notably, dried fruits remain a crucial export item for Afghanistan. Furthermore, Afghan carpets, rugs, and other domestic products hold substantial market value in China, India, Saudi Arabia, Tajikistan, Kazakhstan, and other international markets, alongside neighboring countries. Exportation, an essential facet of commerce, aims to generate profits, enabling goods and services providers to accrue financial gains. Emphasizing international business over domestic trade aligns with the global trend, as countries strive to export their products and services worldwide, fostering economic self-reliance and expanding their market reach beyond national boundaries. Overall, exports play a pivotal role in driving economic growth, facilitating employment opportunities, and maintaining a favorable trade balance. For a nation to embark on the path of economic development, its exports must surpass imports in the trade balance, as increased exports yield greater foreign exchange reserves and bolster the country's purchasing power in international markets.
The Islamic Emirate and the Country’s Exports
Following the re-establishment of the Islamic Emirate in 2015, despite the freezing of assets by the United States and the imposition of sanctions by the international community affecting the banking sector and business of Afghanistan badly, the officials of the Islamic Emirate of Afghanistan prioritized the business sector, recognizing its crucial role in the country's economic cycle. The objective was to foster trade development and expand the growing economy, resulting in increased exports. Comparative data over the past three years indicates that the Islamic Emirate has successfully implemented its foreign trade policy, fostering regional confidence and establishing independent and equitable trade relationships. Given the current trade policy, it is anticipated that the export trajectory will continue to rise in the coming years. In the solar year 1399, Afghanistan's exports amounted to $777 million, with destinations including India, Pakistan, Iran, Uzbekistan, Kazakhstan, United Arab Emirates, Turkey, Saudi Arabia, Germany, Italy, Russia, and Tajikistan. Exported goods comprised herbs, cummins, seeds, fresh and dried fruits, eggplants, carpets, rugs, marbles, and pottery. In the solar year 1400, export levels slightly increased, reaching a total value of $850 million. Despite facing global sanctions, the Islamic Emirate managed to further enhance export levels by the end of the year 1400. Afghanistan exported goods such as herbs, seeds, dry and fresh fruits, coal, cotton, cumin, onions, tomatoes, saffron, and carpets to various countries. In 1400, exports valued at $801 million were directed to India, Pakistan, China, United Arab Emirates, Uzbekistan, Tajikistan, Kazakhstan, Turkey, Iran, Turkmenistan, and Saudi Arabia, while the remaining $49 million worth of exports was distributed among other countries worldwide. Between the first day of the first month of the year 1401 and the end of the month of Hout, Afghanistan's exports reached approximately $2 billion. Notably, 97% of goods exported during this period were destined for Pakistan, India, Uzbekistan, Tajikistan, Iran, United Arab Emirates, China, Turkey, Kazakhstan, and Turkmenistan, while the remaining 3% were shipped to other countries across the globe. Coal, herbs, cotton, grapes, pomegranates, tomatoes, raisins, dried figs, pine nuts, and apricots accounted for 63% of all exports, with the remaining 37% comprising various other goods. Overall, the re-establishment of the Islamic Emirate has resulted in a substantial increase in the country's exports. In the year 1401, export levels doubled compared to the years 1399 and 1400. If the world sanctions are lifted and frozen Afghan assets are released, it is expected that export levels will experience further growth. This increase in exports will strengthen Afghanistan's economy, leading to overall development and improved living standards for its people. Moreover, if the export trend continues, Afghanistan has the potential to transition from an importing country to an exporting country in the coming years, with its products securing a significant presence in international markets.
Problems and Solutions
Afghanistan, as a part of the world, engages in transactions with other countries. It is important to acknowledge that even countries with strong economies may require engagement with nations that have weaker economies since economic transactions are fundamental in such interactions. The strength of these countries lies in the wakefulness and loyalty of their leaders to their nations. It is imperative for us to expand our economic relations with other nations. Despite the Islamic Emirate surpassing the expected increase in export levels, there are still challenges that hinder our development. These challenges include the sanctions imposed by the international community and the freezing of Afghan assets by the United States. Furthermore, the recognition of the Islamic Emirate is an issue that cannot be ignored. If these problems are resolved, Afghanistan's trade will witness greater development, leading to further increases in exports. The Islamic Emirate has repeatedly appealed to the international community, assuring that all necessary conditions for recognition have been met. It has also emphasized the importance of mutual interaction with the world in various international forums. However, the world has demonstrated a willingness to recognize only if their demands are met. Many of these demands are not in alignment with Islam or Afghan traditions and constitution. Moreover, most of the demands involve interference and questioning the independence of Afghanistan, which is unacceptable to the Afghan people and the government. Regarding the release of frozen assets, the Islamic Emirate has made significant efforts. Additionally, some neighboring and regional countries have urged the United States to return the wealth of the Afghan people. Unfortunately, no positive response has been received in this regard. These matters have resulted in challenges within Afghanistan's banking system and have had adverse effects on businesses. Nevertheless, the Islamic Emirate is currently intensifying its efforts to improve the banking system and has made substantial progress in addressing these issues. The Islamic Emirate seeks positive interaction with the world and is committed to fostering further development.
The economic and social development of a society depends on the economic relations of the society. Most of the countries of the world are connected to each other in terms of production factors. The economic relationship between the countries is sometimes so strong that most of the time border problems and other disagreements cannot hinder trade relations. That the economic development of societies depends on the strengthening of relations between countries. In this regard, something that has a greater role is trade, because with the development of trade, the relations between countries expand on the one hand, and on the other hand, the level of exports increases. Despite the fact that the Islamic Emirate is facing international sanctions, it has doubled its exports compared to previous years. On the whole, when governments consider themselves responsible and have patriotism in their hearts and want to serve their country and citizens and take their country to the highest levels of development, then they do not look at it day and night, they always work and try. It is to carry out its responsibilities as required. The Islamic Emirate, as a responsible government, is trying to improve the country's economy, make it stand on its own feet, and make Afghanistan competitive with the developed countries of the world. As far as it can be seen, the Islamic Emirate has started all the basic works that can free Afghanistan from the needs of others, remove it from the list of third world countries along with an independent country and become a developed country.