Domestic Production: Importance and Ways to Increase It
By: Abdullah
Introduction
Economy and its growth must be prioritized. In light of the fact that development and progress are among the primary goals of modern societies, the need for supporting domestic production, moderation in consumption, and economic prosperity is more evident than ever. Supporting domestic production and educating individuals to adopt responsible consumption habits have numerous social benefits, such as economic growth, job creation, increased national income, the blossoming of domestic talents, trade development, and industrial progress. These ultimately lead to long-term and sustainable development since sustainable development heavily relies on boosting domestic production. Once national needs are met, surplus production can be exported, turning the country into a major economic power through international trade. If domestic production flourishes, inflation and unemployment will be addressed, and the domestic economy will strengthen. This article discusses the importance of domestic production in economic growth, strategies for enhancing it, and steps taken by the Islamic Emirate to promote domestic industries.
The Importance of Domestic Production in Economic Growth
In today's industrial world, national production acts as a competitive tool, and production sectors must adapt to increasing competition, product diversity, changing social demands, and rising customer expectations. National production is essential for economic independence, preventing foreign currency outflow, and most importantly, for job creation—one of the government’s top priorities.
Promoting the culture of buying domestic goods is crucial for keeping the economy running and is a social responsibility. Production plays a central role in ensuring societal welfare by fostering growth, employment, and the efficient use of resources. Additionally, production addresses key challenges such as unemployment, inflation, and housing shortages, driving the economy forward. A robust domestic production sector not only strengthens the economy but also promotes self-reliance, reduces dependency on imports, and increases national revenue through exports.
Strategies to Enhance Domestic Production
Economic growth models and experiences of developed countries demonstrate that industrial development is not possible without government oversight, support, and encouragement. The government must play a decisive role in promoting domestic industries. Unfortunately, prior to the rise of the Islamic Emirate, Afghanistan lacked such support. The unregulated market became flooded with low-quality consumer goods from neighboring countries, which undermined the nascent domestic industries. As a result, many Afghan factories struggled to compete with foreign competitors and were forced to cease operations.
To foster industrial growth and increase domestic production, the government needs to implement supportive policies. For example, tax exemptions could be offered for domestic manufacturers, and customs duties on imported raw materials needed for industries could be waived. Similarly, reducing trade barriers for export goods would help promote Afghan products in global markets. The government can also prioritize domestic products in public procurement and launch effective media campaigns to promote national goods. Enhancing the quality of domestic products, attracting foreign investments, combating corruption, and creating a favorable environment for businesses are critical measures.
Measures Taken by the Islamic Emirate to Boost Domestic Production
Since coming to power, the Islamic Emirate has taken significant steps toward enhancing domestic production. Customs duties on exports have been reduced to zero, facilitating Afghan products' access to international markets. The government has also created investment-friendly conditions, attracting both domestic and foreign investors who have committed billions of dollars to various sectors. Moreover, the Emirate has emphasized combating administrative corruption and promoting the use of local products, even if their quality is slightly lower than imported alternatives.
The government has also reactivated several previously dormant factories under the “Emirate corporation company” initiative, restarting 13 production units that had halted operations. Some partially functional state-owned companies have been rehabilitated and are now producing a variety of goods. Customs tariffs on imported items that can be locally manufactured have been increased to encourage domestic production. Power supply, which was a major obstacle for industries, has also improved significantly under the Emirate’s governance. Industrialists now benefit from easier access to land, permits, and reduced tariffs on imported raw materials.
As a result of these efforts, the number of factories in major provinces like Kabul, Kandahar, Herat, and Balkh is steadily growing. For example, the Life Pearl pharmaceutical factory in Kabul, inaugurated in July 2023, involved an investment of $20 million and created jobs for 300 people. In Kandahar, textile factories that produce cotton and woolen products have resumed operations. Additionally, senior government officials have inaugurated new factories, such as Itok Pharma, Afghan Medicine, and Shams Cola in Herat.
Currently, Afghanistan exports goods to 80 countries in 24 sectors, with most exports consisting of domestic products. Reports indicate that the country is close to achieving self-sufficiency in several areas, including food production.
Conclusion
Industry and industrial products play a vital role in a country’s economic growth. The stronger and more industrialized a nation is, the better its economic situation will be. Afghanistan, with its rich natural resources, human capital, and abundant forests and mines, has the potential to develop a thriving industrial sector. In contrast, the rise of the Islamic Emirate has resulted in significant improvements in the country’s industrial landscape. As mentioned, Afghanistan now exports products to 80 countries, and many sectors are approaching self-sufficiency. If the current momentum continues, Afghanistan is on the path to becoming an industrialized nation in the near future.