1. ntroduction to Harakat-AICFO:
Harakat – Afghanistan Investment Climate Facility Organization (AICFO) is an independent, not-for-profit, Afghan managed organization that provides grant funds to the private sector, government and civil society to implement projects that reduce or remove institutional and regulatory barriers to doing business in Afghanistan. Harakat – AICFO aims to improve Afghanistan’s business environment by removing obstacles to private investment.
Harakat does not implement or manage investment projects; it funds the activities of others, supporting the reform role of the Government and complementing the vision of the Private Sector. Harakat is an initiative of the UK’s Government, Department of International Development (DFID), which provides the initial seed funding. Other multilateral, bilateral and private sector funders will augment this seed funding to support practical, result-oriented projects that promote the following 8 priority areas:
1. Financial markets that provide greater access to finance and affordable credit to all sizes of business, especially SMEs;
2. Streamlined and more effective regulations and creation of regulatory impact assessment systems;
3. Increased private sector investment in infrastructure, especially energy, water and transportation;
4. More equitable and efficient taxation and customs systems;
5. Strengthened property rights and more effective contract enforcement;
6. Higher workforce productivity and mobility and improved labour market regulation;
7. Strengthened competition policy that reduces anti-competitive practices; and
8. Improved capacity of government and institutions to tackle corruption.
Harakat’s aim is not to replace the government, or civil society’s important work in reducing barriers to sustainable business. It supports the positive initiatives already happening in various sectors, works in partnerships with existing and emerging key players, and provides support to them so that more of these become reality. Harakat will use the available funds to identify and fund practical projects that will increase the attractiveness and ease of investing in Afghanistan.
2. BACK GROUND AND PURPOSE OF THE POSITION
The Economy of Afghanistan, which is valued approximately US$20 billion, is composed of several industries which are major contributors to the GDP. However, these industries are not performing in their full potential. The competitive environment is underdeveloped and the industries have suffered from years of negligence and lack of support. If properly regulated and supported, there are a number of industries that can have strong competitive advantage to compete in regional and global markets.
Prior to the liberalization of the economy in Afghanistan the industries were regulated and controlled by the government. These industries employed thousands of people and produced the goods and services required to meet the market demand. However, the new constitution of Afghanistan drafted in 2004 changed the economic system to market based economy with a diminishing role for the government. The impact was felt by the industries as they were ignored and deprived of the attention and support needed.
There has been limited or no analytical and policy studies conducted on the industries in Afghanistan. However, in order to regulate, standardize the industries and identify the areas where government support and incentive packages are required, we are determined to provide expert analysis and recommendations for the purposes of stimulating growth and attracting investment in these industries.
The goal is to transform the domestic industries in Afghanistan from the current state into properly analyzed, regulated investment-worthy industries with a healthy competitive advantage to compete in the local and the regional markets.
Our work plan consists of working on 15 industries that hold strategic significance to country and have a relative advantage in competing in the regional markets