‘Afghanomics’- Etisalat In Afghanistan?

Case 2.1: ‘Afghanomics’- Etisalat in Afghanistan? Afghanistan is a multi-ethnic country, which consist of a large number of ethnic groups (Pashtuns, Tajiks and Hazaras being the three biggest

of them). It was founded as a large independent state in the middle of the 18th century. During the 19th century Afghanistan became part of the British Empire until it re-gained full independence in 1919. Sixty years after its independence Afghanistan was invaded by the Soviet

Union, which occupied the country until 1990. After ten years of civil war and a theocratic dictatorship by the Taliban, a coalition force led by the US invaded Afghanistan in 2001 to end the Taliban regime, which supported the Al Qaeda terrorist group. After the US-led invasion and

the end of the Taliban regime, the United Nations Security council created the International Security Assistance Force (ISAF) to bring political stability to the country. In 2005 the ISAF forces supervised a peaceful democratic election, which led to the formation of the government under President Hamid Karzai. The civil wars and the invasion of the Soviet Union resulted in the destruction of Afghanistan’s main physical infrastructure like housing, road systems, health facilities etc. Since 2001 foreign donor countries pledged to invest billions of dollars to re-build Afghanistan’s economic and political system. According to a report by the Asian Development Bank the project to re-establish Afghanistan as a stable and politically functioning country with a strong and growing national economy would be conducted in a two phases process: in phase one, the build-up of the vital physical national infrastructure and, in phase two, the creation of modern public sector institutions to promote a capitalist, market-led development of Afghanistan. So far the economy has been growing at around 16% per annum since 2003.

The Afghan currency has become relatively stable with an inflation rate of around 10%. Foreign companies are invited to invest in the country and they are attracted by billion-dollar contrast of the national governments and donor nations. The major home industries are agriculture, mineral resources and the production of poppy and the opium trade; around one third of Aghanistans’s GDP comes from growing illicit drugs such as opium, heroine and hashish. Since the Soviet invasion in 1979 the population of Aghanistan has shrunk to 29m people with more than 5m Afghans having fled the country to neighboring Pakistan, Iran and other Gulf countries; 180,000 Afghans are living in the UAE . Since the formation of the government of President Karzai one important driver for economic growth has been the return of millions of former refugees; they bring with them money, fresh energy and entrepreneurship. The Afghans, however, who have

stayed in Afghanistan until the present, are amongst the poorest in the world with two thirds of the population living on less than US $ 2 a day; the majority of workers is poorly skilled with a literacy rate of just 28% of 15+ year olds.

The telecommunication system in Afghanistan is based on 100,000 main lines and two million mobile cellular phones in 2005. This means that only four in 100 Afghans have access to wireless phones. By 2005 the telecommunication market consisted out of three telecommunication

companies: Afghan Wireless, Roshan and foreign-owned Areeba. Looking to the economic future, one has to mention Afghan’s richness in mineral resources. The country has huge amounts of gas and oil, on the one hand, and precious metals like gold and silver on the other hand.

The Afghan government hopes that with the help of new technologies more resources will be discovered. Until now Afghanistan still imports most of its energy including its electricity from outside the country so that the development and processing of its own resources will help the

growth of its economy enormously.

Sources:

CIA fact book

Wikipedia

Gulf News