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'Great Potential' for Afghanistan Entrepreneurship

Mark Marich

A new report on expeditionary economics from the Kauffman Foundation touts the 'unrecognized and untapped economic potential' in Afghanistan's private sector. "Bactrian Gold: Challenges and Hope for Private-Sector Development in Afghanistan," is the second paper in a series reconsidering the United States' approach to economic development in areas affected by conflict and natural disasters.

The authors interviewed more than 130 business owners and economic stakeholders in the Afghan cities of Kabul, Kandahar, Jalalabad, Mazar-e-Sharif and Herat, traveling without security or organizational affiliation to better understand the Afghan people's perspectives. The resulting report provides recommendations for how the Afghan government and international stakeholders can best support private-sector economic growth in Afghanistan, including:

  • Private-sector talent from other countries should support and work alongside Afghan businesses. Numerous entrepreneurs and aid organization stakeholders cited the lack of education or background in developing a business plan and effectively applying for financing as a barrier to getting funds or international backing to grow small businesses.
  • Development incentives must be changed to support implementation and long-term results. The short time horizons of many international aid programs, or the program administrators' terms of duty, are at odds with the realities of the time needed for a startup to grow, particularly in the current Afghan business environment.
  • While agriculture remains an economic mainstay and mining has great potential, the authors found that other sectors such as light manufacturing and services may be easier for entrepreneurs to enter.
  • Afghan enterprises must be supported with a better regulatory and operating environment, public-private partnerships, and links to multinational firms.

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