GLOBAL COUNTRY REPORT ON AFGHANISTAN BY SMT. SARALABEN VASANTBHAI MALAVIYA SCHOOL OF MANAGEMENT GONDAL ROAD, RAJKOT COLLEGE CODE: 811 1 CONTENTS SR. PAGE PARTICULAR NO. NO . PART-I ECONOMICS OVERVIEW OF THE SELECTED COUNTRY 1 ECONOMIC OVERVIEW OF THE AFGHANISTAN 6 2 OVERVIEW OF THE INDUSTRIES TRADE AND COMMERCE 11 3 OVERVIEW DIFFERENT ECONOMIC SECTOR OF AFGHANISTAN 15 4 OVERVIEW OF BUSINESS AND TRADE AT INTERNATIONAL LEVEL 22 5 PESTEL ANALYSIS OF THE OVERVIEW OF THE MAJOR INDUSTRY 27 PART- II DIFFERENT SECTOR IN AFGHANISTAN MINING SECTOR 2 33-52 AGRICULTURE AND LIVE STOCK 3 53-67 STEEL SECTOR 4 68-74 5 TEXTILE SECTORE 75-90 6 ENERGY SECTORE 90-101 BIBLIOGRAPHY 101 - 7 103 2 PART- I ECONOMIC OVERVIEW OF AFGHANISTAN 3 4 DEMOGRAPHICS OF AFGHANISTAN Population: 30,419,928 (July 2012 est.) 0-14 years: 42.3% (male 6,464,070/female 6,149,468) 15 -64 years: 55.3% (male 8,460,486/female Age structure 8,031,968) 65 years and over: 2.4% (male 349,349/female 380,051) (2011 est.) (2011 est.) Growth rate: 2.22% 39.3 births/1,000 population (2011 est.) Birth rate: Death rate: 14.59 deaths/1,000 population (July 2011 est.) Total Population: 49.72 years Life expectancy: Male: 48.45 years Female: 51.05 years (2011 est.) Fertility rate: 5.39 children born/woman (2011 est.) Total: 121.63 deaths/1,000 live births male: 129.51 deaths/1,000 live births Infant mortality rate: female: 113.36 deaths/1,000 live births (2011 est.) Age structure: 0-14 years: 42.3% (male 6,464,070/female 6,149,468) 15-64 years: 55.3% (male 8,460,486/female 8,031,968) 65-over: 2.4% (male 349,349/female 380,051) (2011 est.) Sex ratio: At birth: 1.05 male(s)/female Under 15: 1.03 male(s)/female 15-64 years: 1.04 male(s)/female 65-over: 0.87 male(s)/female Nationality: noun: Afghan(s) Nationality: adjective: Afghan Pashtun 42%, Tajik 27%, Hazara 9%, Uzbek 9%, Major ethnic: Aimak 4%, Turkmen 3%, Baloch 2%, other 4% Language: Afghan Persian or Dari (official) 50%, Official: Pashto (official) 35%, Turkic languages (primarily Uzbek and Turkmen) 11%, Spoken: 30 minor languages (primarily Balochi and Pashai) 4%, much bilingualism 5 Economic Overview Of the Country Afghanistan is one of the world's poorest countries. Many years of war and political instability have left the country in ruins, and dependent on foreign aid. The main source of income in the country is agriculture, and during its good years, Afghanistan produces enough food and food products to provide for the people, as well as to create a surplus for export. The major food crops produced are: corn, rice, barley, wheat, vegetables, fruits and nuts. In Afghanistan, industry is also based on agriculture, and pastoral raw materials. The major industrial crops are: cotton, tobacco, madder, castor beans, and sugar beets. Sheep farming is also extremely valuable. The major sheep product exports are wool, and highly prized Karakul skins. Afghanistan is a land that is rich in natural resources. There are numerous mineral and precious stone deposits, as well as natural gas and yet untapped petroleum stores. Some of these resources have been exploited, while others have remained relatively unexploited. One of the poorest countries in the world, Afghanistan is the lowest-ranking country outside Africa on the UN's human development index. According to the World Bank, economic growth will be about 8.5 per cent in 2010-11 and GDP per capita will reach $609. Much of this is aid driven. Unemployment is estimated at 40 per cent, and 42 per cent of Afghanistan's population lives below the poverty line. 6 The government's budget for the current year is $4.8 billion, with almost two-thirds going toward military and security spending. By the end of 2009, the international community had pledged over $62 billion in aid since the fall of the Taliban but most of this has not actually been delivered. Afghanistan is the No. 1 global aid recipient, receiving about $6.2 billion in aid in 2009, according to Global Humanitarian Assistance. Afghanistan's illicit opium trade, which primarily benefits the Taliban and local warlords, had an estimated value of $2.8 billion in 2009, equivalent to one-quarter of the GDP. 7 HISTORY Afghanistan, often called the crossroads of Central Asia, has had a turbulent history. In 328 BC, Alexander the Great entered the territory of present-day Afghanistan, then part of the Persian Empire, and established a Hellenistic state in Bactria (present-day Balkh). Invasions by the Scythians, White Huns, and Turks followed in succeeding centuries. In AD 642, Arabs invaded the entire region and introduced Islam. Arab rule gave way to the Persians, who controlled the area until conquered by the Turkic Ghaznavids in 998. Following Mahmud's short-lived dynasty, various princes attempted to rule sections of the country until the destructive Mongol invasion of 1219. Following Genghis Khan's death in 1227, a succession of petty chiefs and princes struggled for supremacy until late in the 14th century, when one of his descendants, Tamerlane, incorporated Afghanistan into his own vast Asian empire. In 1747, Ahmad Shah Durrani, the founder of what is known today as Afghanistan, established his rule. A Pashtun, Durrani was elected king by a tribal council after the assassination of the Persian ruler Nadir Shah at Khabushan in the same year. Throughout his reign, Durrani consolidated chieftainships, petty principalities, and fragmented provinces into one country. His rule extended from Mashad in the west to Kashmir and Delhi in the east, and from the Amu Darya (Oxus) River in the north to the ArabianSeainthesouth. GDP (2010est., purchasing power parity): $27.36 billion. GDP growth (2010-2011): 8.2%. GDP per capita (2009 est.): $900. 8 Natural resources: Natural gas, oil, coal, petroleum, copper, chromite, talc, barites, sulfur, lead, zinc, iron ore, salt, precious and semiprecious stones. Agriculture (estimated 31.6% of GDP): Products--wheat, opium, sheepskins, lambskins, corn, barley, rice, cotton, fruit, nuts, karakul pelts, wool, and mutton. Industry (estimated 26.3% of GDP): Types--small-scale production of textiles, soap, furniture, shoes, fertilizer, cement; hand-woven carpets; natural gas, coal, and copper. Services (estimated 42.1% of GDP): Transport, retail, and telecommunications. Trade (2010-2011): Exports--$252 million (does not include opium): fruits and nuts, hand-woven carpets, wool, cotton, hides and pelts, precious and semiprecious gems. Major markets--Central Asian republics, United States, Russia, Pakistan, India. Imports--$2.9 billion: food, petroleum products, textiles, machinery, and consumer goods. Major suppliers--Central Asian republics, Pakistan, China, India. Currency: The currency is the afghani, which was reintroduced as Afghanistan's new currency in January 2003. As of November 21, 2011, $1 U.S. equaled approximately 48.28 Afghanis. 9 Economy Since 2002, Afghanistan is in transition from a centrally-planned and heavily regulated Economy towards an open and free economy based on the market system. The Economy encountered a structural change over the last decade, when the political shift Occurred after the fall of Taliban in 2001 and with the adoption of the new constitution in 2004. The new constitution acknowledged ‘market economy’ as the economic system and guaranteed the promotion and protection of private investment (Article 10 of the Constitution). The economy has since been highly liberalized and the government has focused on a private sector-led growth. The economy has grown at a remarkable pace since 2003; average growth rate over the period 2003-2011 has been 11.2 percent. Only few countries in the region have experienced a growth rate above 10 percent in the last decade. For Afghanistan, this is a remarkable achievement despite the fact that serious security challenges exist in the country. Real GDP growth is estimated at 5.7 percent in 2011/12 and is projected to increase to 7.1 percent in 2012/13. Income per capita is estimated by the World Bank at US $501, which puts Afghanistan in the 175th position among 190 countries in the world. Inflation has been on average above 10 percent in the last nine years; the average inflation rate for the period 2003-2011 is 11.3 percent. However, such a relatively high inflation rate does not seem to have been a drag on economic growth. Period-average inflation for the year 1390 (2011/12) has been 10.6 percent, whilst it is forecast to remain in single digits in 2012/13. 10 Overview of Industries Trade and Commerce Trade and Industry: Afghanistan is endowed with natural resources, including extensive deposits of natural gas, petroleum, coal, copper, silver, gold, cobalt, chromites, talc, barites, sulphur, lead, zinc, iron ore, salt, rare earth elements, and precious and semiprecious stones. Unfortunately, ongoing instability in certain areas of the country, remote and rugged terrain, and an inadequate infrastructure and transportation network have made mining these resources difficult, and there have been few serious attempts to further explore or exploit them. The first significant investment in the mining sector is expected to commence soon, with the development of the Aynak copper deposit in east-central Afghanistan. This project tender, awarded to a Chinese firm and valued at over $2.5 billion, is the largest international investment in Afghanistan to date. The Ministry of Mines also plans to move forward with additional tenders in 2012. The most important resource has been natural gas, first tapped in 1967. At their peak during the 1980s, natural gas sales accounted for $300 million a year in export revenues (56% of the total).