Afghanistan

MARKET OF AFGHANISTAN

AFGHANISTAN'S MARKET OVERVIEW

Commercial obligations in Afghanistan, Law on Cooperatives, ‎Enterprises and Banks. Afghanistan has natural gas, oil, coal, marble, gold, copper, chromite, talc, barite, sulfur, lead, zinc, iron ore, salt, precious and semi-precious stones. Total value of Afghanistan's mines is equivalent to 1.5 trillion dollars. Afghanistan is an agricultural country with a high livestock capacity. Import and Export of Afghanistan and goods that are main items for export. The high quality of Iranian goods compared to Pakistani goods, the insecurity of Pakistani roads are the reasons for the increase in Iran's exports to Afghanistan.

Afghanistan’s geography and trade rules

Commercial obligations in Afghanistan, Law on Cooperatives, ‎Enterprises and Banks
Commercial obligations in Afghanistan, Law on Cooperatives, ‎Enterprises and Banks

Afghanistan, officially the Islamic Republic of Afghanistan, is a landlocked country in South ‎Asia, bordering Central Asia, East Asia, and West Asia (Middle East). Afghanistan's neighbors ‎are Iran to the west, Pakistan to the south and east, Tajikistan and Uzbekistan and ‎Turkmenistan to the north, and China to the northeast. Afghanistan is the 41st largest ‎country in the world with an area of 652,860 square kilometers and a population of about ‎‎39.8 million, which makes it the 37th largest country in the world. Kabul is the capital and ‎largest city.‎

Dari and Pashto Persian are the official languages of this country and Islam is its official ‎religion. Nearly four decades of war have made Afghanistan one of the most insecure and ‎impoverished countries in the world. The country's per capita GDP in 2020 is $ 552 based on ‎the face value of the dollar and will reach $ 2,474 based on purchasing power parity. The ‎country was ranked 172nd in the world in 2011 with a human development index of 0.398. It ‎acceded to the United Nations on November 19, 1946.‎

In Afghanistan, bills and articles of association had already been drafted in this regard, ‎which mainly dealt with trade-related issues in their initial form. Bankruptcy, etc. can be ‎mentioned. However, in 1945, a supplementary law called the Afghanistan Principles of ‎Commerce was drafted into 945 articles. With the entry into force of this principle, all ‎previous principles and bills were repealed and this law has almost met the commercial ‎needs of Afghanistan since then. 

Historically, it has a long history and even the issues that ‎have been foreseen in the Afghan constitution have not been put into practice so far. For ‎example, according to IT, it has predicted different types of commercial companies, some of ‎which have It is now rarely seen in Afghanistan, such as a joint venture company or the ‎provision of business documents, which is a big step in encouraging and growing trade in ‎Afghanistan. 

It should be noted that in addition to AT-1 A number of other laws have been ‎enacted according to the needs of the time, such as the Law on Cooperatives, the Law on ‎Enterprises, the Law on Banks, the Law on Insurance, the Law on Foreign Investment, and ‎the Principles of Commercial Trials, which have emerged one after the other as independent ‎laws. ‎

‎ Afghanistan's Charter of Commerce contains four chapters. The first chapter is general ‎provisions, the second chapter is commercial companies, the third chapter is commercial ‎documents and the fourth chapter is commercial obligations. ‎

Mines of Afghanistan

Afghanistan has natural gas, oil, coal, marble, gold, copper, chromite, talc, barite, sulfur, lead, zinc, iron ore, salt, precious and semi-precious stones
Afghanistan has natural gas, oil, coal, marble, gold, copper, chromite, talc, barite, sulfur, lead, zinc, iron ore, salt, precious and semi-precious stones

Afghanistan has abundant natural resources including vast reserves of natural gas, oil, coal, marblegold, copper, chromite, talc, barite, sulfur, lead, zinc, iron ore, salt, precious and semi-precious stones, and many more. In 2006, a US geological survey estimated that Afghanistan had 36 trillion cubic feet of natural gas and 3.6 billion barrels of oil and condensate reserves. According to a 2007 assessment, Afghanistan has a significant amount of undiscovered mineral resources. Geologists also found evidence of abundant deposits of colored stones and precious stones, including emeralds, rubies, sapphires, garnets, azure, composite, spinel, tourmaline, and peridot.

In 2010, US Pentagon officials, along with US geologists, uncovered approximately $ 1 trillion in untapped mineral reserves in Afghanistan. A Pentagon note says Afghanistan could become Saudi Arabia's lithium. Some believe that intact minerals are worth up to $ 3 trillion.

Another US Geological Survey in September 2011 estimated that household carbonates in Helmand province were estimated to contain 1 million tonnes of trace elements. "This is just another piece of evidence that shows Afghanistan's mining sector has a bright future," said Regina Dubai, head of the Department of Defense's Special Task Force (TFBSO).

Afghanistan signed a copper deal with China (China Metallurgical Co., Ltd.) in 2008. It is a large project involving $ 2.8 billion in Chinese investment and about $ 400 million in annual revenue for the Afghan government. The Aynak copper mine, located in Logar province, is one of the largest in the world and is expected to provide jobs for 20,000 Afghans. It is estimated to have at least 11 million tons, or $ 33 billion, of copper.

On October 5, 2018, in Washington, DC, Afghan officials signed a 30-year contract with the Center Investment Group and its operating company, the Afghan Gold and Minerals Company, to explore and develop copper mining operations in the Balkhab area of ​​Sar-e-Pul province. And to explore and develop a gold mining operation in Badakhshan province. The copper contract included an investment of $ 56 million and the gold contract $ 22 million.

Experts believe that copper production could start in two to three years and iron ore in five to seven years from 2010. Another recently announced treasure is the Hajigak iron ore mine, located 130 miles west of Kabul, which is believed to hold about 1.8 billion to 2 billion metric tons of the mineral used to make steel. AFISCO, an Indian consortium of seven companies led by the Indian Steel Authority and Goldmines Canada, is expected to jointly invest $ 14.6 billion in the development of the Hajigak iron ore mine. The country has several coal mines but needs to be modernized.

What are the value of Mines in Afghanistan?

Total value of Afghanistan's mines is equivalent to 1.5 trillion dollars
Total value of Afghanistan's mines is equivalent to 1.5 trillion dollars

The value-added of the sector of mine has reached 60 billion Afghanis in the first year and its share in GDP reaches 6.6 percent.

Afghanistan has many rich mines such as gold, azure, emerald, turquoise, and coal, which are unique in the world, and about 13 types of coal were mined from this mine and even continued to operate during the war. Some of the equipment in the mine dates back to about 45 years ago when it was given to Afghanistan by the Austrian government.

Afghanistan has countless mines and some of the country's mines are famous in the world and for thousands of years the Egyptians have used the azure of this land in the eyes of the statue of "Akhenaten" and "Queen of Hate".

Although some of the country's mines have been mined, lapis lazuli, gold and salt have been mined in Badakhshan, copper and iron in Kandahar and Kabul since ancient times; But there are still many mines in Afghanistan that have remained untouched.

The New York Times reports on Afghanistan's mines that the reserves of newly discovered lithium, iron, copper, cobalt and gold mines in southern Afghanistan are large enough to make the poor country one of the most important in the world. .

Some social media activists posted a video showing that only 70% of Afghanistan's mines are known and that it is one of the richest countries in the world. The American Mining Association sent its experts to Afghanistan a few years ago, and they returned home with strange statistics.

After several years of research and study, these experts estimated that the total value of Afghanistan's mines is equivalent to 1.5 trillion dollars. Afghanistan has various reserves of oil, coal, gas, iron, emerald, copper, gold, glass, silver, ruby ​​and turquoise, most of which have not yet been mined.

According to this picture, the northern provinces of Afghanistan such as Qandur, Faryab, Balkh, Sar-e-Pul, and Faryab are among the oil-rich regions of the country. Meanwhile, copper mines are mostly found in the northwest, south and east of Afghanistan.

So far, more than 12 copper mines in the areas of "Herat", "Farah", "Logar", "Kapisa", "Zabul", "Kabul", "Panjshir", "Kuhdaman", "Arghandab", "Maidan", " Bamyan and other parts of the country have been identified.

Livestock & Industry in Afghanistan

Afghanistan is an agricultural country with a high livestock capacity
Afghanistan is an agricultural country with a high livestock capacity

Afghanistan is an agricultural country with a high livestock capacity. According to some statistics, it has about four million cows and nearly twenty million goats and sheep. Afghanistan produces about 60 percent of its dairy products domestically. According to the FAO, Afghanistan had 170,000 camels in 2019 - 5,600,000 cows - 7,900,000 goats and 10.6 million sheep.

Industry in Afghanistan
According to the international standard classification of the field of activity, the industry includes mines, machine industries, electricity, gas, water, and construction. The value-added of this sector has reached 4 billion Afghanis in the year 1. The share of industry in GDP was 1.4 percent and its growth was -4.1 percent. The main contribution to the reduction of this sector is the reduction of mines and their extraction.

Afghan handicrafts also include carpet weaving, hand-woven carpets, rugs, felts, and coarse loosely - woven woolen cloth weaving, which are spontaneously available in the country. Afghanistan exports about 2.5 million square meters of carpet annually.

How are the Transportation ways of Afghanistan?

Import of Afghanistan
Afghanistan's imports in 2008 amounted to $ 8.27 billion. Afghanistan's imports are mainly textiles, petroleum products, machinery, and other capital goods, construction materials, and foodstuffs. Most imports come from Russia, the United States, India, China, Japan, South Korea, Germany, Kenya, Iran, and Pakistan. 

Afghanistan's imports are 5.3 billion per year (2008) compared to the rest of the world: 110th. Imports in 2007 amounted to $ 4.5 billion. Percentage of Afghanistan's imports by countries: the United States 29.1%, Pakistan 23.3%, India 7.6%, Russia 4.5%, Germany 4.2% (2010)

Ports of Afghanistan: Sher Khan Bandar, Hairatan, Aqua, Turghandi in northern Afghanistan, Islam Qala and Chabahar with Iran, Spin Boldak, Torkham and Gholamjan with Pakistan, in addition to these ports, other unofficial ports in Afghanistan exists but is not widely used; For example, Badakhshan-Tajikistan, Nuristan-Pakistan bridge, Kunar with Pakistan, Farah and Nimroz with Iran, etc. Recently, the Afghan government wants to build a port on land.

Exporting countries to Afghanistan
Top exporters to Afghanistan are Pakistan, the USA, India, Kazakhstan, and China. Most imports are in Asia, North America, Europe, Africa, South America, and Oceania, respectively. To which countries are Afghan goods mostly exported?

Data from the World Trade Organization (WTO) show that Pakistan and India are two of the main destinations for Afghan goods, with very large differences from other countries.

The two countries each receive 43% and 42% of Afghanistan's exports, respectively. India is followed by Iran (2%), Saudi Arabia (2%), Iraq (2%), Turkey (2%), UAE (2%) and China (3%).

From which countries does Afghanistan import more goods?
Although Afghanistan focused more on India and Pakistan in terms of exports, it is very different in terms of imports. Although the two countries still have a significant share in the country's imports, other countries, including Iran, also play a large role here.

According to the statistics of the World Trade Organization (WTO), in 2018, Afghanistan had the highest import of goods from country of Iran, which shows a golden opportunity for our country's traders. The map below shows the most important trading partners of this eastern neighbor in the discussion of importing goods in 2018.

Statistics show that this year Iran (17%), China (15%), Pakistan (14), Kazakhstan (10%), Uzbekistan (7%), Turkmenistan (5%), and India (4%) have played a greater role in supplying Afghanistan with imported goods.

What goods should we export to Afghanistan?
This is a question asked by many novice businessmen and traders. Here we intend to deal with the main groups of goods that are exported from our country to Afghanistan.

It seems that by looking at these statistics as well as comparing the two, we can answer the question of what goods to export to Afghanistan. We have used the latest customs data of the Islamic Republic of Iran as well as the World Trade Organization to obtain information on groups of goods exported to this neighboring country.

In the following list, we have mentioned the best goods for export to Afghanistan, which includes 10 popular products for export in 2018 from Iran to this country:

  • Oil, fuels, oil products
  • Iron and steel
  • Medical equipment, imaging equipment, and a variety of machines
  • Types of vegetable and animal oils
  • A variety of edible vegetables and fruits
  • Types of minerals, gypsum, cement, and mica
  • Plastic products
  • Types of machines
  • Glass and glassware
  • Home appliances

According to the customs statistics of the Islamic Republic of Iran, most of Iran's exports to Afghanistan through the customs of Mashhad, Arak, Dogharun, Milk Bazaar, Kaveh Special Zone, Milk, Pars Special Economic Zone, Mahirood Bazaar, west of Tehran, Isfahan, Yazd, respectively. And other customs of the country.

Reasons for increasing Iran's exports to Afghanistan

The high quality of Iranian goods compared to Pakistani goods, the insecurity of Pakistani roads are the reasons for the increase in Iran's exports to Afghanistan. Economically, this country in the Middle East is dependent on foreign countries and is one of the poorest countries in the world, with the help of countries Like Iran, its economy has grown. 

The average export to Afghanistan ten years ago was one hundred million dollars, but now it has reached more than one billion dollars a year. According to Afghan officials, Iran's exports exceed these figures are estimated. Construction materials, electronics, carpets, foodstuffs, and detergents are among the most important Iranian goods for export to this country. While the Iranian authorities estimate the number of exports a little over one billion dollars. 

But some Afghan officials have estimated Iran's exports at about $ 10 billion a year. According to the free market system, exports of Iranian goods to Afghanistan will continue to grow. According to statistics, at the beginning of 1994, there were about 2 billion and 100 million dollars in exports to Afghanistan, and now, Iran's exports to this country are more than two and a half-billion dollars, and it is predicted that in the coming years the amount of exports to this country reach about $ 4 billion.

The countries of the Persian Gulf and the countries that are members of the SAARC organization have potential markets for attracting Afghan exports, but at the same time, to some extent, these countries compete with Afghan products in regional markets. China and India are growing rapidly and their economies are changing rapidly. 

The two countries have become very powerful in the field of production and various service sectors, and their actions, including in the field of finance, have a significant impact on the international activities of their Central Asian neighbors. Afghanistan needs to pay close attention to the trade and investment channels that these two countries may offer. 

Although the general foreign trade environment is full of fluidity and uncertainty, there are some foreign markets in which Afghanistan can operate sustainably. Afghanistan's exports to European countries currently account for 12 percent of the country's total exports and are exempt from tariffs and quotas under a program called "All Goods, Arms and Ammunition". Other major markets, such as the United States, Chapman, Canada, and China, also have better conditions for exporting Afghan products than products from other exporting countries. 

India, both as a member of the World Trade Organization and as a developing country in the South Asian Free Trade Agreement (SFTA), has considered some important and preferential advantages, such as the Customs Tariff Preference Program for Less Developed Countries. And Afghanistan can benefit from this program, but even these elements of stability face limitations, including strict rules on the source document, and doubts about future demand developments, at least in some of these economies. 

Recently, land-based trade is of paramount importance for landlocked Afghanistan. Fortunately, Afghanistan connects with neighboring countries and other countries through air corridors and signs agreements such as Chabahar with Iran and India. In 2016, the signing of an agreement with Uzbekistan in late 2017, the Azure Road Agreement with Azerbaijan, Georgia, Turkey, and Turkmenistan, and the opening of the Chabahar port have been very effective steps. 

Increasing Afghanistan's exports, including Effective implementation of the above agreements, has been developed. Afghanistan currently exports several commercial shipments from the port of Chabahar to Mumbai, India, and in early 2019, commercial shipments of marble and fresh fruits were shipped via the Lajurd route to Turkey and exported to Azerbaijan.

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