Afghanistan Economic Outlook
February 2023
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Afghanistan Economic Outlook, is a creative initiative of the Afghanistan Economic and Legal Studies Organization (AELSO) which reflects most important & the latest economic events that happened during a month in Afghanistan.
By reading this economic newsletter, that has designed in three languages (Pashto, Dari & English), you can get a wider overview of Afghanistan’s economic situation.
2.7M Tons of Coal Exported in Past 10 Months
The ministry’s information indicates that the export of coal earned more than 12.5 billion afghanis in customs revenue.
“In the first ten months of 1400 (the solar year), nearly 948,000 tons of coal were exported, from which 1 billion and 893 million Afghanis were received as customs income, but in the first ten months of 1401, nearly 2.7 million tons of coal were exported through the customs of the country, from which 12 billion and 143 million afghanis were received as customs income,” the Ministry of Finance said in a statement.
“The figures released by the Ministry of Finance, stating that nearly 2.7 million tons of coal are exported abroad, are accurate,” said Mohammad Rasoul Tutakhail, head of the Coal Exporters’ Union.
Meanwhile, several Kabul coal sellers said that the price of coal has dropped in the nation’s markets.
“This year’s winter was colder, and the cost of wood and coal increased. The weather is getting warmer right now. Previously, the price of coal was between 16,500 and 16,500 afghanis a ton, but it is currently between 12,000 and 12,500,” said Nasratullah, a coal vendor.
“In the past, the price of coal was 15,000 a ton, but now it is 12,000,” said Nadimulhaq, another coal seller.
According to statistics from the Ministry of Finance, over 950 thousand tons of coal were exported in 1400 (Solar year).
Afghan Assets Made $70 Million in Interest: Mehrabi
Shah Mohammad Mehrabi, Central Bank supreme council member and board member of the Afghan Trust Fund in Switzerland, said that the $3.5 billion fund–including $36 million and $34 million in interest–should be used for achieving monetary stability and reducing volatility in the Afghan currency exchange.
“During the meeting, the board took decisive actions to further operationalize the Afghan fund with a focus on protecting and preserving its assets on behalf of the Afghan people. The board agreed to seek external funding to cover the Afghan fund’s operational expenses. At the same time, they decided to allocate a specific portion of the fund’s annual interest earning towards essential operational costs,” he said.
The Ministry of Economy, Abdul Latif Nazari, said that the freezing of the Afghan assets has affected the country’s economy.
“The freezing of the Afghan assets in foreign banks inflicts various types of impacts on the improvement and development of the Afghan economy. We demand that these assets and its interests be handed over to the Islamic Emirate,” he said.
Economists said that the interests of the Afghan assets should be used to stabilize the afghani currency and international debts.
“The assets and its interests are used for monetary stability and price management and also for the payment of international debts,” said Meer Shikib Meer, an economist.
“This money is going to help the government or rulers of Afghanistan indirectly. One of the goals is to help with the humanitarian issues and payment of expenses,” said Sayed Masoud, an economist.
The Afghan trust fund was established in September 14th of 2022 and is intended to preserve and manage the $3.5 billion Afghan assets in Switzerland
Khawaf-Herat Railway to Open in One Month
The Afghanistan Railway Authority (ARA) said that with the start of activity on the Khawaf-Herat Railway, work will be provided for nearly 5 thousand people.
(ARA) said that transportation of materials on this railway will start in one month.
According to the railway authority, the Iranian Railway Technical Group has taken responsibility for the reconstruction and elimination of the technical problems of this road.
“With the start of the activity on the Khawaf-Herat Railway, five thousand Afghans will find jobs and we hope that this work should begin in Hamal (a month away) and the ARA has prepared for the arrival of the rail,” said Abdulsami Durani, spokesmen for ARA.
Economists said that Khawaf-Herat has an important role in the country’s economic development.
“Khawaf-Herat railway will shorten the way for exports and imports, and create diversity in transit options,” said Sakhi Ahmad Payman, deputy of the Chamber of the Industry and Mines.
“It’s the cheapest way after sea transportation and has an important value for a country as landlocked as Afghanistan,” said Azrakhsh Hafizi, an economist.
“Khawaf-Herat is a good achievement and a positive step for traders,” said Basir Taraki, an economist.
'Efforts Continue to Resume World Bank Projects in Afghanistan': MoF
The Islamic Emirate’s Ministry of Finance said that efforts are being made to resume World Bank projects in Afghanistan following David Malpas, the president of the World Bank, announcing that he will leave his position in June.
The World Bank supports programs in Afghanistan in the areas of health, agriculture, rural development, and other sectors, the ministry said, adding that the bank has begun working on a number of these projects.
“There are some projects whose work has been completed from 90 to 95 percent, and all of them have been suspended. The Ministry of Finance has been working with all the donors since the Islamic Emirate took office to convince the World Bank to come and begin its unfinished projects,” said Ahmad Wali Haqmal, the ministry’s spokesperson.
“They should focus on the production and employment sectors through financial support of development projects. The economic status of our people can be improved more effectively,” said Abdul Rahman Habib, the Ministry of Economy’s spokesperson.
Economists said that the World Bank’s support for Afghanistan over the last 20 years has been crucial and that the bank’s new leadership won’t have an impact on America’s financial goals.
“The World Bank is one of the major sources of funding for large-scale projects and budgets in Afghanistan, and it has previously provided remarkable assistance and such effects across the whole world,” said Sayed Masoud, an economist.
“The World Bank has played a major role in Afghanistan’s economy, notably during the past 20 years. Also, since David Malpas took over as World Bank president, he has made crucial decisions about various projects in Afghanistan that have been effective for the Afghan economy,” said Seyar Qureshi, another economist.
US Treasury Secretary Janet Yellen praised Malpas’ four years of service at the World Bank and said that the world has benefited from his strong support and vital work to help the people of Afghanistan and low-income countries.
David Malpas, who was nominated in 2019 for a five-year term by President Donald J. Trump, has overseen an organization that lends billions of dollars each year to poor countries grappling with health crises, hunger, conflict and a warming planet.
Pakistan Says Afghan Situation 'Poses Challenge' to Its Central Asia Trade
The Pakistan Minister of State for Foreign Affairs Hina Rabbani Khar said that the “political situation coupled with the threat of terrorism poses a challenge” to economic and trade relations of Pakistan with Central Asian nations.
Khar made the remarks at a one-day international conference on Pakistan’s Strategic Frontiers via a video link, organised by the Institute of Strategic Studies, Islamabad (ISSI).
“Afghanistan offers immense opportunities in terms of realization of Pakistan’s vision to becoming a trade and energy connectivity hub and integration of South, Central, and Western Asia regions. However, the current political situation coupled with the threat of terrorism poses a challenge for the countries around the same region,” she said.
This comes as the Afghanistan Chamber of Commerce and Investment (ACCI) said that Afghanistan has an important role in terms connecting Central and South Asia.
“When the Islamic Emirate swept into power, the policy was to connect Central Asia with South Asia. The first gates are Pakistan and Afghanistan, and also Uzbekistan, Turkmenistan and Tajikistan. There have been contracts about this as well,” said Khanjan Alokozai, a member of the ACCI.
“We export some commodities as barter, so there is no negative impact, but there are some commodities which we export to Pakistan and we sell it with Pakistan rupees. Which has some negative impact,” said Naqibullah Sapai, head of the joint Chamber of Afghanistan-Pakistan.
This comes as some of the economists believe that the use of Pakistan rupees (Kaldar) in trade with Pakistan has impacted Afghan trade.
“Our exports are mainly to Pakistan. When they are unable to purchase the commodities, the certain exports that we export to Pakistan will be hampered. The loss of value of Kaldar (Pakistani rupees) affects the loss that our people made in Kaldar,” said Azeraksh Hafizi, an economist.
Afghanistan exported more than $1 billion worth of commodities in 1401 (solar) year. Nearly $744 million has been exported to Pakistan.
PM of UAE Visits Exhibit of Afghan Products in Dubai
Sheikh Mohammed bin Rashid Al Maktoum, the current Vice-President and Prime Minister of the United Arab Emirates, visited the Mira exhibit where Afghan products were displayed, WAM, an Emirati news outlet reported.
Launched over a decade ago, Mira represents independent farmers from across Afghanistan who grow organic fruits, nuts and saffron without the use of any harsh chemicals or preservatives, the report said.
The Afghanistan Chamber of Agriculture and Livestock said the foreign exhibitions are important to increase markets for Afghan products.
“The more the exhibitions are being held, particularly in UAE states and other warm climate countries, which need the Afghan agriculture products, the better it is. The Afghan pine nuts and saffron are famous,” said Mirwais Hajizada, deputy of the ACAL.
The Afghanistan Chamber of Commerce and Investment (ACCI) said that an exhibition is expected to be held in the UAE but the traders cannot attend due to lack of visas.
“The serious problems in our exhibition, particularly to Dubai, are due to visas. The visa issuance has been difficult. Those who are living there, they can participate. We ourselves cannot attend from Afghanistan,” said Khanjan Alokozai, a member of the ACCI.
According to the ACCI, the natural plants, carpets, dry fruits and precious stones are the main exports of Afghanistan and the exhibitions include mostly these products.
Haritan-Mazar Railway Resumes After 10-Day Closure
The transportation of commodities via the Haritan-Mazar e Sharif railway began on Friday after a 10-day closure.
After three-days of negotiations between the delegation of the Islamic Emirate, led by the acting head of the Afghanistan Railway Authority, and officials from Uzbekistan, an agreement was signed between the two sides that also laid out the reopening of the Haritan-Mazar e Sharif railway.
The ARA on Twitter said around 50 cars full of commercial goods have arrived in the country via the rail line.
A spokesman for the ARA, Abdul Sami Durani, said that the delegation that traveled to Uzbekistan agreed to prepare a draft of an agreement to hand over the responsibility for the management of the railway to Afghanistan.
“After detailed discussion, the two sides agreed to handover the responsibility for management of the Haritan-Mazar e Sharif railway to Afghanistan,” said Abdul Sami Durani, a spokesman for the ARA.
This comes as the Afghanistan Chamber of Commerce and Investment (ACCI) said that the Haritan-Mazar-e-Sharif railway plays an important role in the transit of commodities from South Asia to Central Asia.
“The transit between South and Central Asia is conducted via Haritan port which can also make a good income for Afghanistan,” said Khairudin Mayal, a member of the ACCI.
This comes as the traders say the railway of Haritan-Mazar-e-Sharif is essential for their commercial activities.
“Our government should further focus on the commercial paths, so that we can at least use these routes which can be effective in the reduction of prices and economic rotation as well as relations among the regional countries,” said Mabobullah Mohammadi, a trader.
80 percent of Afghanistan’s trade with Central Asia is conducted through this rail line
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