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Understanding Markets in Afghanistan

Founder(s): DFID; World Bank
Status: Completed

“There is a persisting misconception that the conflict and Taliban period left the Afghan economy as a ‘blank slate.’”
In 2004-05, AREU researched the markets for carpets, raisins, construction materials, petroleum fuel, second-hand vehicles and pharmaceuticals in Afghanistan. These case studies sought a greater insight into the experience of Afghan businesses in both import and export markets, and examined factors including trade routes, market players, the choice of products on offer and the role of the state.
The research revealed a series of often vibrant markets characterised by a wide choice of products and the presence of multiple players. However, margins are often tiny and markets tend to be dominated by a few powerful businesses or individuals. Confused regulations, corruption and low capacity on the part of state regulators present a major obstacle to growth. Although the country has great potential to act as a hub for regional trade, cross-border transactions are regularly held up by a similar degree of bureaucracy and red tape.

Publications from this research project:

Going to Market: Trade and Traders in Six Afghan Sectors

In 2004 and 2005, the Afghanistan Research and Evaluation Unit undertook a series of focused studies of commodity chains in six key sectors to gain an insight into the experience of Afghan businesses. Specifically, the studies investigated trade routes for Read More

Understanding Markets in Afghanistan: A Study of the Market for Pharmaceuticals

This case study examines the experiences of Afghan businessmen in the private market for pharmaceuticals, where the greatest margins are made, what connections there are between market players and what, if any, barriers are faced by new entrants.

Understanding Markets in Afghanistan: A Study of the Market in Petroleum Fuels

This case study examines the experiences of Afghan businessmen in the private market for petroleum fuels, where the greatest margins are made, what connections there are between market players and what, if any, barriers are faced by new entrants.

Trading in Power: The Politics of Free Markets in Afghanistan

This briefing paper is based on the findings from a World Bank-funded study of markets related to three industries: construction materials, raisins, and carpets. The study found that a small group of businessmen with close links to political and military Read More

Understanding Markets in Afghanistan: A Case Study of the Raisin Market

This case study examines Afghanistan’s raisin market, looking at where the greatest margins are made, what connections there are between market players and what, if any, barriers are faced by new entrants.