01 Dec Understanding Markets in Afghanistan
“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.