Afghanistan tries to lure investment
27 February, 2013
KABUL: To meet its objective, the Afghan Finance Ministry has drafted a package of incentives to assure companies and individual that their investments in Afghanistan will be safe after the expected withdrawal of Western troops in 2014.
Outlined in a bill facing a parliamentary vote in February, the incentives would reward those who invest in the country over the next two years with significant tax breaks and the right to purchase land for a symbolic price.
Najibullah Manalai, an adviser to Finance Minister Omar Zakhilwal, says the manufacturing, mining, and agricultural sectors would be the most likely areas of investment.
According to the Afghan National Bank, at least US$4.6 billion has been taken out of Afghanistan in the past year, a development that has been attributed to fears over increased insecurity and corruption after the 2014 pullout, Asia Times quoted a report by Radio Free Europe/Radio Liberty report as saying.
Manalai downplays the impact the withdrawal of the North Atlantic Treaty Organization will have on the Afghan economy, but he acknowledges the incentive package is intended to "minimize such economic effects".
"We don’t think there would be a major economic impact, but we are concerned about such speculation in the mass media," he says.
"Such speculation could easily lead to economic downturn. So our aim is to counter such speculation and also to attract investors to Afghanistan over the next two years, which is a sensitive period."
According to Finance Ministry spokesman Wahid Tawhidi, the goal is to entice entities willing to invest at least $1 million each into the country’s ailing economy.
"Investors will be exempt from tax and customs duties for the next 10 years," Tawhidi says.
The spokesman says that companies would effectively be given land free of charge and electricity would be made available at a fraction of the current rates.