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Pandemic tips Afghanistan into economic recession

By Farhad Naibkhel

The outbreak of Covid-19 has devastated Afghanistan’s economy, unleashing a plethora of commercial and financial restraints which are proving to be fatal both economically and socially. Trade and business has been brought to a standstill almost entirely, with hundreds of thousands losing their jobs or paltry livelihoods in lockdowns and the shutdown of cities.

A few cases of infections which were first spotted in Herat province – which were imported from neighboring Iran – has severely infected the Afghan people’s economic condition. Following the increase of covid-19 cases, the government has enforced the lockdown in the capital city, Kabul and some other big cities to avoid the further spread of the virus. Afghanistan’s neighboring countries closed their borders and gates, facing the country’s fragile economy to broken situation. Deputy of Afghanistan Chamber of Commerce and Industries (ACCI), Khanjan Alkozai in an interview with Afghanistan Times said that due to the outbreak of coronavirus and lockdowns enforcements, the country’s business and commercial deals were falling down.

Many factories have stopped working and markets and business deals remained closed during this lockdown, he said, adding the exports and imports as well as commercial deals have been significantly decreased in the past two months comparing to the same period of the last year.

Mr. Alkozai said that daily traders used to be sold 3,500 liter oil and 4,000 tons of sugar in the markets but now the markets sells around 500-1,200 tons on a daily base.

Afghan traders have been failed to do export as the transit gates and borderlines are closed against the trade and commerce with the neighboring countries.

Though, the Torkham and Spin Boldak gates are opened for trade, Mr. Alokozai said that Islamabad has only allowed one-way transit trucks for import, adding that the Afghan government should discuss with the Pakistani officials to allow the Afghanistan exports to the country.

He has expressed optimism about the trade ties with the central Asian countries — Kazakhstan, Turkmenistan and Uzbekistan, saying that the commercial deals are in a usual rate with these countries.

In the past, Afghanistan was mainly exporting dry fruits, carpets and some minerals but unlike last years, the country is producing fresh fruits and vegetables which are needed to be export, he said.

As Afghanistan transports most of its export throughout Pakistan, Mr. Alokozai called on the Afghan government to facilitate commercial opportunities for the Afghan traders to carry the exports through Pakistan and other neighboring countries. The export of Afghanistan goods and corps would boost up the income of Afghan formers and traders, he said. 

Citing the Afghan peace process, Mr. Alokozai said that the Afghan government is paying focus on peace negotiations, while economy and the challenges that Afghan traders face is, also a big matter of concern.

As Afghanistan is an agrarian country and the agriculture and gardening industry is a good source of income and job opportunity for people, it is essential to the government to support the agriculture and garden harvest and pave the ground for the traders to transport the Afghanistan exports to the national and international markets on time, he added.

He said that the government should temporarily remove tariffs and taxes on food and some other items which are considered as an essential need for the traders and people.

He expressed concerns over lack of proper and transparent system in the custom offices, saying that the system has paved the ground for the administrative corruption that forces the traders to engage in corruption as well.

Government must boost up facilities and make a clear and transparent system to help traders, he asserted.

Meanwhile, Spokesman for the Ministry of Finance, Shamroz Khan Masjedi confirmed the reduction of exportation, imports and business deals during the outbreak of coronavirus in the country. As the exports, imports and business deals are falling, he said that Afghanistan has lost 10-billion AFS in revenue. 

Referring to the challenges of the Afghan traders, Masjedi said that efforts are underway to gradually make- up facilities in the custom offices.

Hinting to corruption, he said that unfortunately corruption is a mutual issue, both government employees and traders are involved in it.

The traders are not accurately processing their document and this paves the ground for corruption, he added.

He stated that unfortunately corruption is a challenge not only in the Ministry of Finance but in some other administration as well.

He insisted that the government hold steps as well as exerting utmost efforts to eliminate corruption but it will take time.

Masjedi called on the private sectors to cooperate with the government to combat corruption.  Without cooperation of private sectors, the government will have a long and complicated way to eliminate corruption, he asserted.

Finance Ministry has adopted efforts in different aspects based on its possibilities to foster facility, but it needs more infrastructure and investment, which gradually will be achieved, he added.

Regarding tariffs and taxes, Mr. Masjedi said that the private sectors, including the Afghanistan Chamber of Commerce and Industries has the membership of tariff‘s committee and that all goods which are named by the private sectors must be assessed to modify that how much we can help domestic sectors and how much is the need of market, because we cannot accept all demands of the importers or producers.

The Ministry of Finance or government are not taking the decision by themselves regarding the issues of tariffs, he said, adding that these decision are made in a joint committee, in which private sectors are also existed and have the membership.

Similarly, spokesman for the Ministry of Commerce and Industries (MoCI), Sameer Rasa said that there is no exact data about the reduction of imports, exports and commercial deals during the outbreak of coronavirus but it certainly had negative impacts in on trades and markets.

According to him, this month Afghanistan exports particularly fresh fruits and vegetables would be started, as the preparation has been already underway in this regards.

On the other hand, many food item, fruits, vegetable sellers and those vendors and street sellers, who did not seriously follow the lockdowns and health ministry precautionary recommendations in capital city, complained about lack of good markets and less incomes.

Also, the majority of people, who are work in the construction fields particularly those who working for daily wages, lost their jobs after the pandemic virus spread in Afghanistan.

The first case of Covid-19 in Afghanistan was reported on February 24th in western province of Herat and the first death was recorded on 22nd of March in the northern province of Balkh.

As coronavirus cases increased and spread in many provinces of the country, including capital later on by March 27th, the government approved a three-week lockdown in Kabul to reduce vulnerability of coronavirus, however the lockdown was extended for several week.

According to the Ministry of Public Health, the total number of Covid-19 cases as far today, has reached to 14,525 in Afghanistan with 1,209 recovery and 235 deaths.

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