The efficient movement of people and products is an essential prerequisite to a prosperous economy, which is why the Afghan Government is moving swiftly to connect all parts of Afghanistan to each other and to neighboring countries.
In the interest of expediting economic growth, multiple projects have been prioritized to accelerate development of national infrastructure.
The tri-nation Chabahar Port Agreement signed between Afghanistan, Iran and India will create a transport-and-trade corridor through Afghanistan and gives the country its first-ever access to a deep-water port.
The Atta Morad-Aqina international railway line was inaugurated in 2016, linking Afghanistan to Turkmenistan and other central Asian countries.
On September 7, 2016, the first train from China arrived in Afghanistan as part of the Five Nations Railway Corridor connecting China with Iran. More than half the corridor’s 2,100-kilometer track will pass through Afghanistan.
Improving roads across Afghanistan, including their maintenance, is another key priority. The Kabul municipality is planning for the construction of a 610 km network of new roads, which will make getting around the more populated capital region faster and easier.
In addition, the Ministry of Public Works hopes to begin building 1000 km of new roads annually and repairing existing roads in a more efficient manner. In May 2017, construction began on a major new road in northeast Badakhshan province near the Tajik border that will cover 108 km, with an expected completion in 2021. In addition, work on the first-ever metro bus project in Kabul started in June 2017 and is expected to be operational in 2018.
USAID POWER TRANSMISSION EXPANSION AND CONNECTIVITY (PTEC) PROJECTAfghanistan: www.usaid.gov/news-information/fact-sheets/power-transmission-expansion-and-connectivity-ptec-project-0
RECCA Five Nations Railway Corridor: http://recca.af/?page_id=2086
Railway Pro, Five Asian countries to implement a new railway corridor, (September 2017): http://www.railwaypro.com/wp/five-asian-countries-implement-new-railway-corridor/
Asian Development Bank, Video of Afghanistan Railway: https://www.adb.org/news/videos/development-comes-train-afghanistans-northern-regions
Linking Afghanistan to China's Belt and Road: http://thediplomat.com/2017/04/linking-afghanistan-to-chinas-belt-and-road/
With Chabahar Text Finalised, India’s Dream of a Road to Afghanistan Gathers Speed https://thewire.in/29174/with-chabahar-text-finalised-indias-dream-of-a-road-to-afghanistan-gathers-speed/
Life Improves for Thousands in Rural Afghanistan with Upgraded Infrastructure in Villages http://www.worldbank.org/en/news/feature/2017/09/25/life-improves-for-thousands-in-rural-afghanistan-with-upgraded-infrastructure
Kabul Municipality Unveils First Metro Bus System, Signs Road Building Contract http://www.tolonews.com/business/kabul-municipality-unveils-first-metro-bus-system
“Afghanistan can be an appropriate place for U.S. industry, and specifically the mining sector, to look at opportunities for investment” because so few potential deposits have been mined, said Mohammad Humayon Qayoumi, chief adviser to Afghan president on infrastructure, human capital and technology. “Afghanistan has always been interested in the U.S. investing in many areas, specifically the mining area. Within mining, there are some areas that are strategic materials such as lithium.”
Afghanistan is very unique based on its vast mineral resources. The extractive industries, such as mining and hydrocarbon development, play an increasingly important role as drivers of economic growth in Afghanistan. The current valuation of hydrocarbons in Afghanistan is $124.6 Billion USD. The current valuation of minerals in Afghanistan is approximately $604 Billion USD for just the following minerals:
Rare Earth Elements (REE), often called “the oil of the 21st century,” are a set of seventeen metallic elements vital to industrialized societies worldwide and used to produce a range of sophisticated technological products. Significant quantities of REEs are used in the production of clean energy technologies (e.g., advanced auto batteries, electric motors, high-efficiency light bulbs, solar panels and wind turbines.) Many modern defense technologies such as radar and sonar systems, precision-guided weapons, cruise missiles, and lasers cannot be built without REEs. REEs also provide core functionalities to a variety of high technology applications in computing, pollution abatement, power generation, water treatment, oil refining, metal alloying, communications, health care, agriculture, and other sectors.
Strengthening the mining and minerals sector is a top priority for the Afghanistan government and will require sustainable development through transparent tendering and effective monitoring. According to the Afghanistan’s National Peace and Development Framework (2017-2021), the government’s goals for the mining and minerals sector include:
Afghanistan Geological Survey Data Center in Kabul (http://mom.gov.af/en/, http://www.bgs.ac.uk/afghanminerals/) and for viewing and download on the USGS public Web site (http://afghanistan.cr.usgs.gov/)
USGS Summaries and Data Packages of Important Areas forMineral Investment and Production Opportunities in Afghanistan https://pubs.usgs.gov/fs/2011/3108/fs2011-3108.pdf
“There is a long-term potential to change Afghanistan from an importing and agrarian country to an agro-industrial exporting nation.” - Afghanistan National Peace And Development Framework (ANPDF 2017 - 2021)
According to the Afghanistan National Peace and Development Framework(ANPDF), economic growth is expected to continue improving through 2017, reaching 6 percent by 2020. This GDP growth is led by the agriculture sector.
Significant multi-sector investments in agriculture are therefore needed to drive the country’s overall economic growth. Such investments include: irrigation resources and water management; improved planting materials and seeds; better use of farm technologies and best practice; development of value chains to provide producers with incentives to invest; improved urban-rural linkages; increased storage and cold chain facilities; and utilization of air corridors that could be used to transport Afghan agricultural goods to higher value markets. Making these investments could result in a shift from an importing and agrarian country to an agro-industrial exporting nation.
Agriculture is also a key job creator in Afghanistan. Currently, agriculture employs at least 40 percent of the population. The World Bank estimates that a key challenge for the country will be employment generation over the next ten years, investing in the growth of agriculture, a labor-intensive sector, not only contributes to the country’s development but also creates needed jobs.
Afghanistan is the world’s largest producer of opium and in 2017 harvested a record crop that more than doubled production from the previous year. The U.N. Office on Drugs and Crime estimated that opium accounted for some 16 percent of Afghanistan’s GDP in 2016. The prosperous drug trade fuels criminal and terrorist activity and is a threat to state legitimacy. Rule of law-related challenges, including insecurity and corruption, and lack of alternative employment opportunities, are the main drivers of illicit cultivation. The current government has a five-year plan to work to provide alternative livelihoods for farmers, while enforcing laws against money-laundering and drug trafficking.
In October 2017, Afghanistan’s Ministry of Finance submitted its 2018 budget to the Meshrano Jirga (Upper House of Parliament) and then presented it to the President. The budget, as of December 2017, is pending final ratification. The 2018 national budget addresses the reform agenda and other government priorities, having been arranged according to global standards. Transparency surrounding this standardized budget has been of paramount importance to the government as it seeks to increase public confidence and prevent delays previously experienced with projects.
Based on statistics from the Afghan Ministry of Finance, the total budget for 2018 is more than 357 billion AFs (approximately 5.2 billion USD), of which more than 267 billion AFs (approximately 3.9 billion USD) will be used to fund the government and over 90 billion AFs (approximately 1.3 billion USD) will be used for development purposes. More than half of the national budget will be funded by external resources in 2018, with the remaining $2.3 billion generated from domestic revenue sources.
TOLO News, Finance Minister Presents Draft Budget For Next Year (November, 2017) http://www.tolonews.com/business/finance-minister-presents-draft-budget-next-year
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