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Implementation of economic reform agenda govt top priority: CEO

Implementation of economic reform agenda govt top priority: CEO

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Nov 22, 2018 - 15:08

KABULinfo-icon (Pajhwok): Chief Executive Officer (CEO) Abdullah has said the economic reform agenda which placed a special focus on private sector development, improving the business environmentinfo-icon and expanding trade, especially exports remained the Unity Government top priority since 2014.

Addressing the Organisation of Economic Cooperation and Development (OECD) Conference in Paris, France, the CEO said:  “Our challenge from the start was to transition from a centralised state-owned economic system to one where the private sector can become the engine of growth, productivity, connectivity, job creation and revenue generation. We also agree that the private sector is a key driver in achieving the SDGs.”

The Worldinfo-icon Bank he said just recently recognized Afghanistaninfo-icon as a top reformer under the Doing Business Report 2019 among 190 world economies, as Afghanistan’s ranking jumped from 183 to 167.

“Thanks to new land and air corridors our exports have increased by 40%, showing more dynamism from our private sector in opening new markets abroad. The economy is growing – and we want the growth rate to further increase in the coming years,” he noted.

“However, we still have a long way to go. There is significant room for urgent reform action, especially improving the enabling environment for our micro, small and medium businesses, supporting their ability to meet domestic demand in a more meaningful way while placing greater focus on expanding and diversifying our export baskets and markets. And there is the challenge of fighting corruption and the illicit economy,” he noted.

Abdullah the ECDO participants that the private sector in Afghanistan has grown remarkably in size and scope compared with the early 2000s when the private sector structurally did not exist in a major way.

It was now time to build on the achievements of the past years and put our focus on the sectors that can have the largest impact in terms of job creation, income generation and production for both domestic demand and foreign markets, he remarked.

According to CEO an essential component for reaching that goal was to turn attention to small and micro businesses, which so far have not received sufficient attention but make up a big part of our private sector. Some of the key challenges of this sector included:

• Operation in the informal economy, which creates challenges for public service delivery to them, creating fewer employment and generating tax revenue from their business activities

• The delivery of essential services to small and micro businesses are rather costly in terms of time and money

• Limited access to finance, land, electricity, skilled labor, regional markets and certification are major barriers for the growth of these businesses

• Inability to adequately meet the domestic market demands

• Unnecessary compliance burdens imposed by the regulatory environment

To overcome the challenges, he said the government had already started implementing reforms to improve the business climate, boost private sector development and grow the exports.

“We are also making sure that womeninfo-icon entrepreneurs heads of households can benefit from the reforms and new policies,” he said. 

He added the first time ever, the government had created the Private Sector Development Executive Committee (PRISEC) as a high-level interagency mechanism that brings together the private sector, government and our international partners under a single umbrella.

“Examples of our recent efforts to address the challenges that our business community faces include: Approving and implementing a National Export Strategy, National Trade Policy, reforms for the DBI and the development and implementation of a National Priority Program for Private Sector Development (NPP PSD), 2018-2023,” he said.

It was worth mentioning that the NPP PSD was demand-driven, time-bound and budgeted.

According to the CEO the private sector development and business-to-business partnership development had been incorporated into our regional cooperation agenda under the Regional Economic Cooperation Conference on Afghanistan (RECCA) and the Heart of Asia – Istanbul Process (HoA-IP).

 Abdullah said: “through an excellent collaborative effort with the OECD and strong support from the EU, we are boosting the private sector development and entrepreneurship polices in the country, specifically to provide an enabling environment for the growth of the micro, small and medium enterprises,” he said.

Three technical workshops have been held under this program and the outcome is a peer-reviewed set of recommendations identifying pressing barriers to businesses and proposing actions to address them on three specific dimensions: (1) business formalization, (2) access to finance, (3) digitalization of government services for businesses.

“On behalf of the Afghanistan government, I welcome these recommendations,” he said.

To achieve the solutions proposed in this peer-reviewed paper, the government is committed to taking the following concrete steps:

(1) Include the core recommendations into the National Priority Program for Private Sector Development

(2) Develop a long-term development framework specifically for Medium, Small and Micro enterprises

(3) Update our e-governance strategy. We have made good progress in the telecom and information technology sector and can now take those capabilities and connectivity to the field of service delivery.

(4) Give more urgency to tackling those barriers that currently limit access to finance for businesses

(5) Continue our efforts to improve our Doing Business ranking. In this year’s ranking, the World Bank recognized the reform actions Afghanistan implemented and gave it the coveted spot the top reformer.

(6) Improve public-private dialog through existing platforms such as PRISEC, Council of Ministers, Cabinet and other government mechanisms and also at a regional level through RECCA and HoA-IP.

“With a new generation of young reform-minded individuals in the government, we have a better opportunity and greater ability to be more effective in delivering on our economic reform promises, creating jobs, generating revenue and becoming more self-reliant,” he noted.

“Therefore, on behalf of the government of Afghanistan—and I believe tens of thousands of members of Afghanistan business community—I invite the EU and the OECD to seriously consider and, if possible, commit to a long-term technical partnership as a part of its Eurasia Initiative and other programs that will extend all the way to 2025 or 2030. Structural reforms of the nature recommended usually succeed when a long-term approach and strong political will are given,” the CEO said.

 “We head soon to the Geneva Ministerial on Afghanistan and review our overall commitments and benchmarks with the donor community, I thank every participant, stakeholders from the business community, the OECD, EU delegation, USAIDinfo-icon, IFC/World Bank Group for their contribution and support to this work,” he concluded.

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