Economic Overview
In spite of the country's instability and the global economic crisis, Afghanistan has shown during these past years a GDP growth rate higher than 7%. Its growth in 2010 was very strong (15%) mainly fed by the large construction projects financed by the sponsors of international funds and by the income generated from illicit productions, mainly opium poppy cultivation, which represents 90% of the global production: the reconversion of this sector, however, is one of the priorities of the national and international authorities in 2011.
The bad condition of the infrastructures, military tensions, a poor legislation system and the high level of corruption remain as the main obstacles to the economic development of the country. The country has established as its new priorities - with the help of its economic sponsors (the World Bank, IMF and Paris Circle) - to maintain a macro-economic stability, to support economic growth and the reduction of poverty.
Afghanistan remains a very poor country (it is one of the last 15 countries in the global classification of GDP per capita in 2011), where the population must face unemployment, poor sanitary conditions, insubstantial basic infrastructures (health, water, electricity) and insecurity.
FDI in Figures
Statistics in relation to FDI are not available and/or not reliable. According to the UN (in the 2010 World Investment Report), the share of FDI in Afghanistan's GDP was 9% in 2009, most of it represented the public investments financed by international aid.
According to Afghan law, all foreign companies have the same investing opportunities as the domestic ones. However, the political violence, weak regulations regarding property protection, a substantial lack of skilled manpower, under-developed financial markets and insufficient infrastructures limit the potential attractiveness of the country.
More than half of FDI is concentrated in the construction sector and the rest is divided in equal parts among the industry and the services. Turkey is the largest investor, followed by the United States, China and the United Arab Emirates.
Foreign Trade Overview
After the collapse of the Taliban government in 2001, Afghanistan has opened up to international trade. Afghanistan has very few commercial barriers for imported products, but the infrastructures are in bad condition, a legal and commercial framework is still being developed, a constant risk of armed violence and a volatile security situation are real trade barriers.
The trade deficit reached USD 3.67 billion in 2010 and it gets deeper under the effect of the imports of consuming goods and equipment aimed to relieve the challenges of the reconstruction. In 2011, exports should stabilize at about USD 530 million (fruits and nuts, hand woven carpets, wool, cotton, leather and furs as well as precious and semi-precious stones).
As for Imports, they should remain at the same level as in 2010, which was USD 4.2 billion (they are equipment goods, capital goods, agriculture supplies, rice, wheat, textiles and oil products).
The main export trade partners of the country are: India, Pakistan, the United States, the Netherlands and Tajikistan. Afghanistan imports products mainly from Pakistan, the United States, Germany and India.
