Dr. Philipp Rösler & Dirk Niebel

Germany’s diplomatic relationship with Afghanistan stretches all the way back to 1919, and the two countries have coop­erated closely in a number of areas since then. The contact between the countries has always been built on a foundation of friendship. After the fall of the Taliban, a German liaison office was set up as early as December 2001, in an effort to reestablish contact with the country’s population and their political representatives.

The large number of German aid and recon­­­­struction projects in Afghanistan underlines the federal government’s great interest in lasting and stable peace in Afgha­­­nistan. After all, this is an essential pre­­re­­quisite for development in political, social and commercial life. The German govern­­ment is supporting the Afghan government in mastering this major challenge.

According to the Human Development Index, Afghanistan is among the poorest countries on earth. Since 2001, substantial economic progress has been made, although this development remains strongly de­­pendent on the security situation in the country.

im Süden der Stadt Kabul

im Süden der Stadt Kabul

Fehlende Rechtssicherheit und politische Unsicherheit tragen dazu bei, dass immer noch etwa vier Fünftel aller wirtschaftlichen Aktivitäten im informellen Sektor stattfinden. Auch wenn Industrie und Bauwirtschaft ihren Anteil am Brutto­in­­landsprodukt steigern konnten, sind 70 Prozent aller Arbeitskräfte weiterhin in der Landwirtschaft tätig.

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A lack of legal secu­­rity and political uncertainty mean that around four fifths of all economic activities in the country still take place in the informal sector. Although industry and construction have succeeded in increasing their share of the gross domes­tic product, seventy per cent of all work­ers are still employed in agriculture.

In a global comparison, Afghanistan is one of the countries most open to foreign in­­­­vestment. In order to make the country attractive for foreign and domestic invest­ors, the German government is suppor­t­ing Afghan authorities in their efforts to im­­prove the business and investment environment. To do this, legal security has to be strengthened and corruption combated. This approach is paying off, as an increasing number of German companies are becoming interested in expand­ing into the country, particularly in the construction, telecommunications and light industrial sectors.

The greatest assets held by Afghanistan are its resources. Although the outstand­ing potential of the country has been known for many years, its importance for the global resource markets has been minimal up to now. Since 2001, however, efforts have been made to make the most of Afghanistan’s natural resources for eco­­nomic gain. In the long term, raw materials extraction can become one of the most important and sustainable sources of income and an opportunity for sustained economic development. To ensure that this can also contribute to the fight against poverty, investments in the raw materials sector have to be made re­­sponsibly and transparently. Up to now, the security situation, the vast distances on the ground and lack of specialist personnel have prevented large projects from being launched and major commitments from being made.

Above all, however, it is the poor infrastructure that is preventing economic develop­­ment in distant regions of this country of mountains and deserts. The road network, which was built with foreign help into the 1970s, was left destroyed and neglected in many areas after the civil war. Although the 2,700-kilometre Ring Road which connects the country’s most important cities is currently being completed, further challenges in the fields of rail travel, electricity and water still have to be overcome. One rapidly growing market in Afghanistan is the communications sector. Many people use mobile telephones and the number of Internet users is rapidly increasing, particularly on the back of the growth of Internet cafes. This also provides opportunities for sustainable development in the local private economy.

The efforts of the German government to rebuild and develop Afghanistan have been almost doubled for the years 2010 to 2013, with a view to tangibly improving the country’s development prospects. This also includes enhancing the overall eco­­nomic environment. The rebuilding of infra­­structure in all areas offers German companies great opportunities to get involved. Infrastructure plans generate high demand and promote stability. In turn, they also increase the demand for retail and indus­­trial goods in the country. As the security situation improves and the infrastructure remains intact, another important field is being promoted: regional eco­nomic integration with neighbouring countries offers Afghanistan one of the most effective opportunities to create peace through economic networking and to fuel its development, and indeed its prosperity, through the effects of trade.

In this publication, leading experts from the worlds of politics, business and culture discuss the developments, opportunities and prospects of Afghanistan. We hope you find it informative and interesting, as well as a source of inspiration for your own projects.

Niebel-gross-KopieThe author, born in 1963, is married with three children. He studied administration at the Federal University of Applied Admin­i­strative Sciences in Mannheim. After gaining his degree, he became an appointments officer at Heidelberg employment office in 1993. From 2005 to 2009 he served as the general secretary of the FDP. Since October 2009, Dirk Niebel has been Federal Minister for Economic Cooperation and Development.