Business

Afghan businesses hope for change

Digger

The only thing Asadullah Popal's digger had gathered was dust.

When we arrived at the engineer's home, the dilapidated machine was an eyesore at the bottom of his garden.

"Nobody pays, nobody pays," the wealthy German-Afghan businessman told us.

He offered us tea and biscuits and explained how, a few years ago, all his large hospital and road building projects were suddenly given to politicians' cronies.

To add to the misfortune, around that time a roadside bomb in this war-torn country killed 15 of his workers.

Later we visited a part of his armoury of German-made trucks, trailers, loaders and diggers that sat at the top of a hill, consigned, like his ambitions, to the scrapheap of history.

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Media captionMark Lobel reports on the state of the economy in Afghanistan

Mr Popal told us, perhaps unsurprisingly, that he would leave Afghanistan soon unless things changed.

The World Bank has said that it's harder to do business in Afghanistan than Iran, Iraq, Syria and Zimbabwe.

Yet Afghanistan's new president says he wants the country "truly open for business".

As a former World Bank executive himself, President Ashraf Ghani is all too familiar with the scale of the challenge.

Image caption Mr Ghani became president after months of wrangling following elections in April and June.

He inherited an economy in tatters after three decades of war, despite more than $100bn (£64bn) of mainly US money spent on reconstruction, which was more than the US paid to rebuild Europe after the Second World War.

There's massive corruption, a lack of credit, contracts are difficult to enforce and electricity is scarce.

The speed with which President Ghani dealt with the $1bn Kabul Bank scandal, one of the world's largest bank frauds, demonstrated a new political will.

But the president recently missed his own deadline to form a cabinet, suggesting that deeper reforms are likely to take some time to achieve, such as simplifying Afghanistan's business environment, which has been plagued by needless red tape.

Image caption Zabi Ullah's pharmacy chain has triumphed over red tape

Keen entrepreneurs have had to be creative to thrive.

Helped by British aid money, pharmacy owner Zabi Ullah opened the country's first counterfeit-free, 24-hour chain of chemists, where customers can check if goods are real using a text message service.

Old rules made it illegal to open more than one store under the same name and within 200m of each other.

But Mr Ullah registered each shop under a different family member's name. It was far from ideal but was workable, based on trust.

Speaking in one of his pharmacies in the capital Kabul, Mr Ullah says: "The family has been co-operative that they give me their names. They will be co-operating with me when the regulation changes and all the ownership of the licences will transfer back to [my] pharmacies."

Image caption Mr Ullah registered his pharmacies under different names

Working within antiquated rules cost the country dearly.

Naseem Akbar is chief executive of the non-profit, Afghan-business focused organisation Harakat. His job is to reduce regulation in Afghanistan.

He believes politicians are to blame for the weak economic growth over the past decade. He says good policies were created but never implemented, which stifled private sector development.

Mr Akbar welcomes Mr Ghani's new anti-corruption approach, which he describes as "a shock to the system".

He says the government must define a clear economic development strategy to bolster the investment climate in the country.

Mr Akbar also wants a single organisation to run all public services to deter corruption.

"Part of [what's behind] the insurgency is the disappointment that the public service offers for its people," he says.

President Ghani needs to rebuild Afghanistan's financial reputation ahead of a crucial donor conference in London next month.

On a recent fundraising trip to China, the president accepted Afghanistan needed foreign funds for nation building but insisted he has not asked the international community for charity.

"We truly need to learn to fish, not to be given fish," he said.

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