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Economy of Afghanistan

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Economy of Afghanistan

Economy of Afghanistan
Currency Afghani (AFN)
21 March - 20 March
Trade organizations
SCO and WTO accession
GDP $33.55 billion (2012 est.)
GDP rank 108th (nominal) / 96th (PPP)
GDP growth
11% (2012 est.)
GDP per capita
$1,000 (2011)[1]
GDP by sector
agriculture: 20% industry: 25.6% services: 54.4% (2011 est.)
13.8% (2011 est.)
Population below poverty line
36% (2009)
Labor force
15 million (2004)
Labor force by occupation
agriculture 78.6%, industry 5.7%, services 15.7% (2009)
Unemployment 38% (2008)
Main industries
small-scale production of textiles, soap, furniture, shoes, fertilizer, apparel, food-products, non-alcoholic beverages, mineral water, cement; handwoven carpets; natural gas, coal, copper
Exports $376 million (2012 est.)
Export goods
opium, fruits and nuts, Afghan rugs, wool, cotton, hides and pelts, and gemstone
Main export partners
 Pakistan 33.1%
 India 24.9%
 Tajikistan 8.7%
 United States 5.8% (2012 est.) [3]
Imports $6.39 billion (2012 est.)
Import goods
machinery and other capital goods, food, textiles and petroleum products
Main import partners
 Pakistan 25.8%
 United States 17.4%
 Russia 8.4%
 India 5.5%
 China 5.4%
 Kazakhstan 4.5%
 Germany 4.3% (2012 est.)[4]
Public finances
$1.28 billion (FY10/11)
Revenues $1.58 billion
Expenses $50.000 billion
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The economy of Afghanistan has improved significantly since 2002 due to the infusion of billions of dollars in international assistance and investments,[5] as well as remittances from Afghan expats.The help that came from expats and outside investments saw this significant increase when there was more political reliability after the fall of the many terrorists groups in the early 2000s like the Taliban.[6] The recent improvement is also due to dramatic improvements in agricultural production and the end of a four-year drought[7] in most of the country.

The government of Afghanistan claims that the country holds up to $3 trillion in proven untapped mineral deposits, which could make it one of the richest mining regions on earth. However, due to the conflicts, it remains one of the least developed countries in the world, ranking 175th on the United Nations' Human Development Index. The nation's GDP stands at about $34 billion[8] with an exchange rate of $19.85 billion, and the GDP per capita is about $1,150.[1]

About 35% of its population is unemployed[9] and 36% live below the national poverty line,[10] suffering from shortages of housing, clean drinking water, and electricity. The Karzai administration along with international donors have remained committed to improving access to these basic necessities by prioritizing infrastructure development, education, housing development, jobs programs, medical care, and economic reform.


  • Economic history 1
  • Agriculture and livestock 2
    • Fishing 2.1
    • Forestry 2.2
  • Trade and industry 3
  • Economic development and recovery 4
  • Tourism 5
  • National accounts 6
  • See also 7
  • References 8
  • External links 9

Economic history

Historically, there has been a lack of information and reliable statistics about Afghanistan's economy. In the early modern period under the rule of kings Abdur Rahman Khan (1880–1901) and Habibullah Khan (1901–1919), a great deal of Afghan commerce was centrally controlled by the Afghan government. The Afghan monarchs were eager to develop the stature of government and the country's military capability, and so attempted to raise money by the imposition of state monopolies on the sale of commodoties and high taxes. This slowed the long-term development of Afghanistan during that period. Western techonogies and manufacturing methods were slowly introduced during these eras at the command of the Afghan ruler, but in general only according to the logistical requirements of the growing army. An emphasis was placed on the manufacture of weapons and other military materiel. This process was in the hands of a small number of western experts invited to Kabul by the Afghan kings. Otherwise, it was not possible for outsiders, particularly westerners, to set up large-scale enterprises in Afghanistan during that period.[11]

The first prominent plan to develop Afghanistan's economy in modern times was the Helmand Valley Authority project, modelled on the Tennessee Valley Authority in the United States, which was expected to be of primary economic importance.[12] The country began facing severe economic hardships during the 1970s when neighboring Pakistan, under Zulfikar Ali Bhutto, began closing the Pakistan-Afghanistan border crossings. This move resulted in Afghanistan increasing political and economic ties with its northern neighbor, the powerful Soviet Union of that time.

The 1979 Soviet invasion and ensuing civil war destroyed much of the country's limited infrastructure, and disrupted normal patterns of economic activity (See Democratic Republic of Afghanistan#Economy). Eventually, Afghanistan went from a traditional economy to a centrally planned economy up until 2002 when it was replaced by a free market economy.[13] Gross domestic product has fallen substantially since the 1980s due to disruption of trade and transport as well as loss of labor and capital. Continuing internal strife severely hampered domestic efforts to rebuild the nation or provide ways for the international community to help.

According to the International Monetary Fund, the Afghan economy grew 20% in the fiscal year ending in March 2004, after expanding 30% in the previous 12 months. The growth is attributed to international aid and to the end of droughts. An estimated $4.4 billion of aid entered the nation from 2002 to 2004. A GDP of $4 billion in fiscal year 2003 was recalculated by the IMF to $6.1 billion, after adding proceeds from opium products. Mean graduate pay was $0.56 per manhour in 2010.

Agriculture and livestock

A fruit vendor at the Kabul International AgFair in 2009.
Workers processing pomegranates (anaar), which Afghanistan is famous for in Asia.

The Afghan economy has always been agricultural, despite the fact that only 12% of its total land is arable and about 6% is currently cultivated. Agriculture production is constrained by an almost total dependence on erratic winter snows and spring rains for water. As of 2007, the country's fruit and nut exports were at $113 million per year, but according to an estimate could grow to more than $800 million per year in 10 years given sufficient investment. Afghanistan is known for producing some of the finest fruits, vegetables, turtles, and especially pomegranates, apricots, grapes, melons, and mulberries. Several provinces in the north of the country (i.e. Badghis and Samangan) are famous for pistachio cultivation but the area currently lacks proper marketing and processing plants. It is claimed that some Indian companies buy Afghan pistachios for a very low price, process them in India and sell to western countries as Indian products. However, the Afghan government is planning to build storage facilities for pistachios since receiving bumper crops in 2010.[14] The Bamyan Province in central Afghanistan is known for growing superior potatoes, which on an average produces 140,000 to 170,000 tonnes.[15]

  • World Bank Trade Summary Statistics Afghanistan 2012
  • Ministry of Finance, Afghanistan
  • Ministry of Commerce & Industry, Afghanistan
  • Ministry of Rural Rehabilitation & Development, Afghanistan
  • Afghanistan Investment Support Agency (AISA)
  • Afghanistan's Paper Money
  • Afghanistan Sixth PRGF Review, International Monetary Fund
  • Afghan Agriculture (information resource site maintained by UC Davis and USDA)
  • Afghanistan Economic Development at DMOZ

External links

  1. ^ a b c "GDP - per capita (PPP): $1,000 (2011 est.)".  
  2. ^ "Doing Business in Afghanistan 2012".  
  3. ^ "Export Partners of Afghanistan".  
  4. ^ "Import Partners of Afghanistan".  
  5. ^ Central bank claims hike in cash reserves, Pajhwok Afghan News (PAN). 2010-06-09.
  6. ^ a b "Afghanistan receives $3.3b remittances from expats". Pajhwok Afghan News (PAN). October 19, 2007. Retrieved 2012-11-23. 
  7. ^ "Drought in Afghanistan Killing Off Cattle, Sheep".  
  8. ^ "Afghanistan". "World Factbook". "C. I. A.". Retrieved 2013-08-14. 
  9. ^ C.I.A. World Factbook: Unemployment. 2008 estimate. Retrieved 2013-8-14.
  10. ^ World Bank Data: Afghanistan. Retrieved 2013-8-14.
  11. ^ Asian Affairs Journal, Making Money in Afghanistan: The First Western Entrepreneurs 1880-1919, Vol 3, 2012.
  12. ^ a b Report on Development of Helmand Valley, Afghanistan, 1956, Tudor Engineering Company
  13. ^
  14. ^ "Bumper pistachio crops this year in Samangan". Pajhwok Afghan News (PAN). August 7, 2010. Retrieved 2012-05-15. 
  15. ^ "Bamyan farmers eyeing bumper potato yield". July 30, 2012. Retrieved 2012-11-23. 
  16. ^ eAfghanAg, [1], April 13, 2012.
  17. ^ "Wheat production hits record high in Takhar". Pajhwok Afghan News (PAN). August 22, 2007. Retrieved 2012-11-23. 
  18. ^ Chickens Improve Livelihoods
  19. ^ "Water & energy sector in critical situation | Pajhwok Afghan News". April 3, 2012. Retrieved 2012-05-15. 
  20. ^ a b Abasin Zahir, ed. (Juley 10, 2010). "Fish farms struggle to meet Afghanistans appetite for fish". Retrieved 2012-11-23. 
  21. ^ Fish Farms Improve Income and Nutrition Levels
  22. ^ Pajhwok Afghan News, Afghan-US trade up by 34pc in eight months, November 14, 2007.
  23. ^ a b Huge rare-earth material in Helmand: USGS. By Lalit K Jha for Pajhwok Afghan News. September 15, 2011.
  24. ^ a b c - Eurasia Insight, Afghanistan’s Energy Future and its Potential Implications
  25. ^ "Afghanistan has huge mineral resources: survey". Pajhwok Afghan News (PAN). November 14, 2007. Retrieved 2012-11-23. 
  26. ^ U.S. Identifies Vast Riches of Minerals in Afghanistan, New York Times by James Risen. June 13, 2010.
  27. ^ "Turning Afghan minerals into wealth could take years; US". 2010-06-15. Retrieved 2012-05-15. 
  28. ^ "Afghanistan: The Saudi Arabia of Lithium?". 2010-06-14. Retrieved 2012-05-15. 
  29. ^ "Afghanistan says its untapped mineral wealth is at least $3 trillion _ triple US estimate". Retrieved 2012-05-15. 
  30. ^ "Afghanistan is suddenly wealthy: US finds $1 trillion in mineral deposits". 2010-06-14. Retrieved 2012-05-15. 
  31. ^ Sengupta, Kim (2010-06-15). "Afghanistan's resources could make it the richest mining region on earth". Retrieved 2012-05-15. 
  32. ^ Pak Tribune, NASA Confirms Gas, Mineral Reserves In Afghanistan, November 18, 2005.
  33. ^, (1.8 MB pdf file)
  34. ^ Abdul Qadir Siddiqui, ed. (March 31, 2012). "Indian, Canadian firms to invest $ 14.6b in Hajigak iron mine". Pajhwok Afghan News. Retrieved 2012-03-31. 
  35. ^ McClatchy News, Factory, coal mine show connections matter most in Afghan business, November 10, 2010
  36. ^ "Gas well inaugurated in Shiberghan". Pajhwok Afghan News (PAN). November 8, 2010. Retrieved 2011-02-09. 
  37. ^ Azizi Hotak General Trading Group
  38. ^ Afghanistan signs '$7 bn' oil deal with China
  39. ^ Associated Press – Wed, Dec 28, 2011 (2011-12-28). "Afghanistan, China sign first oil contract". Retrieved 2012-05-15. 
  40. ^ China's CNPC begins oil production in Afghanistan, by Hamid Shalizi. October 21, 2012.
  41. ^ Siddiqui, Abdul Qadir (November 29, 2010). "Afghan-Pakistan chamber of commerce set up". Pajhwok Afghan News. Retrieved 2010-12-10. 
  42. ^ Siddiqui, Abdul Qadir (December 5, 2010). "Pakistan to resolve Afghan traders' problems". Pajhwok Afghan News. Retrieved 2010-12-10. 
  43. ^ Siddiqui, Abdul Qadir (February 16, 2011). "Pakistan waives off tax on Afghan trucks". Pajhwok Afghan News (PAN). Retrieved 2010-12-10. 
  44. ^ Remote sensing change detection of irrigated agriculture in Afghanistan, Barry Haacka, James Wolfb & Richard Englishb; Geocarto International; Volume 13, Issue 2, 1998; pages 65-75; DOI: 10.1080/10106049809354643
  45. ^ [2], Socio-Economic Overview of Afghanistan, Strategic Outlook
  46. ^ "Economic Growth". USAID. Retrieved 25 September 2011. 
  47. ^ "the Kabul New City Official Website". DCDA. Retrieved 2012-05-15. 
  48. ^ "Onyx Construction Company". Retrieved 2012-05-15. 
  49. ^ "Ghazi Amanullah Khan City". 2009. Retrieved 2011-08-15. 
  50. ^ Posted (2012-03-23). "Case study: Aino Mina". Retrieved 2012-05-15. 
  51. ^ A Humane Afghan City? by Ann Marlowe in Forbes September 2, 2009.
  52. ^ "PepsiCo Signs with Alokozay as Exclusive Bottling Partner for Afghanistan". 2011-04-20. Retrieved 2012-05-15. 
  53. ^ Nestlé, Afghanistan Operations
  54. ^ Dairy Industry Revitalization Project for Afghanistan, implemented by Land O'Lakes
  55. ^ "Afghanistan Owes More Than $2bn, Finance Ministry Says".  


See also

Fiscal year: 21 March - 21 March

  • 46.75 (2011)
  • 46.45 (2010)

Exchange rates: afghanis (AFA) per US dollar - 50 = $1

Currency: Afghani (AFN)

Current account balance: -$743.9 million (2011 est.)
country comparison to the world: 132

  • Russia - $987 million
  • Asian Development Bank - $ 596 million
  • World Bank - $435 million
  • International Monetary Fund - $114 million
  • Germany - $18 million
  • Saudi Development Fund - $47 million
  • Islamic Development Bank - $11 million
  • Bulgaria - $51 million
  • Kuwait Development Fund - $22 million
  • Iran - $10 million
  • Opec - $1.8 million

Debt - external: $1.28 to $2.3 billion total (2011)[55]

Imports - partners: Pakistan 13.7%, Russia 12.6%, Uzbekistan 11.5%, Iran 9.1% (FY11/12 est.)

Imports - commodities: machinery and other capital goods, food, textiles, petroleum products

Imports: $6.39 billion (2012 est.)

Exports - partners: Pakistan 48%, India 19%, Russia 9%, Iran 5% (FY11/12 est.)

Exports - commodities: opium, fruits and nuts, handwoven carpets, wool, cotton, hides and pelts, and gemstone

Exports: $376 million (2012 est.)
country comparison to the world: 164

Agriculture - products: opium poppies, wheat, fruits, nuts, karakul pelts

Natural gas - proved reserves: 15.7 trillion cubic feet (2006 est.)[24]

Natural gas - consumption: 220 million m³ (2001)

Natural gas - production: 220 million m³ (2001)

Oil - proved reserves: 1,600,000,000 barrels (250,000,000 m3) (2006)[24]

Oil - consumption: 4,229 barrels per day (672.4 m3/d) (2011 est.)
country comparison to the world: 165

Oil - production: 1,950 barrels per day (310 m3/d) (2012 est.)
country comparison to the world: 210

Electricity - imports: 1.377 billion kWh (2009 est.)

Electricity - exports: 0 kWh (2010 est.)

Electricity - consumption: 2.226 billion kWh (2009 est.)
country comparison to the world: 137

  • fossil fuel: 23.5% of total installed capacity (2009 est.)
  • hydro: 76.5% of total installed capacity (2009 est.)
  • nuclear: 0% of total installed capacity (2009 est.)
  • other: 0% (2001)

Electricity - production by source:

Electricity - production: 913.1 million kWh (2009 est.)
country comparison to the world: 150

Industries: small-scale production of textiles, soap, furniture, shoes, fertilizer, apparel, food-products, non-alcoholic beverages, mineral water, cement; handwoven carpets; natural gas, coal, copper

  • revenues: $1.58 billion
  • expenditures: $3.3 billion


Unemployment rate: 35% (2009)
country comparison to the world: 180

Labor force - by occupation: agriculture 78.6%, industry 5.7%, services 15.7% (2009)

Labor force: 15 million (2004)
country comparison to the world: 39

Inflation rate (consumer prices): 13.8% (2011 est.)
country comparison to the world: 19

  • lowest 10%: 3.8%
  • highest 10%: 24%

Household income or consumption by percentage share:

  • 36% (2009)

Population below poverty line:

note: data excludes opium production

  • agriculture: 20%
  • industry: 25.6%
  • services: 54.4%

GDP - composition by sector:

GDP - per capita: purchasing power parity - $1,000 (2011 est.)[1]

  • 11% (2012 est.)

GDP - real growth rate:

GDP: purchasing power parity $33.55 billion, with an exchange rate at $19.85 billion (2011 est.)

The majority of the following information is taken from, or adapted from The World Factbook

National accounts

Tourist sites within the country include:

Natural landscapes of Afghanistan

The country has three international airports, including the Kabul International Airport, Kandahar International Airport and Herat International Airport. Mazar-i-Sharif Airport and Ghazni Airport are also being upgraded to become international in the coming years. The city of Kabul has many guest houses and hotels, including the Hotel Inter-Continental Kabul, Safi Landmark Hotel, and at least one 5-star Serena Hotel. A Marriott is under construction next to the U.S. Embassy.

Tourism in Afghanistan was at its peak in 1977. Many tourists from around the world came to visit Afghanistan, including from India, neighboring Iran and Pakistan, the Soviet Union, Europe, North America and other places. All this ended with the start of the April 1978 Saur Revolution. It is expected that once the security situation is normal, Afghanistan will become a major tourist destination. Most westerners feel that Afghanistan is too dangerous for them to tour but the Afghan expatriates and those particularly from the Muslim world do not see it that dangerous.


In the last decade, companies such as Coca Cola Company and PepsiCo launched or re-launched operations in Kabul.[52] In addition, a number of local mineral water and juice plants, including factories of other products, were built. This not only promotes foreign investment but also makes the country less dependent on imports from neighboring countries and helps provide employment opportunity to many Afghans.[53][54] Watan Group is a company based in Afghanistan that provides telecommunications, logistics and security services.

As part of an attempt to modernize the city and boost the economy, a number of new high rise buildings are under construction by various developers.[48] An initial concept design called the City of Light Development, envisioned by Hisham N. Ashkouri, for the development and the implementation of a privately based investment enterprise was proposed for a multi-function commercial, historic and cultural development within the limits of the Old City of Kabul, along the southern side of the Kabul River and along Jade Meywand Avenue. Some of the national development projects include the $35 bn New Kabul City next to the capital, the Ghazi Amanullah Khan City east of Jalalabad, and the Aino Mena in Kandahar.[49][50] Similar development projects are also taking place in Herat in the west, Mazar-e-Sharif in the north and in other cities.[51]

In 2006, President Hamid Karzai established an independent board for the development of Kabul New City. The board brought together key stakeholders, including relevant government agencies, representation from private sector, urban specialists and economists, with cooperation from the government of Japan and French private sector, to prepare a master plan for the city in the context of Greater Kabul. The master plan and its implementation strategy for 2025 were endorsed by the Afghan Cabinet in early 2009. The initiative turned into one of the biggest commercially viable national development project of the country, expected to be led by the private sector.[47]

The capital of Kabul symbolizes the spirits of all Afghans and international cooperation, sets at the heart of this highly resourceful region, with great potential to turn into a business hub. After 2002, the new geo-political dynamics and its subsequent business opportunities, rapid urban population growth and emergence of high unemployment, triggered the planning of urban extension towards the immediate north of Kabul, in the form of a new city.

Afghanistan is a member of New Silk Road trade project, which is aimed to connecting South Asia with Central Asia and the Middle East. This way Afghanistan will be able to collect large fees from trade passing through the country, including from the Trans-Afghanistan Pipeline. Foreign Minister Zalmai Rassoul stated that his nation's "goal is to achieve an Afghan economy whose growth is based on trade, private enterprise and investment". Experts believe that this will revolutionize the economy of the region.

The $35 billion New Kabul master plan, in which the city is expected to expand north towards Bagram Air Base.

Da Afghanistan Bank serves as the central bank of the nation and the "Afghani" (AFN) is the national currency, with an exchange rate of about 53 Afghanis to 1 US dollar. There are over 16 different banks operating in the country, including Afghanistan International Bank, Kabul Bank, Azizi Bank, Pashtany Bank, Standard Chartered Bank, First Micro Finance Bank, and others. A new law on private investment provides three to seven-year tax holidays to eligible companies and a four-year exemption from exports tariffs and duties. According to a UN report in 2007, Afghanistan has received over $3.3 billion from its expatriate community in 2006. UN officials familiar with the issue said remittances to Afghanistan could have been more if the banking regulations are more convenient.[6] Additionally, improvements to the business-enabling environment have resulted in more than $1.5 billion in telecom investment and created more than 100,000 jobs since 2003.[46]

In 1956, the government promulgated the first in a long series of ambitious development plans. By the late 1970s, these had achieved only mixed results due to flaws in the planning process as well as inadequate funding and a shortage of the skilled managers and technicians needed for implementation.[45]

Afghanistan embarked on a modest economic development program in the 1930s. The government founded banks; introduced paper money; established a university; expanded primary, secondary, and technical schools; and sent students abroad for education. In 1952 it created the Helmand Valley Authority to manage the economic development of the Helmand and Arghandab valleys through irrigation and land development,[12] a scheme which remains one of the country's most important capital resources.[44]

Shopping district in the Khair Khana neighborhood of Kabul.
New commercial building

Economic development and recovery

Trade in goods smuggled into Pakistan once constituted a major source of revenue for Afghanistan. Many of the goods that were smuggled into Pakistan have originally entered Afghanistan from Pakistan, where they fell under the Afghan Trade and Transit Agreement (ATTA). This permitted goods bound for Afghanistan to transit through Pakistan free of duty. This resulted in considerable problems for the Pakistani government, particularly its customs bureau who realized that many of the items being resold on the black market in Pakistan were the very same items being allowed duty-free exemption from Pakistani ports (mainly Karachi) on their way to Afghanistan. When Pakistan clamped down in 2003 on the types of goods permitted duty-free transit, and introducing stringent measures and labels to prevent such practices, re-routing of goods through Iran from the Persian Gulf increased significantly. The pre-2003 smuggling trade provided undocumented jobs to tens of thousands of Afghans and Pakistanis, but also helped fuel the black economy, often intertwined with the drug cartels, of both countries. Afghanistan and Pakistan recently signed into law a new Afghan-Pak Trade and Transit Agreement (APTTA), which allows their shipping trucks to transit goods within both nations. This revised US-sponsored APTTA agreement also allows Afghan trucks to transport exports to India via Pakistan through the Wagah crossing point.[41][42] According to Afghanistan's Chamber of Commerce and Industries deputy head, Khan Jan Alokozai, about 500 shipping containers of trade goods enter Afghanistan via the Torkham and Wesh-Chaman border crossings on a daily basis.[43] Other major trade routes in Afghanistan are via the crossing borders in Zaranj, Islam Qala, Hairatan, Shir Khan Bandar, and Towraghondi.

Afghanistan's important resource in the past has been natural gas, which was first tapped in 1967. During the 1980s, gas sales accounted for $300 million a year in export revenues (56% of the total). 90% of these exports went to the Soviet Union to pay for imports and debts. However, during the withdrawal of Soviet troops in 1989, Afghanistan's natural gas fields were capped to prevent sabotage by the Mujahideen. Gas production has dropped from a high of 8.2 million cubic metres (2.9 × 108 cu ft) per day in the 1980s to a low of about 600,000 cubic meters (2.2 × 107 cu ft) in 2001. After the formation of the new Karzai administration, production of natural gas has been restored again.[36] A locally owned company, Azizi Hotak General Trading Group, is currently the main supplier of diesel fuel, gasoline, jet fuel and LPG in Afghanistan.[37] In December 2011, Afghanistan signed an oil exploration contract with China National Petroleum Corporation (CNPC) for the development of three oil fields along the Amu Darya river.[38] The state will have its first oil refineries within the next three years, after which it will receive very little of the profits from the sale of the oil and natural gas.[39] CNPC began Afghan oil production in late October 2012, with extracting 1.5 million barrels of oil annually.[40]

Afghanistan signed a copper deal with China (Metallurgical Corp. of China Ltd.) in 2008, which is to a large scale project that involves the investment of $2.8 billion by China and an annual income of about $400 million to the Afghan government. The country's Ainak copper mine, located in Logar province, is one of the biggest in the world and is expected to provide jobs to 20,000 Afghans. It is estimated to hold at least 11 million tonnes or US$33 billion worth of copper.[32][33] Experts believe that the production of copper could begin within two to three years and the iron ore in five to seven years as of 2010. The country's other recently announced treasure is the Hajigak iron ore mine, located 130 miles west of Kabul and is believed to hold an estimated 1.8 billion to 2 billion metric tons of the mineral used to make steel. AFISCO, an Indian consortium of seven companies, led by the Steel Authority of India Limited (SAIL), and Canada's Kilo Goldmines Ltd are expected to jointly invest $14.6 billion in developing the Hajigak iron mine.[34] The country has several coal mines but need to be modernized.[35]

Afghanistan is endowed with a wealth of natural resources, including extensive deposits of natural gas, petroleum, coal, marble, gold, copper, chromite, talc, barites, sulfur, lead, zinc, iron ore, salt, precious and semi-precious stones, and many rare earth elements.[23] In 2006, a U.S. Geological Survey estimated that Afghanistan has as much as 36 trillion cubic feet (1.0×10^12 m3) of natural gas, 3.6 billion barrels (570×10^6 m3) of oil and condensate reserves.[24] According to a 2007 assessment, Afghanistan has significant amounts of undiscovered non-fuel mineral resources. Geologists also found indications of abundant deposits of colored stones and gemstones, including emerald, ruby, sapphire, garnet, lapis, kunzite, spinel, tourmaline and peridot.[25] In 2010, U.S. Pentagon officials along with American geologists have revealed the discovery of nearly $1 trillion in untapped mineral deposits in Afghanistan.[26][27] A memo from the Pentagon stated that Afghanistan could become the "Saudi Arabia of lithium".[28] Some believe, including Afghan President Hamid Karzai, that the untapped minerals are worth at least $3 trillion.[29][30][31] Another US Geological Survey estimate from September 2011 showed that the Khanashin carbonatites in the Helmand Province of the country have an estimated 1 million metric tonnes of rare earth elements. Regina Dubey, Acting Director for the Department of Defence Task Force for Business and Stability Operations (TFBSO) stated that "this is just one more piece of evidence that Afghanistan's mineral sector has a bright future."[23]

The current trade between Afghanistan and other countries is at US$5 billion a year. In 1996, legal exports (excluding opium) were estimated at $80 million and imports estimated at $150 million per year. Since the collapse of the Taliban government in 2001, new trade relations are emerging with the United States, Pakistan, Iran, Turkmenistan, the EU, Japan, Uzbekistan, India and other countries. Trade between Afghanistan and the U.S. is beginning to grow at a fast pace, reaching up to approximately $500 million per year.[22] Afghan handwooven rugs are one of the most popular products exported from the country. Other products include hand crafted antique replicas as well as leather and furs.

Marble factory in Herat. Current marble exports are estimated at $15 million per year. With improved extraction, processing, infrastructure, and investment, the industry has the potential to grow into a $450 million per year business.
Afghan export percentages in 2009
Afghan exports in 2006
Trucks on the road in Afghanistan

Trade and industry

The destruction of the forests to create agricultural land, logging, forest fires, plant diseases, and insect pests are all causes of the reduction in forest coverage. Illegal logging and clear-cutting by timber smugglers have exacerbated this destructive process. There is currently a ban on cutting new timber in Afghanistan. Prior to 2001 and under Taliban rule, massive deforestation of the country side was permitted and Afghans moved large quantities of logs into storage centers for profit, where the trees wait for processing on an individual tree by tree request.

The natural forests in Afghanistan are mainly of two types: dense forests of oak trees, walnuttrees, and many other species of nuts that grow in the southeast, and on the northern and northeastern slopes of the Sulaiman ranges; and sparsely distributed short trees and shrubs on all other slopes of the Hindu Kush. The dense forests of the southeast cover only 2.7% of the country. Roundwood production in 2003 was 3,148,000 cubic metres, with 44% used for fuel.

Afghanistan's timber has been greatly depleted, and since the mid-1980s, only about 3% of the land area has been forested, mainly in the east. Significant stands of trees have been destroyed by the ravages of the war. Exploitation has been hampered by lack of power and access roads. Moreover, the distribution of the forest is uneven, and most of the remaining woodland is only found in the Kunar, Nuristan and the Paktia regions in the east of the country.

Lumber yard in Asadabad, Kunar Province.


The country has plenty of water reserves and suitable climate for fish farming. Fishing takes place in the lakes and rivers, particularly in the Kabul River around the Jalalabad area. Fish constitute a smaller part of the Afghan diet today because fish farmers are unable to produce enough fish to keep up with the demands of customers. Using explosives for fishing, called dynamite fishing, became popular in the 1980s and is still practiced by some even though it is illegal today.[20] The annual catch was about 900 tons in 2003. Most fish and seafood is imported from neighboring Pakistan, Iran, the United Arab Emirates and other countries. In recent years, USAID has helped many Afghans in establishing fish farms across the country.[21] There are about 300 fish farms throughout the country and the largest one is at the Qargha, which supplies fish eggs to the other fish farms.[20]


Much of Afghanistan's livestock was removed from the country by early waves of refugees who fled to neighboring Pakistan and Iran. In 2001, the livestock population in Afghanistan had declined by about 40% since 1998. In 2002, this figure was estimated to have declined further to 60%. An FAO survey done in the northern regions in spring 2002 showed that in four provinces (Balkh, Jowzjan, Sar-e Pol, and Faryab), there was a loss of about 84% of cattle from 1997 to 2002 and around 80% of sheep and goat. The majority of Afghans traditionally raise sheep instead of goats because goat meat is not popular in Afghanistan. After 2002, the Afghan ministry of agriculture and livestock with assistance from USAID have been helping to regrow livestock numbers throughout the country. This was done by providing Afghan villagers training and animals to start with.[18] The Agriculture Minister Mohammad Asef Rahimi stated that over the past decade arable land had increased from 2.1 million hectares to 8.1 million hectares, wheat production from 5.1 million tonnes to 2.3 million tonnes, nurseries from 75,000 hectares to 119,000 hectares and grape production from 364,000 tonnes to 615,000 tonnes. Almond production jumped from 19,000 to 56,000 tonnes and cotton from 20,000 to 45,000 tonnes, with the saffron yield reaching 2,000 kilograms.[19]

The availability of land suitable for grazing has traditionally made animal husbandry an important part of the economy. There are two main types of animal husbandry: sedentary, practiced by farmers who raise both animals and crops; and nomadic, practiced by animal herders known as Kuchis. Natural pastures cover some 7,500,000 acres (30,000 km2) but are being overgrazed. The northern regions around Mazar-i-Sharif and Maymanah were the home range for about six million karakul sheep in the late 1990s. Most flocks move to the highlands in the summer to pastures in the north. Oxen are the primary draft power and farmers often share animals for plowing. Poultry are traditionally kept in many houses, mostly in rural households.

Shrikant Jagtap (center), the senior agriculture adviser for the Bamyan Provincial Reconstruction Team, and his interpreter, Hamidullah, discuss agricultural programs with Sayed Khadin, a potato farmer, in front of one of his fields. Potatoes have become the main cash crop for the province, contributing millions of dollars to its economy every year.


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