Incentivize Investing In Afghanistan

Incentivize Investing In Afghanistan

It is perhaps fate that the company formed to pursue trade in the East Indies ended up ruling India. When the East India Company found the Indies to be already monopolized by the Dutch in 1600, they turned to India and the subcontinent as an alternative. Little did they know, however, that they would be remembered as the numbered few who set into motion the events that would cause the already decaying Mughal Empire to stall into a nosedive. The story of the British Raj does not begin in 1857, it begins in 1612, when the East India Company (EIC), authorized by the Queen, landed on the shores of India. The EIC grew so rapidly, that by 1647, it had twenty-three factories and ninety employees in India and these factories would go on to become the military forts from where the British launched their efforts to gain total control of India.

Over time, the traders of the EIC became so prosperous in India, that they became wealthy businessmen and gained political power back in Britain. This allowed them to lobby in the British Parliament, passing laws that made it easier for them to trade in India. Two centuries later, the Mughal emperor found himself to be nothing but a figurehead.  Britain took control of the subcontinent and brought to an end the mighty, majestic Mughal Empire.

The tides may have turned in India since 1857, but the importance of trade and commerce has only grown and become even more evident. In the modern world, trade means money, money means influence and influence means power. It is true that today we cannot go around waging wars and occupying territories as international law prohibits any of that. But even in the 21st century, there is no law and no treaty that is an obstacle in the way of gaining influence on foreign shores. This concept that ‘trade with foreign nations is the right of every state’ has been used by most of the global powers today as the backbone of their rise to the top of the global economy. It is a shame that most developing countries fail to realize and take advantage of this phenomenon. It is even more disappointing to know that Pakistan, with all its diversity of culture, resources and potential is also blind to the importance of trade even when the most shining example of it’s powers is the bedrock of subcontinental history. Not only does Pakistan have a diverse terrain, littered with diverse resources, it also has the perfect trading field waiting in need just beyond the Durand Line: Afghanistan. Ever since the U.S. intervention in Afghanistan, the country has only suffered from turmoil and destruction. What was once a booming economy has been left with nothing to hang onto for revival.

Why, you may wonder, might I want my country to invest in a broken, shattered economy. The answer lies in the United Nations Resolution 2274. UN resolution 2274 is not just a resolution, it is a trade grant. In light of 2274, investing in Afghanistan would now be seen as a gesture of implementation of international law and a service to the global community. This means that a number of countries including India have already – and will be – investing in Afghanistan and its economy will soon find itself being regenerated and reinvigorated, attracting more international investors. In the long run, Afghanistan could potentially one day become an influential force in Asia and if it does, amidst all our problems with India, we’d want that force to be on our side, not against us. What’s more is that in operative clause 7(d) of this resolution, the UN voices its support for regional cooperation to assist Afghanistan in utilizing ‘its role at the heart of Asia to promote regional cooperation, and to work towards a stable and prosperous Afghanistan’. This is a prime opening for us to invest early because in this clause, the UN doesn’t just call upon India, it calls upon all the states within South Asia to assist Afghanistan. There could not be a better opportunity for Pakistan to not only extend a supporting hand to the UN but to also seed her influence in Afghanistan. The government of Pakistan has to take responsibility for the fact that despite all our resources, despite a viable target and despite a platform, there is still no initiative to invest in Afghanistan.

It is about time that we stop envying and blaming the private sector of our economy and start appreciating the truth; the only reason our economy hasn’t drowned in a sea of depression is because it’s aboard a raft built by its private sector. Although we blame our businessmen, but we fail to realize that our best chance at investing abroad is through the private sector and the only way the private sector will invest in Afghanistan is if it is incentivized by the governments of both countries.

Instead of bashing more than 300 businessmen over certain leaks, the Pakistani government should offer them tax exemptions that would compensate for the taxes they pay in order to invest in Afghanistan. They should also be granted ease in currency conversion for investing there.

For those who argue that it should be the Afghan government providing the incentives, it has already been doing so. These incentives date back to 2013 and include providing land at almost no cost to industrialists, seven-year tax exemptions for factory owners and 10-year, low interest loans for farmers, as well as one-year multiple entry visas. Another question on Afghanistan’s credibility as a host nation is her security concerns. But Afghanistan is an economy used to working in and adapting to difficult times. And with the government determined to tackle corruption, one of the many security concerns, there is strong international support for Afghanistan. Most importantly, Pakistani investors will certainly not be alone, with the UK, US and India having already made investments. With so much unexplored potential and, as it seems, the wind in her sails, the prospects of investing in Afghanistan outweigh the risks.

It is true that Pakistan itself needs a lot of investment, especially with the initiation of the China-Pakistan Economic Corridor (C-PEC) and it might not be reasonable to invest in Afghanistan at this point, but when you want something and are determined to get it, there is no way you can stay deprived of it. If the government of Pakistan truly wants the private sector to invest in Afghanistan as well as Pakistan, it will get it done. Over the course of history, people and nations have overturned far greater odds than the ones we face. There is no reason why a country of our resources cannot invest in two different economies simultaneously. It isn’t about can or can’t, it’s about will or won’t.

For years, we’ve been lacking behind India in the race for subcontinental supremacy. Afghanistan can get us close again and if we don’t take this chance, it could be far too late. Years ago, the United States was called a ‘melting pot’ for its cultural diversity. Years from now, the subcontinent could become the ‘melting pot’ for global investors. And if we want Pakistan to be an important ingredient, now is the time to take a step and make a stand.


The views expressed in this article are those of the author and do not necessarily represent the views of or any other organization with which he might be associated.

Sadiq Karim Soofi

Author: Sadiq Karim Soofi

The writer is an O-Level student at Aitchison College Lahore. He is a member and a social worker for Next Generation Pakistan and participates extensively in the Model United Nations.