Hope for Afghanistan’s Women Entrepreneurs?
August 7, 2013
As the 2014 deadline for withdrawal of international forces from Afghanistan nears, concern is increasing that the fragile, hard-fought gains made by Afghan women will be rolled back. The World Bank has said the decline in foreign spending that comes with the shift will have a “profound and lasting impact” on Afghanistan’s economy. These realities will present even greater challenges for Afghanistan’s small group of women entrepreneurs and business leaders.
Small and medium enterprises (SMEs) are a key economic driver of Afghanistan’s development. They constitute approximately 75 percent of the labor force and generate over 50 percent of GDP. However, Afghan-produced goods meet only a fraction of local demand. Afghan business owners struggle to obtain the capital, management advice, equipment, and technologies they need to grow their businesses. Women already play a major role in Afghan industries, such as agriculture, jewelry, carpets, and embroidery, but receive limited benefits.
The Asia Foundation hosted a women entrepreneur’s roundtable in July to discuss issues that Afghan women business leaders face. Eight Afghan women from various sectors, including a trading company, e-distance learning center, pharmaceutical industry, woodcarving, handicraft, and a fruits and vegetable company attended the roundtable. Representatives from the U.S. Embassy in Kabul, USAID, and the UN Women Program also participated.
The topics of discussion included networking strategies, running and managing SMEs, the role of government in promoting or deterring women in business, the effect of security on business, regional trade, and access to loans and financial support from banking institutions.
There was a consensus among participants that formal Afghan networks are very weak and that since businesses operate individually and on their own, the level of expectation for their support is low. One participant expressed her disappointment about the lack of government and Chamber of Commerce involvement. While informal networks, such as women entrepreneurs participating in small roundtables and business conferences or attending various trade shows, are in place, they are somewhat ineffective because of the lack of follow up, particularly with business owners in the provinces. Participants agreed that online groups and fora on both national and international levels would be helpful, and could serve as a channel for women entrepreneurs to share their viewpoints and address any issues related to their specific business.
Running and managing SMEs:
Participants also agreed that the general view and mentality of the Afghan people toward women entrepreneurs is challenging and unlikely to change in the short term. A woman entrepreneur has to prove her capacity to deliver products or services in a more assertive manner than her male counterparts. In order for women business owners to succeed, the general public’s perception has to change.
The panelists also discussed future goals for their businesses in the medium to long term. One participant expressed her desire to supply at least 10 percent of good-quality medicine to the Afghan population. Another participant said she aimed for her business to establish 30 e-distance learning franchise centers across the country over the next 10 years. Panelists agreed that Afghan women entrepreneurs needed to find better ways to compete with international traders and export companies currently providing products to Afghanistan, including from Pakistan and Turkey. Healthy international competition and products “made in Afghanistan” should be promoted and make more attractive to local customers.
Lack of transparency, access to loans:
Participants expressed their concern about widespread corruption in the government agencies that further blocks women entrepreneurs to take on business initiatives. Banking institutions provide loans; however, the conditions are not suitable for business owners due to the high interest rate, varying anywhere from 15-17 percent. Nepotism in the banking system is not uncommon and falsification of documents, including business licenses, was also worrisome to the panelists. The process of business license renewal was particularly slow, some believed purposely delayed, and prone to bribery and corruption. All participants agreed that as long as gender inequality in Afghanistan prevailed and major organizations and institutions remained governed by men, women-led businesses would not advance.
Role of government:
There was a clear consensus that the Karzai government should promote Afghan-made products and provide more support to SMEs. One of the major concerns expressed was that various products and services are being outsourced despite the fact that the Afghan business community is capable of providing the same quality of goods to local customers. Participants called for fewer imports to Afghanistan, and increased subsidies for women entrepreneurs. The difference between small and large businesses, when working with government agencies, should also be distinguished. Panelists agreed that awareness should be raised in the Parliament, as women Parliament members are not properly informed about the role, activities, and challenges facing women in the business community. Currently, there are no groups in the government that are lobbying for the rights of women in business.
Participants were concerned about the overall security situation post-2014 and the impact on their businesses. The withdrawal of foreign presence and aid has the potential to bring about challenges across the country; the increased level of violence in certain provinces does not only affect the businesses’ operation but also schools and universities, particularly for female students. One participant felt uneasy about 2014, as her business is entirely supported by foreign donors, and she was not optimistic as any cut in funds might lead to the collapse of her enterprise. A representative from the US Embassy attending the roundtable assured the participants of the Obama Administration’s commitment to Afghanistan, reminding that the transition in 2014 is related to military functions, not development projects. (Just last month, USAID announced a new five-year program is to strengthen women’s rights groups, boost female participation in the economy, increase the number of women in decision-making positions within the government, and help women obtain business skills.) Participants agreed that now and post-2014, Afghans will need to step up and take the lead.
Petra Dunne is The Asia Foundation’s associate of the Program Management Office in Afghanistan. She can be reached at [email protected]. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.
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