Thematic Area: Poverty Reduction

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|TAPS Annual Report 2006|

[Last Updated July 2008]

Project Start Date: July 2008
Project End Date: April 2010
Project Location: Kabul
Status of the Project: ongoing
Implementing Partners: Ministry of Commerce and Industries, AISA

The Private Sector Programme consists of the following projects,

1. Partnerships for Private Sector Development (PPSD 2004-2006)
2. Promotion of Regional Trade Cooperation (RTCP 2005-2007)
3. Trade and Private Sector Development (TPSD 2007-2010)

UNDP’s Private Sector Development Programme is aligned with the government’s long-term goal of economic growth, employment creation and poverty reduction. In particular, the programme is supporting the Government in attaining two, five-year strategic benchmarks as outlined in the Afghanistan National Development Strategy (ANDS).

These strategic benchmarks relate to:

1. The formulation of policies and regulations related to trade and investment, especially impacting small and medium enterprises: and
2. Supporting Afghanistan’s increased integration with the region’s economies and the multilateral trading system.

The programme is also directly contributed to the achievement of the United Nations Development Strategy to improve the opportunities for vulnerable groups in a strengthened formal economy and private sector (UNDAF).

Major Achievements

Partnerships for Private Sector Development (PPSD 2004-2006)

Achievements of PPSD included:

• The provision of a business-registration database to assist AISA to track, register and provide information to investors on active, licensed businesses throughout Afghanistan.
• A market-sector assessment on the horticulture sector was disseminated in the local and international business communities, donors and other stakeholders.
• Training Needs Assessment of the business community in Afghanistan conducted and results published.
• Cross-sectoral study on the small- and medium-sized enterprise sector was published in March 2005.

Promotion of Regional Trade Cooperation (RTCP 2005-2007)

Achievements of RTCP included:

• Bilateral Business Meeting (Afghanistan – Uzbekistan) March 2005: Focused on engaging businesses from Uzbekistan to participate in Afghanistan’s reconstruction. This was the first bilateral discussion, on the issues of common economic interest, between the Afghan and Uzbek governments and business representatives.
• ECO Trade and Industry Conference and Fair, Kabul: Provided substantive and organizational inputs, for the successful conduct of the conference; substantive support and participation at the 4th High Level Expert Group Meeting on Trade, Investment, and Other Related Matters; and support to businesses from Kyrgyzstan, Tajikistan and Uzbekistan to participate at the ECO trade fair – a first for the participating companies.
• Regional Economic Conference, Kabul: Delivered the following activities in support of the conference, through AISA - Support to the organization of the Technical Working Group on Trade, Investment and the Business Climate with participation from Governments and the Private Sector, suggestions of which were incorporated into the Kabul Declaration on Regional Economic Cooperation; and Substantive inputs, through expert presentations and papers, on regional trade potential and the legal aspects of international trade.
• CSATTF Second Trade and Customs Working Group Meeting, Bangkok: The Project was invited to participate at the meeting organized by the Central and South Asia Transport and Trade Forum (CSATTF) of the Asian Development Bank (ADB).
• Tour for Revival of Afghanistan’s Dried-Fruits Industry (22 Feb-1March 2006):Afghan delegation of 22 member, comprising senior officials from the Ministries of Commerce, Agriculture and Rural Rehabilitation and Development, as well as representatives of trade support institutions and business groups visited Malaysia to study first hand the institutions, farm-technologies and processing techniques for adaptation in Afghanistan.
• Support to the Afghanistan International Investment Conference and Exhibition:
The Afghanistan Investment Support Agency (AISA) organized the conference and exhibition from 9 to 12 May 2006. Support was provided through substantive inputs and insuring the participation of potential investors from regional countries at the event. Two investment proposals in the dairy products sector were realized.
• AISA CEO requested the programme’s assistance with upgrading their business registration database. This database was originally provided by PPSD and is based on MS Access. AISA has expanded its functions and staffing levels during the past 12 months, and is now undertaking many more functions than originally stated in its mandate. Therefore, AISA wished to be able to track investment into Afghanistan more thoroughly and obtain more relevant and timely business investment information from the database than what was available.
• Support to the Second RECC and RBFA: As a follow-up to the first Regional Economic Cooperation Conference (RECC) organized in Kabul during December 2005, the Second RECC was hosted in New Delhi, India, on 18 and 19 November 2006. The Regional Business Forum for Afghanistan (RBFA) was organized concurrently with the RECC.
• Roundtable on “Unleashing Entrepreneurship: Nurturing an Enabling Environment for SME Development in Afghanistan”, 2 June 2007, Kabul

UNDP and Afghanistan Investment Support Agency (AISA) jointly organized the roundtable, inaugurated by HE Dr. Mir Mohammad Amin Frahang, Minsiter of Commerce and Industries of Afghanistan. More than 120 representatives from the Government, Private Sector, Trade and Investment Support Institutions, Non-Governmental and International Organizations participated in this meeting. The purpose of the roundtable was to together representatives from Government, Private Sector, Trade and Investment Support Institutions, Non-Governmental and International Organizations to discuss promotion of a favorable climate for SMEs development of Afghanistan.

• Support to the Enabling Environment for Effective Private Sector Conference:
UNDP, Govt. of Afghanistan, Aga Khan Development Network (AKDN), World Bank and Asian Development Bank organized “Enabling Environment for Effective Private Sector” conference took place in Kabul on the 4th and 5th of June,2007. The conference focused on creating the conditions necessary to significantly increase the contribution of the private sector – defined as both for-profit business and not-for-profit civil society – to social, economic, and cultural development in Afghanistan. UNDP supported the ECO conference generally in communications which consist of simultaneous translation of the languages English, Dari, Russian and vice versa, the simultaneous translation system, conference sound system etc
• Community Based Solar Drying Facility, was established in 2006 in Dulana village, Parwan Province

3. Trade and Private Sector Development (TPSD 2007-2010)

The Trade and Private Sector Development Programme (TPSD) continues this assistance from 2007-2010. In collaboration with the Ministry of Commerce and Industry, other line Ministries and donors, as targeted specific areas to support future efforts to promote entrepreneurship, institutional development and an enabling environment for free enterprise.

TPSD components are:

• Trade and Private Sector Development Programme will target trade and investment support institutions. The objective is to enhance the capacity of national counterparts in both the private and public sectors so that an enabling environment can be created, which provides support for long-term private sector development.
• The programme will contribute to the creation of an inclusive regulatory environment through the design of a national SME policy and assisting in Afghanistan’s WTO accession preparations through policy advocacy and information dissemination.
• Trade and Private Sector Development Programme will focus on micro and small agriculturally-based businesses with cooperation Ministry of Commerce and Ministry of Rural Rehabilitation and Development (MRRD).

Future Priorities:

• Productive assistance provided to micro and small enterprises capable of import competition and/or exporting, in order for the benefits of economic growth to be more equitably distributed.
• Assistance provided to viable business-oriented institutions with long-term sustainability and business plans
• Mutually productive partnerships with other donors, ministries and institutions to be established to provide multiplier effects on benefits for the private sector.
• Continue to support this unique window of opportunity for Afghanistan to economically integrate more effectively within the region and international community

Partnerships and Resources:

Target Budget: US$ 8,481,500
Received Budget: US$ 900,000
Shortfall: US$ $ 7,581,500
Donor: UNDP

Focal Points:

Moqamuddin Siraj, UNDP Programme Officer (moqamuddin.siraj@undp.org)

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