Afghanistan, under a new and progressive constitution
emphasizing more on liberal, market-oriented trade policies giving
importance to the human values including women and human rights and
plural society, the country has started attracting foreign investors.
Taking advantage of the situation, the banking sector
in Pakistan is expanding the branch network in Afghanistan. The
initiative in this regard has been taken by the National Bank of
Pakistan had established in branch some two months ago and in this short
period of time has succeeded in developing a respectable deposit base.
According to NBP senior officials, the branch is doing extremely well
and is expected to carve an impressive place in Afghan market.
In effect, the State Bank of Pakistan as well as the
Central Bank of Afghanistan had allowed four banks from Pakistan to
establish their branches in Kabul. These were including National Bank,
Aga Khan Bank, Standard Chartered Bank and recently, the Habib Bank of
Pakistan after its privatization has been allowed by the Afghan
authorities to open their branch in Kabul.
The National Bank, has, however taken lead and the
results it has achieved so far are highly encouraging and there are good
reasons for other banks to follow suit.
The National Bank within two months of its operations
has been able to attract an over 500 million Euro and over $400 million
It is worth mentioning that Afghanistan has become a
major importer of construction materials including cement, ceramics,
tiles and a score allied goods used in building constructions.
The process of reconstruction in Afghanistan
substantiated with massive financial support extended by the developed
nations of the world has opened economic opportunities for the investors
in almost all segments of the Afghan economy.
Actually, the major irritant restraining the foreign
investors to move on in Afghanistan were stated to be the alleged
disturbed political conditions painted by the Western media. Although
there were some incidents of disturbances in Afghanistan, however, the
reports appearing in media did not match to the ground realities in
Afghanistan said an Afghan official at a recently held seminar in
Recently, the Afghan Government has accepted Habib
Bank's application for establishing a branch in Kabul. Finance Minister
Shaukat Aziz along with the Governor State Bank of Pakistan Dr. Ishrat
Husain is expected to visit Kabul within next two weeks to receive the
licence, it is reported
Afghanistan Central Bank Governor Dr. Anwar-ul-Haq
Ahady stated this while delivering a lecture on "prospects for
greater economic integration between Afghanistan and Pakistan" at a
seminar held in Karachi recently.
HBL would be second Pakistani bank among six
commercial foreign banks already operating in Kabul. The opening of HBL
branch in Afghanistan is expected to enhance the legal trade volume
between the two countries.
Dr. Ahady said that the Karzai administration was
pursuing very liberal and investment friendly policies to offer
attractive incentives to foreign investors. He pointed out that contrary
to past where banks used to operate under strictly state-regulated
policies, the central bank, abolishing all unnecessary restrictions,
passed a very liberal banking policy three months ago to open up the
banking sector to foreign investors. "We are generous in awarding
incense to foreign banks to operate in Afghanistan and have already
granted licenses to six foreign commercial banks."
He said that now there are no restriction pertaining
to foreign exchange limit or any other such restrictions pertaining to
foreign exchange limit or any other such restrictions, except money
laundering, which is only concern we have.
He highlighted the large and prospective Afghan
consumer goods market and invited Pakistani investors to install
manufacturing units there. He said that with a very thin
industrial-base, coupled with very flexible trade laws and low tariff
structure, Afghanistan market offers vast opportunities to both
Pakistan's industrials and traders. In this perspective, he emphasized
on greater economic integration between the two countries and referred
to NAFTA and European Union as perfect example of economic integration.
He observed that economic cooperation was more
feasible and practical on bilateral basis than on any multilateral forum
like ECO or SAARC. He suggested that economic integration between the
two countries did not only ensure efficient resource allocation but also
cause positive political consequences on the relation between the two
nations. He conceded that provision of security and infrastructure
facilities were pre-requisite to create an investment-friendly
atmosphere but denied that there was any such problem in Afghanistan.
With active involvement and heavy foreign financial
assistance from various countries of the world, especially USA, UK,
Japan, Germany etc in the on-going reconstruction of Afghanistan, the
political, economic and social milieu would improve a lot. In this
backdrop there was a silent revolution taking place in Afghanistan,
transforming all of its fundamental social and traditional values.