Why the premonitory suspense? Because we are incredibly excited to launch our Afghanistan Marketplace Impact Report. This report will provide more detail on key results that the Marketplace programme has achieved in Afghanistan since 2006.  Now, something you should know about Building Markets (that is, if you haven’t already gathered as much) is that we’re crazy about a thing called impact. Call it the development practitioners’ asymptote; we strive to empirically measure the impact of our projects, in terms of their ability to achieve short, medium and long-term outcomes. The fact that we are able to do this during the lifespan of our projects is unfathomably enthralling, so you can see why impact measurement gets us swinging like a 1960s Bollywood movie.

Since we’re on the subject of impact, I should also add that we were thrilled to receive this wonderful thank-you letter from our local partner in Kabul: the Afghanistan Chamber of Commerce and Industries (ACCI) earlier in April this year. 

What could this letter possibly have to do with impact? Quite a lot actually, or we wouldn’t be quite as pleased! In autumn 2011, following a rigorous selection process, Building Markets formalized a partnership agreement with the Afghanistan Chamber of Commerce and Industries. As our local partner in Kabul, we were committing to work with the ACCI to build the organizations’ institutional capacity to independently deliver international procurement training and tender distribution services in Kabul after the close of the Afghanistan Marketplace project on 30 March 2012.

Recognizing that there is significant demand for each of these services, the Building Markets’ team worked closely with the ACCI over a six-month period, so as to ensure an effective transfer of services, and in so doing continue to maximise the associated dollar value impact of these services. This included the development of a nifty tender-distribution website which would be used by the ACCI to disseminate information on tenders to registered subscribers via email and SMS.

Since 2006, the Afghanistan Marketplace has recorded feedback from transactions worth $334 million and representing 860 contracts that suppliers attributed to some extent to the training and tender distribution services provided by Building Markets. (What’s this? Another teaser from our upcoming impact report!) Through the continuation of these services under the ACCI, Afghan small and medium enterprises will continue to positively benefit from an increased access to and awareness of business opportunities. Having reaffirmed its commitment to sustaining the impact of these services in a letter to Building Markets, now you can see why we were so excited!

It has been a month since the closure of the Afghanistan Marketplace project, and there is already demonstrable evidence supporting the ACCI’s commitment to translating their words into deeds. For instance, the nifty tender distribution site is now fully populated with tenders and has become a bustling hub of activity, having received over 44,000 page views in the month of April alone! What’s more, the ACCI now encourage businesses to advertise on this website. This initiative will give businesses the opportunity to promote themselves on a public forum with high levels of site traffic, while permitting the ACCI to recoup site costs and generate revenues through advertising. Enough said. Cue the Bollywood Swing!

These stories were written by Nooruddin Bakhshi. He is an Afghan journalist who has worked for many years with The Financial Times, The Guardian and The Times. He has also worked on several NGO communication projects. He is based in Kabul.

—

Ramazan

Ramazan, 11, wakes early in Lashkar Gah, performs ablutions and morning prayers before enjoying a breakfast of sugary tea with bread, jam and cream. Meanwhile, on the other side of the province’s capital, Ghawaz Mohammad Khan, also 11, tucks into some old bread and tea. Sometimes, finances permitting, he is able to add some sugar. After breakfast, Ramazan will do a little bit of studying before walking to school. Ghawaz, too, will be hitting the streets, although schooling will play no part in his daily grind. “Go out and earn some money,” his blind father tells him. “Go and earn 50 afs ($1) for this family,” he adds, in reference to their mother and his six siblings.

Ghawaz is a spandi. He carries a blackened tin with makeshift handles from which an aromatic smoke drifts from a burning herb called spand. Ghawaz plies the streets of Lashkar Gah looking for handouts from pedestrians. “I bless you, I bless you, give me five afghanis (10c),” he touts to anyone he sees. In Afghan folklore, the smoke is said to ward off evil thoughts. Some give, some don’t, and on a good day, Ghawaz says, he will earn 50-60afs ($1). He admits that he’d rather be at school, optimistically expressing a wish to become a doctor.

Ghawaz

Ramazan says he knows he is lucky to have such a supportive family for his education and wishes the parents of boys like Ghawaz were like-minded. “My message to them is to let their children go to school  so they can be somebody in the future,” Ramazan says. According to the World DataBank, in 2010, only 46% of Afghan children were enrolled in secondary school.

Ramazan is busy studying in the fifth class at Martyr Mohammad Anwar Khan High School. Six days a week, for four hours each day, he attends overflowing classes at the school. The classrooms are full, with makeshift classrooms for younger children held outside, while older students take up seats at desks set up amongst the playground. Ramazan studies Afghanistan’s two official languages, Pashtu and Dari, as well as English, social studies, math, and art. “I want to study to become an engineer to help my country,” he says. It’s a view that is echoed by his father, who despite the family’s limited wealth, is keen for his seven children to become educated. When school finishes at noon, Ramazan’s day is by no means over. He fills the two hour gap between school and his six-day-a-week English classes at a private school by hitting his textbooks.

These stories were written by Nooruddin Bakhshi. He is an Afghan journalist who has worked for many years with The Financial Times, The Guardian and The Times. He has also worked on several NGO communication projects. He is based in Kabul.

—

The Father of the Nation park in the city has a ferris wheel, a fountain, and some play equipment. All have seen better days and only the play equipment is in regular working order. Still, when the Islamic Sabbath of Friday comes, the park draws in scores of locals, all men and boys, who embrace the park for picnics, football and volleyball, and a spot of kalk janji (partridge fighting). It is one of the few recreational areas in dusty Lashkar Gah that has grass and a bit of shade. And no-one is worried about security. The park sits across the Helmand river, at the Bolan Bridge, which leads to Marjah, and there is a heavy presence of police and officers from the National Directorate of Security.

Fifteen-year-old Sultan and his friends take to the park each Friday, coming with deep-fried chips and soft drinks. “We are facing our lives with happiness here,” he says of the city. The eighth-grade student says his joy comes from the fact that he and his fellow pupils have teachers for every class, and they can go to school without fear. “On every traffic circle, there are policemen. When I see them, I know they are looking out for trouble, so this makes me feel safe.” While Lashkar Gah is still by no means entirely peaceful, violence is more of a rarity now, than an accepted part of daily life.

Sultan says at the end of the day, after kicking the football around in three-side scratch games, he and his friends return home, pray, and then do some studying. At night, with his family, they retire in front of the television to watch one of the Pashtun-language channels before listening to Afghan music on the radio. Sultan says enjoying these times is important.

These stories were written by Nooruddin Bakhshi. He is an Afghan journalist who has worked for many years with The Financial Times, The Guardian and The Times. He has also worked on several NGO communication projects. He is based in Kabul.

—

Two-and-a-half years after its grand opening, the Omaid Bahar Fruit Processing factory in Kabul still looks brand new. The Italian and Swedish processing equipment still has its shine, and each of the factory’s buildings looks spotless. A lesser-known fact is that this factory produces tens of thousands of liters of fruit juice during Afghanistan’s spring, summer and autumn seasons. The company became the first, and only, fruit juice concentrate processing plant in Afghanistan and is helping to provide a long term viable market for farmers across the country.

Pomegranates, a popular crop in southern Afghanistan, especially in Helmand, are trucked up to Kabul where they are deposited in one of nine large cool rooms. Factory manager, Qasim Hamidi walks the factory floor proudly showing how the pomegranates are sorted, washed, crushed and then put on a long journey through metal pipes and several other stages of preparing the fruit juice for packaging. It takes about 12 hours before the juice concentrate is packed into sealable one-liter cartons. It is a process designed to meet international standards for food processing and shipping.

Turning peaches, melons, apples, mulberries and pomegranates, all of which are grown inside Afghanistan, into fruit juices was usually done outof-country. Picked fruits were exported to Pakistan or Iran to be processed, packaged and imported back into Afghanistan. The Omaid Bahar factory has removed the need for neighbouring state’s involvement, which keeps more jobs and more money within Afghanistan. The company’s brand, Fruit Plus is sold both within Afghanistan and abroad. It is exported to the United Kingdom, the United States, Pakistan, Russia, as well as several other central Asian countries. Next time you’re out grocery shopping, keep an eye out for Fruit Plus!

These stories were written by Nooruddin Bakhshi. He is an Afghan journalist who has worked for many years with The Financial Times, The Guardian and The Times. He has also worked on several NGO communication projects. He is based in Kabul.

—

Engineer Mohammad Ibrahimi is the proud owner of the Farm Services Centre, a Helmandi business that provides chemical aids for local farmers. Fueled by the Helmand river, there are expansive, well irrigated lands that are ripe for licit crops and improved yield with the aid of science. This is where Mr. Ibrahimi comes in. With offices in both Helmand and neighbouring Nimroz province, he is looking to expand further. He sees an expanding market and is keen to increase his team of 15 permanent employees. He says Building Markets has been invaluable in teaching modern business methods for doing business with international clients stating that, “Building Markets have also helped us by showing how to correctly register our business on various on-line databases and to have a web-presence to market their company. Building Markets also keeps us informed about new contract tender opportunities with their email and text message service, which is very helpful.”

Mr. Ibrahimi, shown right proudly displaying his chemical fertilizers, candidly admits that hearing reports from farmers about how his products have helped them brings untold joy. He strongly believes that supporting Helmandi businesses is crucial for improving the province’s stability and security. “We are the ones living in these unstable areas, and it’s better if the money stayed locally, to help improve security.”

“Our aims are to develop the lives of the farmers, our customers, raising the quality of their products and finding them markets for their products, all while ensuring none of it is harmful for the environment,” Ibrahimi says.

Security remains one of the company’s biggest concerns. The Ibrahimi family chooses not to advertise their business, squirreling its signs behind the 2m wall which surrounds its showroom. Despite this low profile approach, Mr Ibrahimi says that there is a large appetite for his products. In addition to fertilizers and seeds, he rents and sells farming equipment including pumps, tractors and seeding machines. He keeps a greenhouse at back on display for would-be buyers and he says farmers are increasingly looking for better ways to handle their crops.

These stories were written by Nooruddin Bakhshi. He is an Afghan journalist who has worked for many years with The Financial Times, The Guardian and The Times. He has also worked on several NGO communication projects. He is based in Kabul.

—

In Helmand Province, mud-caked boulders are yanked up from the earth, revealing huge slabs of onyx. These slabs are then loaded onto trucks and driven for three days across the sandy divides of the region before reaching the Helmand Stone and Furniture Joint Company in the provincial capital of Lashkar Gah. Each month, a team of 30 trucks shuttles back and forth between the mines and Lashkar Gah transporting more than 200 tonnes of onyx over 360 km. At the factory, smaller stones are separated and cut into thin slices while bigger stones are sawn into either large panels, or thicker stumps.

The company’s factory is one of the oldest surviving buildings in Lashkar Gah, having begun
operations under the reign of King Zahir Shah in the early 1970s, and remains one of the provinces largest employers, with 80 employees working in the mines alone.

At the factory, the stone is moved into an airy workshop where a dozen men work busily with lathes, using mechanical polishers or sometimes their bare hands to finesse the onyx. Currently, the Helmand stone and Furniture Joint Company employs a total of 230 individuals. Fifty year old Sakhad, pictured below, has worked at the factory for 35 years, and is the in-house master of craft.

There are many challenges for businesses operating in Helmand province, explains Ali Ahmed Feroz, the factory manager. One of the main impediments to work is the lack of regular electricity; the factory gets three hours of city power a day, then it must rely on generators, which are much more expensive. He also cites the spectre of corruption where some government officials solicit bribes in exchange for licenses and certification as a challenge to doing business. But he maintains that the government remains supportive. Finally, there is the sheer scope of the logistics of transporting the onyx from the mines to the factory. “It’s across sand, the whole way,” explains Mr. Feroz. “But security there is good.” Despite these challenges, the factory produces a wide range of products including plates, bowls, ashtrays, name plates and even miniature mosques.

These stories were written by Nooruddin Bakhshi. He is an Afghan journalist who has worked for many years with The Financial Times, The Guardian and The Times. He has also worked on several NGO communication projects. He is based in Kabul.

—

Adapt and Prosper

Abdul Ghani had had a moderately successful business as a pharmacist, but the building boom in southern Afghanistan was too lucrative an opportunity to pass up! Handing the reigns of the pharmacy to one of his brothers, he and another brother started a construction company. He admits that it was a tough transition, but four years later, he says it was the wisest decision he has made.

Having quickly learned the ropes of the construction industry, his new company was soon contracted to work on a canal-cleaning project that employed 250 people. He credits Building Markets with greatly assisting the firm by conducting training sessions on how to write proposals for international donors, and giving advice on project management and marketing. “Before we had no idea what to do. But they [Building Markets] have given us a lot of information that has helped our business.”

Security Concerns Challenge Growth

One night, when Haji Abdul Sattar Popal’s company was working on a road project in Helmand’s Nawa district, the Taliban attacked. Two pieces of heavy machinery, including a road grader, were gutted by fire. It cost him $100,000 and almost crippled the family business. Haji Abdul, pictured right, has worked hard to rebuild the company, but the attack meant he had to lay off 25 employees, reducing the number of staff in his employ to 45. While the building of roads and canals remains a cornerstone of this company’s work, security remains one of the biggest concerns. “If security was better, we could finish contracts quicker and then start others.”

His office, on the outskirts of Lashkar Gah city, is full of heavy machinery including graders, forklifts and frontend loaders. Building Markets has provided training to him and some of his employees, as well as having helped him register his business. The business has also proved quite adept as an importer of heavy machinery for other businesses. Haji Abdul speaks proudly of his international contacts. “We have people in Japan, London and Dubai. We can show customers pictures of the machines on the internet and they can order them,” he says. Ensuring the machines are imported correctly is vital to ensuring the business runs smoothly, he says, reducing the likelihood of encountering problems with the government.

These stories were written by Nooruddin Bakhshi. He is an Afghan journalist who has worked for many years with The Financial Times, The Guardian and The Times. He has also worked on several NGO communication projects. He is based in Kabul.

—

When ten men got together to form the Helmand National Investors Association — HNIA (formerly known as the Helmand Business Association) in 2010, it was a step towards providing one of the bases needed for formalizing the province’s business sector. While most of the province, the country’s largest, is composed of either sole or small enterprises, the group believed that in order to encourage larger investment, a collective group was needed.

“We needed a voice and an organization that could help solve any problem that businesses were having with the government or other businesses,” said HNIA Deputy Haji Hamidullah.

The association could act as a lobby group to convey its concerns to the government and help improve the conditions for the province’s biggest employers to foster more economic growth and therefore increase local employment. But its early success was to give would-be-investors a go-to point. Here, BM’s team of business development experts helped the HNIA augment its entrepreneurial services, particularly its networking service, which introduces out-of-province and international investors to the HNIA members.

The Bost Improved Seed Company is a member of the HNIA. Mr. Mohammad Akar, the company’s leader, is critical of the government’s attitude toward business. “There is no encouragement for businesses to invest,” he says. While the Helmand river basin has the potential to produce the best sugar and the best wheat, he says the government has done little to help achieve these goals. He adds that too many farmers continue to focus on growing opium when the government needs to do more to discourage it. “The government should do more to show that if you invest in the black thing (opium) you will go to jail, but if you invest in legal crops, you will get money, power and help the country,” Mr Akar said.

There are currently 250 businesses registered with the HNIA, showing the scarcity of largescale businesses in Helmand. Of these, 60 per cent are involved in construction. Most of the others are involved in agriculture.

Dividend Trust hosted an Afghan First Business Matchmaking Event in Kabul Afghanistan.

USACE is dedicated to the promotion of small and large businesses around the world, with a single-minded goal to develop fluid and
productive partnerships. Their programs in Afghanistan include the National Army, National Police, Operations and Maintenance, MILCON, Infrastructure, Services and planning.

In 2012 USACE will award 81 contracts throughout Afghanistan, worth approximately $ 1.2B.

Businesses in networking session

USACE follows the Afghan First policy, which is a program that allows Afghan owned businesses to be awarded USACE contracts. The program provides Afghan business owners and workers with a viable source of income while improving their skills and help grow the economy of Afghanistan.

The full-day event connected approximately 130 Afghan-owned construction sector businesses from Kabul and the Northern provinces with tangible business opportunities from USACE. Afghan businesses operating in the construction sector have the greatest potential to create jobs, boost private sector development, and foster individual capacity development. At the event buyers, including USACE and other international military forces, had the opportunity to discuss their upcoming contracting opportunities face-to-face with the Afghan companies.

Businesses share thier ideas,

Because PDT’s business directory is searchable by sector and province, the database made it much easier for USACE to find all of the relevant Afghan businesses to invite to the event. PDT also helped USACE by confirming the attendees through its call center agents.

The goal of the event was not only to strengthen the linkages between Afghan businesses and USACE, but also to connect Afghan
businesses from different provinces to develop partnerships, joint ventures and sub-contracts. Developing B2B connections is even more important on the eve of the international community’s withdrawal from Afghanistan. The event allowed Afghan-owned businesses to market their goods and services directly to USACE and other Afghan businesses, enabled USACE to gain insight into the breadth and quality of services offered by Afghan companies, and provided a forum for USACE to share and discuss their upcoming contracting opportunities, many of which
are located in the Northern provinces.

the start of the event, while Mr. Kieth Alaniz was giving presentation.

The event had two main parts. First were presentations by Captain Keith Alaniz of USACE and Hamidullah Farhat, business advisor for Kabul
Regional Contracting Center (KRCC). Mr. Farhat explained all the procedures and requirements of KRCC. Captain Alaniz gave information about USACE’s current business opportunities and the requirements of USACE. He also gave examples of previous contracts awarded by USACE to Afghan businesses and the parts of their proposals that most helped them win those contracts.

PDTs deputy country director, Akbar Ahmadzai spoke about the importance of the event and moderated it as well.

The second part of the event was the open networking session, in which the Kabuli and provincial businesses shared their ideas and discussed
the current business opportunities and challenges. The Afghan businesses were seated by province at small roundtables. The Kabuli businesses rotated from table to table on a structured schedule, networking with those businesses operating in provinces which were relevant to their business needs. This controlled networking method increased the efficiency and quality of the interaction for both business owners from Kabul and the Northern provinces. Other stakeholders were welcome to observe the controlled networking from seats within the ballroom.  Businesses also filled out the survey forms that were distributed at the beginning of the event by PDT.

At the end of the event there were four information tables for PDT, USACE, Afghanistan Builders Association (ABA) and KRCC, who provided
information to the businesses.

Overall, the event was a success and provided an opportunity for Afghan businesses to make connections that will help their companies win
contracts in the short-term and grow their businesses in the long-term.

Put this into the context of an important issue being raised at Davos this week:  youth unemployment. The numbers are stark: in some countries of the Arab world, up to 90% of 16-to-24 year olds are unemployed. In Spain, it’s nearly 50%. In the United States, the youth unemployment rate is 23%. In the UK, it’s 22%.

Then there’s the lack of basic life skills. Many youngsters today don’t know the basics, from getting on with co-workers to having entrepreneurial skills starting with simple street savvy.

In South Korea, it’s the other way round. So many people are now university graduates that the country is running out of people to fill blue-collar jobs.

The UN’s International Labor Organization (ILO) reports that worldwide, some 200 million people are unemployed, with 75 million of those unemployed between the ages of 16 and 24. And yet the legislated response of developed nations has so far been to increase the age of retirement for us older generations who are already currently employed—resulting in even fewer vacancies for the 40 million or so young people who are entering the workforce as every year goes by.

Does this make sense?

World leaders in Davos are waking up. Young people who are unemployed for a long time will earn less throughout their whole lives. They will be less employable in the future. They don’t have the skills that businesses are crying out for. They are more likely to have long-term health problems.

Our world is plagued by youth unemployment, which is leading to a greater demand for government benefits at the same time that commercial production, plus consumption and hence economic growth that contribute to governments’ fiscal revenues are all falling. All this leads to escalating sovereign debts, which are likely to cause further social disruptions. The leaders in Davos say that “we’re sitting on a social and economic time bomb“.

There’s another term for it: the lost generation. Or as one business school professor puts it: “Unemployment sucks. Youth unemployment sucks even more.”

Sadly we also live in a world where wealth creation has become uncoupled from job creation. This once-close connection is ruptured. Take Mitt Romney who made his fortune by laying people off. Take me, among others: I made the equivalent of two months’ salary over the last four months simply by converting my euros into US dollars last September and then converting those dollars into UK pounds sterling this month. In such a way millions of zeros have been added to speculators’ balance sheets all over the world during the last calendar quarter without adding a single job.

All that said, alhamdulillah for the Afghanistan Marketplace project!