3 Questions with Safir Sahar on Afghanistan's Accession to the World Trade Organization


Abdul Safir Sahar is the former chief of party of the Afghanistan Trade and Revenue Project (ATAR), a project aimed at improving business climate to enable private investment, create jobs, and enhance trade and fiscal sustainability. He now serves as a director in the Afghanistan regional business unit in Washington, D.C. 

How does accession to the World Trade Organization (WTO) impact Afghanistan? 

The Afghan companies that will benefit from WTO membership will predominantly be those companies with current and potential capacity to export. The WTO provides guaranteed, secured, and non-discriminatory market access for Afghan producers in the markets of WTO countries, which constitute more than 95 percent of world trade in goods and services. The WTO will also guarantee transit for Afghan vehicles and goods through the territory of WTO countries.

The overall economy is expected to gain from WTO accession, as well. The fact that Afghanistan became a WTO member — with a sound legislative framework in place and access to markets — will encourage investment, which will create jobs, increase real income and standards of living, enlarge the tax base, and lead to economic growth. Particularly, WTO rules will create a favorable business environment, which will reduce the cost for Afghan businesses and make them competitive domestically and abroad.

How will WTO membership protect Afghanistan from dumping, subsidizing, and excessive imports? How will imports be affected? 

Dumping, or exporting products at a price that is lower in the foreign market than the price charged in the domestic market, can cause material injury for Afghan producers. As a WTO member, Afghanistan is allowed to apply anti-dumping duties for additional protective measures. In case of subsidization, which can also cause material injury to Afghan producers, Afghanistan is allowed under the WTO to apply countervailing duties for additional protective measures.

In case of sudden and excessive imports, which can also be harmful to Afghan producers, Afghanistan can apply safeguard measures by exceeding the WTO bound rates to allow protection for a temporary period of time (three years renewable).  

Overall, imports are not likely to be significantly affected, given that most tariffs will not be changed. There might be a slight increase in the importation of information technology products, which will be good from an economic development perspective, as it will increase productivity and reduce costs of doing business and thus increase competitiveness.

How will WTO membership impact investment in Afghanistan? Which exports will be most affected by WTO membership, and how will membership affect small- and medium-sized enterprises (SMEs)? 

In general, WTO membership is expected to increase exports across all sectors in varying degrees. There will be an increase in production in companies with current and potential capacity to export. Investment is expected to increase, given improvements in the business environment based on WTO rules, access to other markets, and ease of transit. Sectors in which investment is likely to occur are the value-added industry in both the mining and agricultural sectors, as well as construction materials and carpets. There will be a need to identify the comparative advantage of Afghanistan to discover where new production, particularly manufacturing, can be developed, given WTO access.

Under the WTO, it will also be possible for Afghanistan to run an infant industries development policy, or use tariff protection to develop infant industries. First, bound rates (maximum rate of tariff allowed by WTO to any member state for imports from another member state) offer a significant policy space. Second, for most key industries where Afghanistan will likely develop infant industry, the rates were left unbound — meaning Afghanistan can decide on any level of protection it wishes. Third, Afghanistan, as a WTO member, can negotiate higher bound rates (to apply permanently) for goods concerning certain industries that it wishes to develop.

Agricultural exports are the primary beneficiaries from WTO membership. The markets of WTO countries can no longer prohibit, restrict, discriminate against, or impose any arbitrary measures on Afghan agricultural exports. In addition, transit will have to be facilitated which will transport fresh Afghan agricultural exports much more quickly to destination markets.

WTO members have obligations to help Afghanistan, as a Least Developed Countries member, to improve food safety and quality standards of Afghan agricultural products. This will make these products more competitive in Afghanistan and export markets. Additionally, the WTO requires countries to recognize certification and testing procedures and encourages mutual recognition. This will, in turn, reduce costs of exporting agricultural products and facilitate entry to WTO markets.

Regarding SMEs, the application of the WTO rules in Afghanistan are expected to reduce the cost of doing business for SMEs and will facilitate trade transactions by SMEs. In this way, SMEs can focus their limited resources to improve production and capacity.

Learn more about Chemonics' work in economic growth and trade.

Leave a Comment

Tourism Can Be an Engine of Economic Growth — If It's Done Right


By Preston Motes and Anna Lynott Tourism is an industry with the capability to transform international development. Tourism is the largest service industry globally, accounting for nearly 10 percent of global GDP. Nearly 293 million jobs, or one in eleven jobs around the world, are within the tourism sector. Tourism is currently featured in three of the Sustainable Development Goals (SDGs), including Goal 8 which “requires societies to create the conditions that allow people to have quality jobs...

Read More »

Q&A with Christy Sisko on the Revenue Capital Approach (Part 2 of 2)


This post is the second of a two-part blog series, originally featured on Microlinks, showcasing a question and answer session with Christy Sisko, technical manager for Asia and Middle East Economic Growth Best Practices at Chemonics, on the revenue capital approach and its revolutionary effect on the small and medium enterprise (SME) financing world. This post is a follow-up piece to Microlinks' April 25 event, Revenue Capital: Reducing, Rewarding, and Realigning Risk, which explored key...

Read More »

Q&A with Christy Sisko on the Revenue Capital Approach


This post is the first of a two-part blog series, originally featured on Microlinks, showcasing a question and answer session with Christy Sisko, technical manager for Asia and Middle East Economic Growth Best Practices at Chemonics, on the revenue capital approach and its revolutionary effect on the small and medium enterprise (SME) financing world. This post is a follow-up piece to Microlinks' April 25 event, Revenue Capital: Reducing, Rewarding, and Realigning Risk, which explored key...

Read More »

To Bring On Partners, Know Your Pitch


In development, we are constantly improving our ability to do meaningful work and becoming more demand-driven in our approaches. While some improvements are disruptive technologies like digital financial services, others are simple changes to the way we operate. One of the topics from the recent SEEP Women’s Economic Empowerment Global Learning Forum that really resonated with me and has been utilized with great success on our USAID Colombia Rural Finance Initiative (RFI) is the concept of...

Read More »

3 Questions with Tracy Shanks: Lighting the Investment Spark


Tracy Shanks is a director in Chemonics’ West Africa and Haiti Division and a former senior vice president of the Afghanistan and South America divisions. She has 18 years of experience in private sector development, trade, and investments, and has served as the chief of party for three USAID projects in the economic growth sector. You’ve had experience stimulating investment in different countries, from Paraguay to Palestine. What are some ways that you’ve attracted investors in your career? I’ve ...

Read More »

Transforming Public Finance — A Proven and Scalable Information Systems Solution in Haiti


“Reducing corruption stands at the heart of the recently established Sustainable Development Goals (SDGs).” The World Bank made this statement in its November 2016 brief on anti-corruption, and the concept doesn’t necessarily come as a surprise. Corruption, inefficiency, and lack of transparency often hurt vulnerable groups the most, putting up barriers and distorting access to resources and services. Blockchain technology has captured the imagination and vision of development practitioners...

Read More »

Promoting Secured Transaction Reform in the Middle East and North Africa


Modern secured transaction laws increase the availability of credit and reduce its cost, by ensuring that lenders can collect debt and enforce their rights in movable property collateral through a timely and inexpensive process. From a global perspective, the Middle East and North Africa (MENA) region is significantly behind in pursuing and operationalizing reforms to increase access to and availability of secured credit. As seen in the table below with data from the latest World Bank Enterprise...

Read More »

4 Ways Women Can Support Women’s Economic Empowerment


USAID’s recent Women’s Economic Empowerment and Equality Workshop in Johannesburg, South Africa, brought together nearly 100 men and women dedicated to advancing women’s economic empowerment and equality throughout Africa and beyond. Over a period of two and a half days, we discussed USAID’s new draft Framework to Promote Women’s Economic Empowerment and Equality, listened to expert-led panel discussions, participated in technical working groups, and got know each other as we tackled tough...

Read More »

Why Electronic Payments Will Support Inclusive Growth in the Philippines


People often give me puzzled looks when I try to describe my job here, and I don’t blame them. Since 2015 I have worked on an international development program that supports the Philippines’ shift from a cash-based economy to a cash-light economy, which will improve the livelihoods of Filipinos by getting more people involved in the formal economy. Got it? If so, I hope to see you at our next event. But if you’re like most people I meet, this explanation leaves more than a little to be desired,...

Read More »

3 Questions with Anne Spahr: From A to Z on Economic Growth in Asia and the Middle East


Anne Spahr is the chief of party of the USAID-funded Asia and Middle East Economic Growth (AMEG) Best Practices Project. She is a micro, small, and medium enterprise (MSME) finance and business development specialist with more than 10 years of experience working with farmers, fishers, and small business owners in Africa, Latin America, Asia, and the Middle East. What trends in the Asia and Middle East regions are you seeing around economic growth? Are there any challenges and opportunities that...

Read More »

In Focus: The Nuts and Bolts of STEM


An array of sensors, batteries, motors, and cables lies before wide-eyed students in a classroom in Moldova. These children see the opportunity to build, tinker, and explore. But for educators, this is a long-term investment in the next generation of science, technology, engineering, and math (STEM) professionals. Information technology (IT) is a rapidly growing sector in Moldova and employs more than 20,000 people. Yet with fewer students studying STEM in university, there is a shortage...

Read More »

3 Questions with Mert Tangonan: Toward a Cashless Economy in the Philippines


Mert Tangonan is the chief of party of USAID’s E-PESO activity in the Philippines. E-PESO seeks to accelerate the shift toward digital payments for broad-based economic growth and financial inclusion in the Philippines. Learn more about how e-payments promote economic growth in a Mert Tangonan's video interview. Electronic payments go beyond mobile money, and include electronic funds transfers, credit card transactions, and more. What everyday challenges does the Philippines experience considering...

Read More »

Doing Business as a Tool for Economic Reform


By Matthew Johnson, Kreshnik Kurtishi, and Terence Slywka The World Bank Doing Business report The World Bank’s Doing Business report is an objective and comparative assessment that measures how easy it is to start, run, and grow a business. For example, the report measures the time and cost it takes to register a business, get electricity, and enforce contracts. For over a decade, it has generated significant attention from national governments and has become a trusted tool for countries to use...

Read More »

Women’s Economic Empowerment – Beyond the Obvious Benefits


As we explore economic empowerment during the Global to Local campaign and prepare for Global Entrepreneurship Week, we reflect on what it takes to empower women economically. Today, women across the globe still too often face implicit and explicit barriers to full economic participation. As practitioners working for global development, we do right to pause and laud both women who are fulfilling their economic potential through entrepreneurship and the programs that have supported them in...

Read More »

Access to Finance for Youth: An Opportunity in Afghanistan


What is financial inclusion? Financial inclusion seeks to increase the number of individuals who are able to access formal financial services, with a focus on providing access to marginalized populations such as youth or women. According to the World Bank, almost 40 percent of the adults in the world do not use formal financial services, such as licensed commercial and development banks, savings and loan companies, and deposit-taking entities. The majority of the individuals who do not access...

Read More »

Bridging Gaps in Financial Services with Digital Technology


This post originally appeared on SEEP's blog. Chemonics is a proud member of SEEP. Have you ever wondered if there is a better way to expand and deepen financial inclusion? Have you tried forming innovative partnerships or using digital technology? Financial inclusion is a building block of strong economies throughout the world. However, in many developing countries, we consistently see constraints to financial inclusion. For example, financial service providers do not provide services in...

Read More »

Making Market Development Work When Crisis Hits


This blog post originally appeared on SEEP's blog. Chemonics is a proud member of SEEP. Picture this: Your market development program is going well. Your strategy aligns with the national government’s objectives. Your donor is happy. Business owners are happy. People are getting jobs and earning income. The market is growing. And then a crisis hits. The market dries up. Job growth grinds to a halt. The government changes its strategy. What do you do? Market development can be challenging in the best...

Read More »

Can Islamic Banking Increase Afghans’ Access to Finance?


The World Bank estimates that only 10 percent of Afghans hold an account with a financial institution, far below the average of 22 percent for low-income nations. The reasons for this are numerous: many Afghans report mistrust of banks, some lack the proper documentation to access financial services, and those living outside major population centers find great difficulty in even traveling to a bank. Of particular note from the World Bank’s Global Findex is that nearly one-quarter of those...

Read More »

Research and Action to Promote Regional Trade in South Asia


The United States’ economic future is inextricably linked to Asia. A full quarter of the goods and services exported by the United States are bound for Asia, and about 30 percent of our imports come from the region. In addition, exports to Asia support more than a million American jobs. As such, the United States is committed to strengthening its economic relationship with Asia and ensuring that the benefits are shared broadly. This shared prosperity is founded on sustainable, inclusive growth...

Read More »