Harakat: Creating a better environment for business in Afghanistan

In December 2007, the UK Government announced its intention to set up a facility to improve the environment for business in Afghanistan.

Harakat, which means 'movement' in Dari, was launched in June 2008 (formerly known as the Afghanistan Investment Climate Facility) with £30m from DFID to tackle the main constraints to doing business in Afghanistan.

In a country where unemployment is estimated to be as high as 40% - improving the business environment is vital for creating jobs and tackling poverty.

'Swift and measurable impact'

The facility provides grant funds to implementing partners from the government, private sector and civil society. A board comprised of prominent members of the Afghan private sector selects projects which will have a swift and measurable impact on the business environment.

One year on from its launch, the facility has approved a number of high-profile projects:

1. Afghanistan Commercial Land Agency. Access to land with secure title has been identified as a major challenge for the private sector. In partnership with the Ministry of Agriculture, Irrigation and Livestock the project will identify government land that could be leased to the private sector and create a “Land Lease One-Stop-Window” to facilitate this process.
2. Afghanistan Secured Lending Project. The objective of this project is to improve access to finance by facilitating the use of movable assets as collateral. This will be achieved by a three pronged approach of regulatory reform, capacity building and the creation of an electronic collateral registry.  The project will be implemented by DAB (the Central Bank) with the assistance of IFC advisory services.
3. Information and Awareness program on Commercial Laws. Working with the Afghanistan Chamber of Commerce and Industry this project will increase awareness and engagement amongst Afghan business people regarding commercial laws. A series of workshops will be held over four months in seven provinces in which commercial laws will be explained and debated.
4. 24 hour Call Centre for Exporters. In collaboration with the Export Promotion Agency, the programme will establish a 24-hour call centre administering a well advertised hotline which will record incidences of corruption and insecurity on key transit routes throughout Afghanistan. The information will allow effective advocacy by the private sector and help other government departments to tackle these barriers to increased trade with neighbouring countries.
5. Quality standards for Afghan goods. The project will support the National Standards Agency to develop procedures for national standards, support the capacity building of technical committees and the development of up to 30 mandatory national standards in order to get higher prices for Afghan products in the three key sectors of pharmaceutical and cosmetics, food and beverages and carpet weaving. The project will also support work with the private sector to help them to meet these standards.

Harakat is the first venture of its kind in Afghanistan. The facility is staffed almost entirely by Afghans who understand the local context.

During the first year of operation they have built strong relations with the public and private sector and several other donors have expressed an interest in investing in the facility.

For further information visit Harakat’s website or contact Chris Bold or Doreen Broska