Afghanistan has recently made substantial progress, recovering from 30 years of war and economic devastation. For more than a decade, the economy has grown at an average annual rate of more than 9 percent, leading to a tripling of per capita income. Still, it continues to be one of the poorest countries in the world. To sustain its growth, Afghanistan needs to enable private investment, create jobs, and enhance fiscal sustainability.
Funded by USAID, the Afghanistan Trade and Revenue Project (ATAR) project builds on the work of previous trade projects in the country that tackled issues of access and integration. In this same vein, ATAR addresses existing economic policy and regulatory obstacles that inhibit trade growth in the country. To achieve this goal, the program is collaborating with the public and the private sectors to promote trade through reform of three critical areas: trade policy liberalization, regional trade integration, and customs and tax reform.
One of the primary goals of the program is to support Afghanistan’s accession to the World Trade Organization. To accomplish this, ATAR is facilitating a shift toward more liberalized trade policies. The project is working with key government institutions and officials and conducting accession negotiations, drafting trade and regulatory legislation, and instituting reforms. These new policies will attract investment and enable the private sector to grow and prosper.
A second goal, integration of regional trade, is critical to build Afghanistan’s economy and to ensure economic growth in the broader Central Asia region. Such growth can only happen when Afghanistan is better integrated in regional and global trade. To that end, ATAR is working in the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan to develop cross-border transit agreements and improve conditions for trade. The project is also collaborating with other USAID programs to engage the private sector by sponsoring regional trade fairs, conferences, and other economic forums, which supports Afghan businesses and business associations.
Finally, because increased domestic revenue generation is vital to the long-term stability of Afghanistan, the project is working hand-in-hand with the government to increase its capacity to generate revenue via taxes and customs. By helping the government create a streamlined and transparent system to collect revenue, ATAR will reduce corruption and lessen Afghanistan’s dependence on donor funding.