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Entrepreneur hopes to bottle success in Afghanistan

By Staff writer of The Christian Science Monitor / March 22, 2007


There is no chatter of gunfire or smell of smoke, but this plot of ground near Kabul is every bit as important to the future of Afghanistan as any battlefield teeming with Taliban.

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The warehouse that stands here, surrounded by high walls and razor wire, holds the hope of a more prosperous Afghanistan. It is the home of Afghanistan Beverage Industries Ltd., the nation's first bottled-water maker and employer of nearly 150 Afghans.

For all the focus on nascent democracy, it is jobs that Afghans say they want – and jobs that will diminish the Taliban's appeal here, analysts and generals agree. But a look at the Kabul beverage maker's experience reveals both the promise of the Afghan economy, and the enormous challenges that would keep it stuck in a decades-old pattern of smuggling, corruption, and small-time trade.

"It's not all gloom and doom," says Cecil Galloway, operations director of Afghanistan Beverages Industries, sitting in a well-appointed office that could just as easily be in Cleveland as Kabul. "But investing in Afghanistan is not easy," he adds. "You can't come in here and expect to make millions or make a profit your first year."

With uncertain security, a dysfunctional government, and the promise of only modest profits, entrepreneurs both here and abroad are wary of spending money to mine Afghanistan's emeralds or harvest its apricots. More than half the government's revenue comes from foreign aid, and more than one-third of the nation's gross domestic product is generated by the illegal opium trade.

Exploiting the power of geography

The result is that economic progress is stuttering, and investment is the province only of the most daring or optimistic.

"There is potential, but we have to be a lot more patient," says Michaela Prokop, an economist in the Kabul office of the Asian Development Bank (ADB).

By the numbers, the legal economy is doing moderately well. Since 2001, the country's gross domestic product has doubled, and the economy grew by 13.8 percent in the 2005-06 fiscal year, according to an ADB report.

But the starting point is low. Before 2001, the economy was ruined by 10 years of civil war and Taliban rule. Moreover, much of the new growth is funded by foreign aid or by the opium boom – with annual poppy production rising by 49 percent in 2006. These trends "will not sustain growth," according to the ADB report.

Building a more sustainable economy is Omar Zakhilwal's job. As president of the Afghanistan Investment Support Agency in Kabul, he sees plenty of opportunities.

Afghan fruits are among the best in the world. Before the jihad against the Soviets in the 1970s, Afghanistan grew 60 percent of the world's raisins.

Its mountains are also an untapped resource of natural resouorces: Some of the crown jewels of England, Russia, and Iran came from here, and the Hindu Kush contains some of the world's largest iron-ore reserves, as well as substantial amounts of copper and coal.