Afghanistan Economic Structure

By: EconomyWatch Content   Date: 9 March 2010

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Economically speaking, Afghanistan is a very poor country in western Asia. The country is a member of the Organization of the Islamic Conference (OIC), the South Asian Association for Regional Cooperation (SAARC) and Economic Cooperation Organization (ECO). Two-thirds of the Afghan population lives on less than $2 a day. Some of the major challenges to the country’s economy include the growing opium trade and poppy cultivation. Job creation, budget sustainability, government capacity, rebuilding the war torn infrastructure and corruption are some of the other long-term challenges.

Afghanistan Economic Structure: Primary Sector

Afghanistan’s primary sector plays a major role in the country’s economy, as 80% of the labor force works in this sector. About 31% of the country’s GDP comes from agriculture. Some of the major crops cultivated in Afghanistan are opium, wheat, fruits and nuts, while wool, mutton, sheepskins and lambskins also form a major part of the produce. However, spring rains and erratic winter snows used for water influence the agriculture sector in the country. Use of chemical fertilizers or pesticides and machines is minimal. Afghanistan has, however, experienced tremendous growth in agriculture after the fall of the Taliban regime in 2001.

 

Afghanistan Economic Structure: Secondary Sector

Afghanistan’s industrial sector survives on the small-scale production of textiles, woven carpets and fertilizer. Around 10% of the country’s population is engaged in this sector. The industrial sector contributes 26% of the revenues for the GDP of the country. The value-added processing of minerals and agricultural products is heavily relied upon by a considerable portion of the Afghan population. Some other products that substantially contribute to the manufacturing sector of the country are dried fruits, timber, leather, natural gas, coal, copper, cement, semi-precious minerals, soap, furniture, shoes, granite and marble. Afghanistan is keen on setting up a low-cost, labor-intensive manufacturing sector, as has been done in India and China, to decrease the level of unemployment.

 

Afghanistan Economic Structure: Tertiary Sector

The contribution of the services sector of Afghanistan to its Gross Domestic Product is 43%. The revenues primarily come from the transport, retail and telecommunications sectors. As of 2004, approximately 10% of the Afghan population earned its livelihood from the services sector of the country. Banking services are offered by Afghanistan International Bank, Standard Chartered Bank, Kabul Bank, Azizi Bank and First Micro Finance Bank. The services sector is expected to soon deliver US$6 million per year owing to the expanding operations of the United Nations Industrial Development Organization (UNIDO).

 

 

 


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