1. Analyze the environment in Afghanistan (economic, physical infrastructure, security, technological), identifying positive and negative aspects.
The liberation of capital in the country has been successful. Resource and infrastructure development projects on multi-billion dollar scales are rapidly proceeding as both state and private investor begin to invest heavily in large-scale industrial development in Afghanistan
Afghanistan is growing but it still has a lot of issues. Unskilled labor force, deep-rooted corruption, destructed infrastructures, drug trafficking, political instability, lack of transparency and accountability at all levels and several other ...view middle of the document...
2. Discuss the overall approach being used by the Task Force for Business & Stability Operations under the leadership of U.S. Deputy Under Secretary for Defense Paul Brinkley to promote Afghanistan to foreign investors.
The Task Force is trying to attract investments to Afghanistan and to help develop the country. They propose to open shop in the country. To manage this, they take possible investors to the place and show them the real situation
The group is formed from his own business network, other parts of the government, political campaigns, and nongovernmental organizations. Brinkley goes to the major cities in the country (San Francisco, Los Angeles, New York…). They pitch their idea in a way that makes investors take the risk. “If there is money to be made on a risk-adjusted basis that makes American CEOs comfortable, they’re going to do it”.
One of the steps to help develop the country is to create a modern banking system. They are persuading the government to pay its soldiers and police officers through electronic funds transfers. By the end of last year all the military and 80 percent of the police were paid in that basis. The next step was persuading them to actually leave their money in a bank. Getting data is crucial for the next stage-bringing in a global financial-services company that would connect Afghanistan’s monetary system to the rest of the world.
The first bank in Afghanistan was Citigroup. The company made a deal with Afghanistan International Bank, and now the two are helping process payments made by NATO forces to local contractors. As Kevin Fitzgerald says, “by paying invoices in local currency, it ensures the money stays in the country to stimulate the economy”.
To fight the corruption in the country, the Task Force is sending accountants to control the corruption in the government. Corruption is one of the biggest obstacle, alongside security concerns and lack of infrastructure, for companies considering expansion in the country. The task force tries to fight this by embedding accountants and legal advisers within government ministries.
3. Discuss the social and political environment in Afghanistan, including the influence of corruption on business activities.
Business opportunities are expanding on many fronts. They are fostering a business-friendly environment for both foreign and domestic investment. Afghanistan’s new investment law allows 100 percent foreign ownership and provides generous tax allowances to foreign investors. As AISA proclaims: “Afghanistan today is the land of countless business opportunities”.
They are privatizing their geological resources. This began in 2006 with the auction of a number of state owned mines already in production. The biggest sale is the Aynak site, thought to be the largest copper deposit in the world. The winner of this auction was a Chinese enterprise.
Having said that, corruption is one of the...