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HowjoiningtheWTOcouldimpactAfghanistan|Asia|DW.COM|12.11.2015

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TOPSTORIES/WORLD/ASIA

AFGH AN ISTAN

HowjoiningtheWTOcouldimpactAfghanistan
Afternearly11yearsofnegotiations,AfghanistanandtheWorldTradeOrganization(WTO)havefinallyagreedonthe
country'stermsofaccessiontotheglobaltradebody.Butwillthishelprevivetheflailingeconomy?

"Ourcountry'saccessiontotheWTOwillserveasacatalystfordomesticreformsandtransformationtoaneffectiveandfunctioning
marketeconomythatattractsinvestment,createsjobsandimprovesthewelfareofthepeopleofAfghanistan,"saidAfghanPresident
AshrafGhanifollowingtheagreementreachedbetweenhisgovernmentandthetradebody's161membersonNovember11.
Tradeministersaresettoformallyapprovethetermsofthecountry'smembershiptotheglobaltradeclubinameetinginNairobion
December1518.Afghanistanwillbecomeamember30daysafteritratifiesthedeal,whichitwillneedtodobyJune30,2016.
TheWTOissettoexpandfrom161to164members,withKazakhstansettobecomethe162ndonNovember30,andLiberiahaving
recentlyagreeditsmembershipterms.Afghanistanwillbecometheninthleastdevelopedcountrytojointheorganizationsince1995.
"JoiningtheWTOwillhelpAfghanistantobecomepartoftheglobalrulesbasedsystemforinternationaltrade,whichwillhelptoimprove
marketaccessforAfghanexportsandhelptoprotectAfghanistanfromunfairtradepracticesbyothercountriesthatarepartofthe
WTO,"saidRajivBiswas,AsiaPacificChiefEconomistatglobalanalyticsfirmIHS.

Slugglishgrowth
ButwhiletheWTOmembershipisexpectedtoconferbenefitssuchasgrantingaccesstonewmarketsandglobalsupplychains,itis
unclearhowmuchAfghanistanwouldbeabletobenefitfromthenewopportunities.
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BiswassaysAfghanistansexportstructureisdominatedbyagriculturalproducts
andsometypesoflightmanufacturingsuchastextilesandcarpets,whichmaygain
somebenefitsfromlowertariffsandothernontariffbarriersaspartoftheWTO
system.
"AfghanistanhasalreadybeenliberalizingitsowntariffbarriersaspartofitsWTO
accessionprocess,whichhasincreasedimportcompetitioninsomesegmentsof
industrybutallowsconsumerstobenefitfromlowerprices,"theeconomisttoldDW.
Afghanistan'seconomicgrowthslumpedtoabout2percent

Afterachievingremarkablegrowthoverthepastdecade,theAfghaneconomyhas

lastyear

flounderedinthepasttwoyearsasinternationalinvestorsandaidorganizations
havedrasticallyscaledbackoperationsfollowingthewithdrawalofmost

internationaltroops.Forinstance,GDPgrowthshrunktoabout2percentlastyearafterexpandingata9percentratejusttwoyearsprior.
Reflectingreducedinvestorconfidenceintheeconomy,foreigndirectinvestmentdroppedby30percentinthefirsthalfofthisyear,
accordingtotheAfghanistanInvestmentSupportAgency.
AbusinesssurveyreleasedinAugustbytheAfghanistanChamberofCommerceandIndustryshowedthatbusinessconditionsdeteriorated
substantiallyfromJanuarytoJune2015.
Theeconomicshrinkagehasbeenaccompaniedbyspikesinunemploymentandcapitalflight.Italsodentedthegovernment'salready
weaktaxrevenues,leadingtoafiscalcrisis.

Politicalinfightingandinsecurity
Theeconomichardshipisinlargepartduetothecontinuedpoliticaldeadlockandworseningsecuritysituationintheconflictridden
country.
D WR EC OM M EN D S

TheAfghanNationalUnityGovernment(NUG),apowersharingarrangementbetweenPresident
GhaniandChiefExecutiveOfficerAbdullahAbdullahfollowinglastyear'scontentiouspresidential

WhyCentralAsiais
increasinglyworriedabout
Afghanistan

election,isaccusedofbeingdeeplydividedandineffective,usheringinaformofgovernanceparalysis.

Asforeignmilitantsjointhe
Taliban'sfightagainstgovernment
forcesinAfghanistan,Central
Asiancountriesaremoreandmore
worriedaboutthedangerof
Islamicfightersinfiltratingthe
region.DWexamines.(04.11.2015)

countryisconfrontinganincreasinglyresilientinsurgencyhasunderminedtheAfghans'confidencein

WhyAfghanistan'sprivate
sectorisstruggling

Manysaytheadministrationisinalimbo,owingtodivisionsbetweenGhaniandAbdullahaswellas
withintheirrespectivecamps.Thisinternalbickeringwithinthegovernmentatatimewhenthe
theireconomy.
TheprecariousstateofsecurityinAfghanistanrecentlybecameevidentwhentheTalibanbriefly
overranthestrategicallyimportantnortherncityofKunduz.
ExpertsthereforebelievethatitisessentialforKabultofocusonimprovingthesecuritysituationin
ordertoallowthecountrytobenefitfromtheincreasedtradingopportunitiesprovidedbyjoiningthe
WTO,sayexperts.
"EvenifWTOmembershipopensupnewmarketsandsupplychainsforAfghanistan,fewwillwantto

WhymanyAfghans
distrusttheirjudicial
system
Afghanistan'selitefleeing
toEurope

engageitoneconomiclevelsifthecountryistoounstabletosustainsuchtransactions.Thebiggest
issuethereforeissecurity,"saidMichaelKugelman,SouthAsiaexpertattheWashingtonbased
WoodrowWilsonCenter.
Andthenthegovernmentalsohastotackleissuessuchaspervasivecorruption,bureaucraticredtape
andwidespreadinefficienciesthatdissuadeforeigninvestors,theanalysttoldDW.

'Cartbeforethehorse'
AlexeyYusupov,directoroftheAfghanistanofficeoftheGermanfoundationFriedrichEbertStiftung
(FES),believesinclusioninregionalandglobaleconomicandtradebodiessuchastheWTOisavalue
initselfforanisolatedcountrylikeAfghanistan.

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However,YusupovsharesKugelman'sskepticismabouttheconcretebenefitsAfghanistanmightdrawfromitsWTOmembership,aslong
asitremainsoneoftheleastsecurenationsintheworld.
"IcannotseehowtheaccessiontotheWTOwillhelpAfghanistanattractmoreinvestments.Theinhibitingfactorsaremostlysecurity
centered,sothealleviationoftariffsandnontariffbarrierswillnotbeagamechanger,"theanalystsaid,addingthatsubstantive
investmentprojectsliketheAynakandHajigakminingconcessionsarenotmaterializinganytimesoonbecauseofsecurityimpediments.
Nevertheless,otherssaythebiggestimpactofaWTOmembershipwillbeonincentive
structures."IfAfghanistanenterstheWTO,itwillbeexpectedtodocertainthingsand
fulfillcertainconditionstoensurethatitservesasamemberingoodstead,"said
Kugelman.
"WhatthismeansisthatinordertomaintainitsgoodstandingintheWTO,
Afghanistan'sgovernmentwouldhaveastrongincentivetoengageinliberalization
reformsandcrackdownmorerobustlyoncorruption,"theanalystexplained.
"Insomeways,onecouldarguethatAfghanistan'sWTOaccessionisacaseofputting

Theprecarioussecuritysituationisoneofthemain

thecartbeforethehorse:tryingtohaveAfghanistanjoinaprestigiouseconomicclub

impedimentstoeconomicgrowthinthecountry

whileitseconomyisstillstrugglingtoenjoyanysemblanceofsustainedgrowth."

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