Trade Through West Afghan Province on the Up

Exports from the western Afghan province of Herat have leapt by over a third as a result of a relaxation of customs rules, better international trade links and improved security, businessmen said.

Herat lies on ancient trade routes linking the Middle East with Central and South Asia, and borders on Turkmenistan as well as being Afghanistan’s major gateway to Iran.

The province produces saffron, rugs, cumin, marble, animal skins and wool, and should be prospering. But as in much of Afghanistan, businessmen frequently complain that free trade is hampered by continued conflict, endemic corruption, poor government policies, and a lack of markets abroad.

That situation is now improving, according to businessmen and officials, who credit a reduction in red tape and a supportive provincial chamber of commerce.

Officially-recorded exports from Herat province amounted to more than 30 million US dollars between March and September 2011, a 36 per cent increase on the figure reported for the same period of 2010, according to Amrullah Qalandarzoi, head of exports at the provincial customs department.

Some of the goods were bound for neighbouring Iran and Turkmenistan, while others were heading for the Middle East, India, Turkey and Europe.

Mohammad Rasul Fayeq, head of the rug makers’ association in Herat, said the carpet industry, which employs some 3,000 workers, most of them female, in western Afghanistan, had benefited significantly. Nearly 60 per cent more rugs were exported to Iran and on to Europe between March and September 2011 than in the same period of 2010.

The boom has prompted Herat’s biggest carpet trader, Abdol Zaher, to raise the wages he pays his workers from 60 to 300 dollars a month.

“I export about 30,000 square metres of carpets to Italy every year,” he said. “A lot of people put food on the table because of this Afghan industry.”

One of his employees is Nuria, 36, who became the breadwinner in her family when she lost her husband six years ago.

Before the pay rise, she could barely pay the rent and her two sons had to work to support the family, one in a bakery and the other selling plastic bags.

With the pay increase, Nuria hopes to send both sons to school.

Gholam Sediq Nuri, who sells rugs, cumin and saffron to the Middle East via Iran, said the chamber of commerce in Herat had been a great help. In the past, he had difficulty getting visas for Iran and other countries, often having to make a large down-payment.

“When the chamber of commerce introduced me to the embassies, however, I was able to get visas very easily,” he said. “Our trade has grown because Arab and European countries have opened their doors to Afghan traders, because we are producing more, and because – relatively speaking – security is fine.”

Khalil Ahmad Yarmand, the chamber’s executive manager, said it had helped exporters to market their goods and held trade fairs to attract foreign buyers.

“If things continue like this, Herat’s exports and people’s incomes will increase massively,” Yarmand said.

Although the security situation remains volatile in Herat, officials estimate than one third of the insurgents in the province have been “reintegrated” to civilian life over the last year, according to The Wall Street Journal.

Economic analyst Mohammad Jawad Panahi predicted that a continued rise in production and employment would in turn improve the security environment and cut drug smuggling.

Panahi attributes these improvements to greater efficiency at the customs office, and says the finance ministry has also negotiated with Afghanistan’s neighbours to allow freer border trade.

Mohammad Qasem, a farmer from Gozara district, 20 kilometres south of Herat city, has expanded his business as export opportunities have increased.

He grew cumin for many years, but earned little from it because he could only sell to Iranian and Pakistani buyers at low prices. Now he can trade with countries further afield, and he has bought two tractors with the profits and gone into business with his two brothers, who have returned from Iran where they were working.

“In the past, we grew tired of working because no one would buy our products and we couldn’t cover our costs,” he said. “Our fields are worth working now.”

Despite the improvements, no one is under any illusion about the many obstacles to trade that still exist.

Fayeq pointed out that while increasing amounts of carpets are exported to Iran through legitimate routes, 95 per cent are still smuggled illegally into Pakistan.

Gholam Mohammad, a saffron trader in Gozara, said that although trade conditions were better than ever before, security and “massive corruption” remained major problems.

Officials continued to demand a percentage from legitimate businesses, he said, adding, “If you want to launch an import-export company, you need to bear in mind that you aren’t the only shareholder. Government officials are your shareholders as well.”

Mohammad Ali Jawed and Harun Hakimi are IWPR-trained reporters in Herat province.

Harun Hakimi is an IWPR-trained reporter in Herat province, Afghanistan.