Guidance

Harakat: creating a better environment for business in Afghanistan

Harakat is a grant facility that aims to create a better environment for business in Afghanistan.

In December 2007, we announced our intention to set up a facility to improve the environment for business in Afghanistan.

Harakat, which means ‘movement’ in Dari, was launched in June 2008 (formerly known as the Afghanistan Investment Climate Facility) with £30 million from the Department for International Development (DFID) to tackle the main constraints to doing business in Afghanistan.

In a country where unemployment is estimated to be as high as 40%, improving the business environment is vital for creating jobs and tackling poverty.

Harakat is the first venture of its kind in Afghanistan. The facility is staffed almost entirely by Afghans who understand the local context.

Impact

The facility provides grant funds to implementing partners from the government, private sector and civil society. A board comprised of prominent members of the Afghan private sector selects projects that will have a swift and measurable impact on the business environment.

The facility has approved a number of high-profile projects.

Afghanistan Commercial Land Agency

Access to land with secure title has been identified as a major challenge for the private sector. In partnership with the Ministry of Agriculture, Irrigation and Livestock, the Harakat project will identify government land that could be leased to the private sector and create a “Land Lease One-Stop-Window” to facilitate this process

Afghanistan secured lending project

The objective of this project is to improve access to finance by facilitating the use of movable assets as collateral. This will be achieved by a 3-pronged approach of regulatory reform, capacity building and the creation of an electronic collateral registry. The project will be implemented by DAB (the Central Bank) with the assistance of IFC advisory services.

Information and awareness programme on commercial laws

Working with the Afghanistan Chamber of Commerce and industry, this project will increase awareness and engagement among Afghan business people regarding commercial laws. A series of workshops will be held over 4 months in 7 provinces, at which commercial laws will be explained and debated.

24-hour call centre for exporters

In collaboration with the Export Promotion Agency, the programme will establish a 24-hour call centre administering a well advertised hotline that will record incidences of corruption and insecurity on main transit routes throughout Afghanistan. The information will allow effective advocacy by the private sector and help other government departments to tackle these barriers to increased trade with neighbouring countries.

Quality standards for Afghan goods

The project will support the National Standards Agency to develop procedures for national standards and support the capacity building of technical committees and the development of up to 30 mandatory national standards. The aim of the project is to get higher prices for Afghan products in the pharmaceutical and cosmetics, food and beverages, and carpet weaving sectors. The project will also support the private sector to meet these standards.

Further information

During the 1st year of operation the Harakat team has built strong relations with the public and private sectors, and several other donors have expressed an interest in investing in the facility.

For further information visit Harakat’s website or contact Mathew Short or Noor Hakimyar.