Small Businesses in Afghanistan

This piece first aired in December, 2008, as part of the show, “Planting Seeds.”

Listen here.

    HOST: If you were asked to name a few of Afghanistan’s exports, beauty products probably wouldn’t top the list. But for some small business owners in Afghanistan, exporting soap and perfume is one way to help traditional crops, like pomegranates and almonds, compete with poppies. Emily Hager has more about those businesses, and what the challenges they’re facing can tell us about the prospects for Afghanistan’s economy.

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    EMILY HAGER: Gulestan Ariana is a small company in Jalalabad that presses the roses and oranges of Nangarhar province into oil. They sell that oil to perfume companies in Germany. Four years ago, Shafiquallah Azizi was one of their first employees. He operated the distilling press: the heart of the whole operation. Now, he owns a 25% share in the company – and he’s giving everything he has to the project.

    SHAFIQUALLAH AZIZI: I am working empty pockets right now – that’s a big challenge for my family and for myself. Because I can find a job somewhere else. It’s because of my country, I can help my country. The future of this is good.

    EMILY HAGER: Azizi’s company is small: at this time of year, there are only 4 full time employees. But he’s set his sights high. He wants to take advantage of traditional Afghan crops: pomegranates, grapes, bitter oranges, and nuts, and tap into the Western luxury market. Ultimately, he hopes that his business and others like it will not only boost Afghanistan’s failed economy but solve a second problem: illegal poppy cultivation.

    Other people have had the same idea: like Sarah Chayes, a former reporter for National Public Radio who founded the Arghand Soap Cooperative in Kandahar in 2005. Arghand contracts with local farmers to buy almonds, pomegranates, and other ingredients – then mixes it all into soaps. One bar of soap sells for six or seven dollars in gift stores in the US and Canada. Vino Pashtoon Atif is an Afghan NGO worker from Kandahar. He was there at the beginning of the project.

    PASHTOON ATIF: Sarah Chayes, she said as long as the economy is based on agriculture, and if you don’t have international market, Afghanistan will not get rid of poppies, which is a big problem right now in Afghanistan. But you can’t force those farmers: they don’t have anything else to feed their families with. So she said, there should be an alternative to these poppies, and that could be the products that we grow.

    EMILY HAGER: Nasrat Wassimi is a research assistant at the office of Arid Land Studies at the University of Arizona. He’s spent time in Afghanistan, studying ways to use agriculture to fix the Afghan economy.

    NASRAT WASSIMI: These are small industries that are good, that can create jobs for farms, and also for women, and small populations. Can you turn the whole country into roses? No! You don’t have the infrastructure for that.Security in the country is not there. Water, which has not been available. Energy is not there.

    EMILY HAGER: Despite these problems, Gulestan and Arghand have had some success. One key to that success, they say, is adding value to the fruit and crops of Afghanistan by making them into soap or oil and then exporting them. The average Afghan farmer has only one hectare of land – about two and half acres. Growing wheat, that would be just enough to feed a family. With poppies, that land can yield three times as much value. Mari Oye, a sophomore at Yale who worked with the Arghand Cooperative throughout high school, says that to be competitive, Arghand took some tips from the opium economy.

    MARI OYE: One thing that the war lords do is they’ll pay for their opium crop ahead of time. And its often the only way that you can get credit, more or less, as a farmer. So if you need to marry one of your daughters, or you need to pay for someone who has an illness, if you go to an opium farmer, they’ll pay you up front at the beginning of the season, before the crop comes in.

    EMILY HAGER: Sarah Chayes, the American reporter who founded Arghand, goes directly to farmers to ask them to become suppliers for her soap. Shafiquallah Azizi, of the oil company, also approaches farmers personally. He is trying to find more farmers to grow roses for his rose oil distillery in Jalalabad. Azizi was surprised by the reaction he got from the first poppy farmers he spoke to.

    SHAFIQUALLAH AZIZI: I was a little bit scared because its difficult to be inside a lot of people and they’re doing poppy work, and then you can be like, “ok, can you guys just remove this and put roses?” I was a little bit scared, but then I was like, man, I don’t need to be scared, I just start talking and tell them like, ok, I have a very good solution for you guys. I will give you cuttings for one or two years and help you with the money also; and they said, “no problem!” and so we can finish this, if we can find some help from somewhere.

    EMILY HAGER: The initial investment required to make the switch is a problem, though. And not only for Azizi and his rose distillery. Other programs in Afghanistan are focused on switching opium poppies for Afghan pomegranates, which are highly valued in India and Pakistan. But for the first two or three years after a farmer plants pomegranates or roses on their land, they can expect little to no return, as the plants grow to fruit bearing size. So farmers need a lot of help as they get started. For a small business owner like Shafiquallah Azizi, that investment money isn’t easy to find. In the meantime, his company is doing the best it can with the crops they already have.

    Arghand has also had to halt any expansion. Right now, they employ a total of 13 people full time. They say they aren’t anywhere close to meeting the demand for their soap – but Pashtoon Atif, who works with Arghand, says that growing Taliban activity and insecurity are getting in the way of contacting more farmers.

    PASHTOON ATIF: In 2006, we contracted 15 individual farmers who had very good land in Panjawi district, we told them that we are going to grow roses in their land. And they agreed, they signed a contract that they were not going to grow poppies anymore in that land. But unfortunately, after 6 months, that land was in Taliban control, and so we could not do anything.

    EMILY HAGER: Meanwhile, Arghand is dealing with other challenges. Even in Kandahar city, Mari Oye says there is no reliable infrastructure.

    MARI OYE: There isn’t even any electricity in Kandahar – this is now 7 years or so after the invasion. The seed oil press, for example, requires electricity and people have to wake up in the middle of the night to run it between 2 and 4 in the morning when the electricity in Kandahar came on. If you’re going to have any kind of sustainable local economy, you need more reliable electricity than that.

    EMILY HAGER: But perhaps the biggest challenge facing any business in Afghanistan is transport. The country is landlocked, and most exports must either be flown out or driven out through Pakistan. Small businesses like Arghand and Gulestan have found creative ways to get around the issue. In Kandahar, Arghand ships their soap out through the Canadian military airport. Gulestan takes advantage of another NGO to ship their distilled oil to Germany.

    But even moving products within Afghanistan is a challenge. One of the biggest reconstruction projects in Afghanistan since 2001 was resurfacing the ring road, which links most of Afghanistan’s major cities. The project turned the two day trip from Kabul to Kandahar into a six hour drive. But now, armed groups station themselves along the road. Nasrat Wassimi explains the problem.

    NASRAT WASSIMI: Nobody can travel on it because of the lack of security. From Kabul to Kandahar, from Kandahar to Herat, you cannot travel.

    EMILY HAGER: Neither Arghand nor Gulestan would exist without the initiative, hard work and strong personalities of their founders. That is part of what makes these projects successful – and it’s why it could be hard to duplicate their success elsewhere in the country.

    For now, buyers are snapping up Arghand’s soap in the US, Gulestan’s oil in Germany, and famed Afghan pomegranates in India. These projects are small – but their successes and failures can give us a glimpse of the battles facing projects on any scale as they confront Afghanistan’s insecurity, poppy farming, and economic difficulties.

    For War News Radio, I’m Emily Hager.

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