The global economic slowdown has severely undermined business even in the world's wealthiest countries. Imagine, then, the challenges Afghans face as they rebuild their country's economy. Decades of conflict have devastated the country's infrastructure, limiting access to the electricity, transportation, and markets that a thriving economy demands.
People on the ground don't see progress or change because of the inherent corruption.
But how do Afghans feel about economic conditions in their country? To find out, we asked Rajesh Srinivasan, Ph.D., and Nicole Naurath, regional directors for Gallup's World Poll, for their insights. They lead Gallup's research on Afghanistan, giving them a unique vantage point on what Afghans are thinking about economic conditions, corruption, entrepreneurship, and their future.
GMJ: Do Afghans feel that their country's economic conditions have been getting worse or better?
Nicole Naurath: Well, the good news is that increasingly, people are saying economic conditions have been staying the same -- though this is a volunteered response, meaning the interviewer does not offer it aloud and the respondent must say it on his or her own for it to be recorded as such. In December 2008, 33% said things were getting better, 34% said they were getting worse, and 28% said they were the same. By June 2009, 41% said economic conditions were getting better, 24% said getting worse, and 27% said things were the same. Then in April 2010, 39% said conditions were getting better, 13% said they were getting worse, and 42% said things were the same. Relatively, that's not so bad.
GMJ: One issue that gets attention from the media is the problem of corruption. How does it affect the lives of ordinary Afghans? How does it affect how business is done?
Naurath: One of our local partners told me a story: Let's say you build a road in your village, and then you go build another one over in a different village. First, not all of the money that was intended for the first road ever arrived, so the road is only half as long as it should have been. Then, not all the supplies came because cash was siphoned off the top. So the road has potholes in it before you're even done building it. Then you go over to the other village, and by the time you get back, the paved road has fallen into disrepair and is back to being a dirt road. In the end, the people on the ground don't see progress or change because of the inherent corruption.
Rajesh Srinivasan, Ph.D.: I don't think corruption is going away any time soon; it exists at every level. Afghans will unabashedly tell you that themselves. Over the past three years, perceptions toward corruption have hardly changed. More than 75% say it is widespread in government, and nearly as many have said this about the country's businesses. Interestingly, perceptions of widespread corruption in business dipped for the first time to 51% in 2010. As another example, in 2010, more than 4 in 10 (43%) in Afghanistan said they were faced with a situation that required a bribe, regardless of whether they actually gave one. When it comes to corruption in the government, sometimes it is about money. But it's also a matter of power -- "I'm not making money, but I have some power, so I'm going to wield it."
It is important to note that these results reflect a broader trend in the sub-region. Countries that are at levels similar to where Afghanistan is on economic development don't see fighting corruption as a high priority when they have to deal with security, poverty, lack of jobs, and a crumbling infrastructure.
GMJ: What needs to happen in Afghanistan to promote economic growth?
Dr. Srinivasan: What's required first of all is ensuring security, because without security, you aren't likely to see any economic growth. Nobody wants to invest, nobody wants to start a business, nobody wants to create opportunities if they are unsure of how long the current state of security or the resulting stability will last.
At one point, Afghanistan was a really flourishing country. They were exporting fruits and nuts, not just drugs.
Yet conditions for economic growth aren't as bad as they could be. When we've asked, "How would you rate economic conditions in this country today -- as excellent, good, only fair, or poor?" Afghans have not been entirely pessimistic. Most people rated the economy as poor or only fair, but roughly a quarter of Afghans over the years have rated it as good. To maintain or improve that attitude, clearly, security is important.
And keep in mind, Afghans have pride. They have an ego. They do want to be more self-reliant. At one point, Afghanistan was a really flourishing country; they had fantastic agriculture and were exporting fruits and nuts, not just drugs. They knew what they wanted; they lived within their tribal codes; they knew what they needed to do to coexist and survive.
GMJ: How do Afghans feel about their future?
Naurath: It's too hard to say. When Gallup asks Afghans to predict how their lives will be in five years, we get really high "don't know" responses. I've watched hundreds of pilot interviews throughout Asia. When respondents say they don't know, it's not because they don't understand the question; it's because they cannot answer it. They just can't picture the future in five years. And in a country that is as unstable as Afghanistan, I can see why many people would have no way of predicting what their life will look like in five years.
GMJ: If the people there can't speculate a few years in advance, should foreign business investors?
Dr. Srinivasan: From an investment perspective, supposedly Afghanistan is sitting on a huge amount of gas reserves and mineral deposits. If somehow Iran, Pakistan, and Afghanistan worked together to exploit those gas reserves and mineral deposits for the benefit of that entire region, it could be great for stability and growth.
GMJ: Are Afghans willing to invest in their own country? What about their sense of entrepreneurship?
Dr. Srinivasan: Although a majority of Afghans (72%) believe that one can get ahead by working hard, when they see little to no job opportunities, high levels of corruption, declining standards of living, little to no confidence in the government, it is hard to imagine them wanting to invest in their own country. Not surprisingly, one in five (21%) say they want to permanently move out of the country.
Of those who currently don't own a business, about 9% say they have ever thought about starting a business, and about 5% say they plan to start a business in the next 12 months. Over one-third of those intending to start a business in the next 12 months are driven by lack of jobs and desperate personal situations, so they're resorting to self-employment. They're not necessarily seeking opportunity or investing in their own country. In fact, this situation, along with high corruption, has the potential to create more of the unproductive kind of entrepreneurship that capitalizes on weak governance.
GMJ: Other than obvious security issues, what are the biggest challenges for Afghans in starting a business in Afghanistan?
Dr. Srinivasan: We have found from other research that having access to a family member or friend one can trust is an extremely critical measure when one is planning to start a business. Our data from Afghanistan indicate that just over one-third (37%) feel that they trust someone enough to make them a business partner. Other critical challenges to starting a business include perceptions of poor access to credit, paperwork and bureaucracy, and confidence that their assets/property would be safe, not to mention safe access to markets.
-- Interviewed by Jennifer Robison