Poverty reduction in Afghanistan micro enterprise to improve rural livelihood in Afghanistan

Consideration the importance of the carpet industry in the Afghanistan’s economy, there are many opportunities that require state intervention. In order to develop the deteriorating economy the government must take some key practical steps to support the development of its micro enterprises through provision of incentives, credit support and market linkage. Source the required machinery to proceed with washing and cutting of the final products as well as create a certified brand. The government also needs to improve more on its policy enforcement methods. This can be practical when the social norms and practices of the people are considered and valued appropriately, so that it motivates carpet weavers to return home. Employing more women in the government who can access female carpet weavers is crucial to voice the unprecedented challenges women weavers’ face.

Keywords: Afghanistan, economy, women, industry, marketing, management, micro enterprise.

A majority of “80 %” Afghan rural populations survive with income from farming activities. However, imbalanced access to land and dominant poverty has made living condition even harsh to the rural mass. As this situation have been prevailing and intensified since the last three decades of internal unrest, micro enterprise seems to be the main source to generate income overcome daily livelihood within rural areas in Afghanistan. After the Taliban regime collapsed in early 2002, the new government gained considerable support from the international community to help better the living condition of the people. One of the areas prioritized for the international assistance is development of rural community though building the capacity of their existing micro enterprises. The core was to creating job opportunities for rural people. While there are various micro enterprises, in the following paragraphs I will explore the very features of carpet weaving as a dominant micro enterprise in Afghanistan, its capacity to counter’s poverty from the society, effects of civil war, strengthens and weaknesses and the role it played in employing the rural women (housewives’) in the Afghan Society.

Characteristics of the Afghan micro enterprises

Micro enterprise in Afghanistan context can be characterized under two main categories first , indoor activates: carried out largely by women that includes hand crafts and some livestock activates. Indoor microenterprise comprises of carpet weaving and various types of handmade needle work, tailoring, beauty paler, pealing almond, pistachio and walnut, drying fruits, running backyard poultry farm, in house small dairy production and so on. For most women such activities generates income to supplement subsistence and for saving purpose to respond family emergencies. However, burden of heavy routine housework like cooking, washing, and child caring is not counted and are non-monetized as a

whole. S econd , outdoors activates by men, are small agriculture and non agriculture activities as well as some vocational employment. This include farming, sharecropping, livestock raising, selling out homemade carpet products, running small glossary store, repairing shoe, vegetable selling and some other small businesses. Making business on homemade carpet is the most valuable one that men do in rural markets sometimes even in the large cities men walk on the street carrying a carpet that is regarded as a homemade product. Both indoor and outdoor micro enterprises are informal, uncoordinated and self financed. Rural markets in Afghanistan are flooded with such entrepreneurs. In Afghan society husbands are regarded, as formal head of family, so decision making is a given authority in all matters related to outdoor business for men only. This deep routed tradition polished and decorated with Islamic culture, prevents rural women from appearing in the local market as a seller, and so covers the underlying fact behind hidden identity of women as the actual creators of the “Afghan Carpets”.

Literature review

Considering the significance of the carpet industry in the Afghan economy, it becomes understandable that migration of carpet weavers’ is in fact a shift of the major portion of the carpet industry from Afghanistan to refugee camps in Pakistan. One of the reasons for this paradigm shift is state incapability to provide credit and market opportunity and protection to the micro entrepreneurs’ involved in the industry. In 2013, carpet sales stood for “11 %” of the Afghanistan’s external trade. This means that, unprecedented carpet industry embraces the potential capacity to be attributed crucial in poverty reduction in Afghanistan. International Labor Organization (ILO) marks Afghanistan with a persistent “15 %” ratio of unemployment rate between 2009 and 2013. ⁸ An increase in number of household involved in carpet production can create jobs for many other micro entrepreneurs’ who used to contribute in the carpet industry by producing materials like looms, coloring, cutting, washing and providing tools and equipment and so on. Micro enterprise development is instrumental because decades long civil unrest has caused massive destruction of economic infrastructure. Reconstruction of economic infrastructure, requires, time, resources and the technical capacity that the Afghan Government does not possess at its current status.

Shortage of Afghanistan poverty reduction strategy

Afghanistan government is committed to implement several strategies deemed necessary to reduce poverty, one of which binds it to prioritize “strengthening legal frameworks” for the financial institutions in order to “increase offerings” for the Small and Medium Enterprises based in the rural areas. ⁹ Such strategies still remain largely on paper and within policy discussions. This situation encourages the tendency among carpet weavers to choose Pakistan as a path where they see access to essential resources to maintain their micro enterprise, which are limited or scarce in Afghanistan.

Diversification of carpet industry as a dominant rural micro enterprise undoubtedly can contribute to deal with the problem of rural unemployment and overall poverty. The opportunities to diversify the carpet production are possible through: First, the state intervention in the industry is crucial to support local producers empirically though providing subsidies, credit and market facilitation. From the Afghan government perspective, this would mean exercising the merits of its poverty reduction strategy in rural areas. This will in turn attract repatriation of migrant entrepreneurs’ from Pakistan to protect their brand and business identity, and will be would be a motivation for repatriation to their home country. Second, Afghanistan is receiving International Aid, establishing viable mechanisms to utilize the aid in promoting the carpet industry perhaps is a step Afghanistan Poverty Reduction Strategy Paper, (2008, pg. 10)

away from poverty. This can be pragmatic through establishing cooperatives to coordinate production within the national market, create identity for carpet producers, establish direct linkages with the foreign customers’, institutionalize the industry to increase order-based production. This will help to have a well-organized carpet production industry as a formal business that will subsequently elevate rural people from poverty. In addition, it will also empower and encourage those rural (women) carpet producers’ to advance their skills and knowledge and become more active in the society. Moreover, it will unfold clear understanding of the economic and development contribution of carpet industry in the country’s economy.

Weakness of the Afghan carpet industry

Carpet production in Afghanistan is a tradition it is similar to a honeybee farm, meaning that more carpet weaving families leads to more production. A large number of carpet producers’ which include rural households, migrated to Pakistan due to over 3-decade civil unrest. ¹⁰ This created a given economic incentives for neighboring Pakistan at the expense of the Afghan economy.

Available data contend that Afghan carpets are labeled Made in Pakistan when exported to the international markets; however, Pakistan originally does not possess the industry or tradition to produce handmade carpets.

One of the problems mainly faced in the carpet industry is the lack of technology that is required to cut and wash carpets. This process is regarded as final part. Afghan carpets are sent to Pakistan where the machinery is available. From this point Afghan carpets labeled “made In Pakistan”.

Insurgency and its subsequent impact on the carpet industry

Insurgency is one of the core threats to peace and stability ahead of process faced by the Afghan Government. Poverty, unemployment, insecurity, poor health and education services, desperate welfare conditions of rural people are the main factors of the insurgency that is intensified in rural areas of Afghanistan. In such situation the indoor carpet industry is one of the significant micro enterprises, that generates means of survival for many rural population affected by poverty. There is no consistent study that can present accurate data about the proportion of the Afghan population especially women involved in carpet industry. However, some organizations claims that “Afghan carpet industry employs more than 1 million…and millions more work in related industries, such as wool production, cutting, washing and design.” The accuracy of the claims is highly debatable when considering the current situation in terms of possibilities to access such data.

Conclusion

To sum up the discussion, taking into consideration the importance of the carpet industry in the Afghanistan’s economy, there are many opportunities that require state intervention. In order to develop the deteriorating economy the government must take some key practical steps to support the development of its micro enterprises through provision of incentives, credit support and market linkage. Source the required machinery to proceed with washing and cutting of the final products as well as create a certified brand. The government also needs to improve more on its policy enforcement methods. This can be practical when the social norms and practices of the people are considered and valued appropriately, so that it motivates carpet weavers to return home. Employing more women in the government who can access female carpet weavers is crucial to voice the unprecedented challenges women weavers’ face. Similarly, there is need for he government to focus on a promotion minded approach to motivate carpet weavers so that their technical capacity is enhanced and more value is added into the Afghan Carpet.

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2. Hashim Qiam, trade: Carpets — Made in Afghanistan for Pakistan’s Profit, inter press service, news agency http://www.ipsnews.net/2009/08/trade-carpets-made-in afghanistan-for-pakistan39s-profit/ ,
3. Robert Sauers Afghan partnership opens modern carpet processing facility, IDP Note, Us Department of state weblog, (2011) http://blogs.state.gov/stories/2011/01/13/afghan partnership-opens-modern-carpet-processing-facility . The World Bank, Afghanistan Economic Update,
4. Keith, Psaila, constraints and opportunities for micro enterprises in Malta (2007, Pg. 31) 6. CIA Fact book, https://www.cia.gov/library/publications/the-world factbook/geos/af.html ,