International Journal of Economy, Management and Social Sciences, 2(6) June 2013, Pages: 468-476

TI Journals

International Journal of Economy, Management and Social Sciences

ISSN
2306-7276

www.tijournals.com

An Evaluation of Trade and Investment Potential in

Afghanistan for the Foreign Companies and a SWOT
Analysis on the Turkish Companies
Mohammed Asf Yoldash
Assoc. Prof., Jusup Balasagun Kyrgyz State University, Kyrgyzstan.
AR TIC LE INF O

AB STR AC T

Keywords:

Afghanistan is strategically situated in a key point in the centre of an area that has a population of
2.5 billions, which covers Pakistan, Iran, India and China in Asia. It is quite a rich country in terms
of its underground sources. A central administration has been establized in Afghanistan since the
regime of the country changed in 2001. The fact that a central administration has been established
and the security is provided to a great extent has enabled the country to become a potential market
and an investment area for the Turkish firms and the firms of the other countries. The fact that
Turkey and Afghanistan are close to each other in terms of their religion, culture and geography
offers important opportunities to the Turkish firms that have made investments and will make
investments and gives them an advantageous situation.

Afghanistan
Turkish Companies
Trade and Investment

The present study has been prepared based on the findings and literature review of a PhD thesis
written about the Turkish companies functioning in Afghanistan. Evaluations about the trade and
investment potential of Afghanistan in terms of Turkish companies have been made. Within this
framework, the strong and weak points of the Turkish companies in Afghanistan market and the
threats and the opportunities of the market are handled in the article.
2013 Int. j. econ. manag. soc. sci. All rights reserved for TI Journals.

1.

Introduction

According to the reports of the World Bank for the year of 1986, Afghanistan is shown as one of the richest countries in terms of
underground sources across the world. Since the historical Silk Road passes through the country, Afghanistan always draws the interest of
world. From this point of view, Afghanistan can be considered as a potential investment area by the foreign companies because it is an
intact market. Since Turkey and Afghanistan are similar especially in terms of religion, culture and geography, The Turkish companies
have a more advantageous position in the Afghan market compared to the companies of other foreign countries.
The relations between Turkey and Afghanistan dates back to the early years of Turkish Republic. Upon the foundation of Turkish Republic,
Afghanistan was the first country to recognize Turkey [1] and the relations between two countries have been maintained in a proper way
since that date. In that period, Afghanistan had a significant place in the foreign policy of Turkey. The visit paid by King Emanullah of
Afghanistan to Turkey in 1928 and his negotiations with Mustafa Kemal Atatrk strengthened the foundation of cooperation between two
countries. Therefore, the importance attached by Turkey to Afghanistan dates back to the historical relations. We can put forward that our
cooperation with Afghanistan in terms of economic, political and socio-cultural fields is boosting increasingly and this country occupies a
special place for the Turkish companies. It is highly important to evaluate the current status of the investments made by Turkey to
Afghanistan and to define the strategies accordingly.
The findings which were obtained by Yolda (2006) in his doctoral thesis on the Turkish companies carrying on activities in Afghanistan
have considerably been used in this study. In order to conduct this thesis study, the face-to-face interviews have been made with the
Turkish companies engaged in activities in Afghanistan and the current status on the trade and investment potentials of Afghanistan for the
Turkish companies has been put forward in the light of the information obtained by these interviews and literature review. Within this
framework, the strengths, weaknesses, opportunities and threats for the Turkish companies active in Afghanistan are addressed. The part of
conclusion and suggestions includes the evaluations for the Turkish and foreign companies which are already engaged in business or
willing to carry on business in Afghanistan.

2.

The Profilea and Socio-Cultural Structure of Afghanistan

With a population of around 30 million persons as of July 2005, Afghanistan has a surface area of 657.500km2. It is bordered by
Turkmenistan, Uzbekistan and Tajikistan in the north and China (East Turkistan), Kashmir and Pakistan in the east and Iran in the west.

* Corresponding author.
Email address: asifyoldas@gmail.com

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Internat ional Jour nal of Economy, Mana ge ment and Social Sciences , 2(6) June 2013

Table 1. Profile of Afghanistan

Official Name
Capital
Population
Surface area
Neighbours
Location
Population Growth Rate
Literacy Rate
Important Cities
Religion
Official language
Ethnic groups
Currency

Islamic Republic of Afghanistan

Kabul, Population: 2.500.000 (July 2005-estimated)
31.056.997 (CIA World Fact book as of 2006)
657.500km2
Pakistan, Iran, Turkmenistan, Uzbekistan, Tajikistan, China
Pakistan in the south and east, Iran in the west, Turkmenistan, Uzbekistan and Tajikistan in the north.
4%
36%
Kabul, Kandahar, Herat, Mazar- Serif (Belh), Jalalabad, Kunduz, Ghazni, Cevzcan
Islam (99%), others (1%)
Pashto, Dari (Afghan Persian)
42% Pashtun, 27% Tajik, 9% Hazara, 16% Turkic tribes, 2% Baluji and 4% others
Afghani (as of April 8, 2013 1 USD = 52,70 AFG),

Source: http://www.dtm.gov.tr/anl/raporlar/ASYA_AVUST/Afganistan.doc;
http://www.deik.org.tr/ulkebulteni; http://www.nakliyerehberim.com/afganistan-ulke-profili.aspx, http://www.xe.com

Afghanistan is a passageway between West Asia and Middle East; Middle East and Persian Gulf and Indian Ocean [2],[3]. With the most
important location among the North-West Asian countries [4], Afghanistan is one of the most significant gates of Middle East opening to
the south. Therefore, it is the focal point of the social, economic and political interests of Middle East and hence the countries located there
[5].
Afghanistan has 2500km-border with the Middle Eastern countries which have rich natural gas and oil resources. In this regard,
Government of Kabul pays great effort to improve its economic and political relations with those countries [6]. The strategic significance of
the country resulted in a struggle among the neighbouring countries. The struggles of those countries over Afghanistan constitute the source
of political instability [2].
Located on the passageway of the nomads throughout ages, Afghanistan is exactly situated in the junction of civilizations. The historical
artefacts exhibited in Kabul Museum with a rich cultural heritage for over five thousand years represent the richness of this culture.
Carrying the traces of sculpture art of Kuhans (Cuscan), one of the communities ruling in the region between 125-480 A.D. Afghanistan
had a civilization which could compete with Baghdad in the field of fine arts during the period of Mahmud of Ghazni. The period of
Timurids (15th century) witnessed a similar improvement in such centres as the city of Herat. In that period, handicrafts, Afghan carpets and
copper embroideries were popular [7].
There are almost twenty ethnic groups in Afghanistan. However, we can address Indo-Europeans and Turks as two main groups.
Constituting 42% of the population, Pashtuns have the biggest part among the ethnic groups. With an estimated population of 12-13 million
persons, Pashtuns are called as Afghans, too. Besides, Tajiks constituting 27% of the population live mostly in the wetlands in the northeastern part of the country. Having a population of around 10 million persons, Tajiks have leaded a sedentary life since the early ages.
Turks compose the third ethnic group of Afghanistan. The Turkish groups are Uzbeks, Turkmens and Kyrgyz populated in the north. Other
small Turkish groups apart from those continue their existence among the Afghan population. These small groups consist of Karakalpaks
around Jalalabad and Kypchaks, most of whom fled to the region of Aka, Andhoy and Hanabad due to the Russian atrocity in 1950s and
Karluks resident in the districts of Katagan, Bedashan, Rustak and ehr-I Bzurg and Chagatay Turks living around the city of old Ghazni
[8].
Since Afghanistan continued its existence in war and disorder for 28 years after the Soviet invasion in 1979, the great disruptions occurred
in the infrastructure works and education and health services. Especially, there are extremely insufficient opportunities for the Afghan
young girls and women in the field of education outside Kabul. Many schools in the cities provide just religious education. According a
research conducted in 1999, 36% of the total population are literate. As official languages, Afghanistan adopted Pashto spoken by Pashtuns
and Dari called as Afghani Persian in Constitution of 1964. Besides, there are around 30 languages spoken in the country. The language of
education is mostly Persian. There are two types of education in Afghanistan. The education is provided by Madrasas (theological schools)
in towns and villages and by the schools of government in the cities. However, all of these educational institutions have considerably been
damaged particularly during the recent years. The official educational system was provided under the Constitution of 1964. There are
totally 11 universities and colleges in the country [9].

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3.

The General Economic Status of Afghanistan

Since 1979, the war environment in Afghanistan has disrupted the socio-economic structure of the country heavily. With its major cities
and towns damaged, Afghanistan is an agriculture and livestock-based country suffering from a great shortage of employment in the field
of production. The share of revenue obtained from agriculture and livestock is 53% of gross domestic product. 61% of the employed
population are engaged in agriculture.
With a population of nearly 31 million people, Afghanistan has a workforce of 15 million people and its current accounts deficit is around
132 million USD. Nevertheless, according to the data of International Monetary Fund (IMF), Afghanistan achieved 20% growth after 2004
thanks to international supports and cessation of war. Besides, it is estimated by IMF that GDP of the country is 24 billion USD and GDP
per capita is around 800 USD [10].
The agriculture sector accounts for 65% of GDP and the share of light industry is 20%. Most of the exports of Afghanistan are with U.S.A
with 26% export rate. This rate is followed by France (17%) and Pakistan. India accounting for 16% of the exports is a significant country
for Afghan exports. The remaining export volume of Afghanistan is shared by the other countries. Dried food products occupy the largest
volume in the exports of Afghanistan which was once the biggest exporter of raisin across the world. Also, growth of fresh fruits and opium
has an important place. In light industry, hand-made carpets and leather are the leading exported products of Afghanistan. In imports,
Pakistan is the country having the greatest trade volume with Afghanistan with 27% import rate. Pakistan is followed by South Korea with
12% import rate, Japan with 8%, U.S.A with 5% and Kenya with 4%. The remaining import volume is shared by the other countries.
Within the imports, shelter supplies and medicines have the greatest trade volume with 27% import rate. Mostly machinery accessories,
food and clothing have a considerable part in the foreign trade in Afghanistan endeavouring to redevelop. Afghanistan has also started to
enhance its trade with neighbour Iran. Five memorandums of understanding were signed between Iran and Afghanistan for cooperation in
the fields of trade and economy, fight against illegal poppy-growing and trafficking of narcotic drugs and agriculture, culture, science,
education and telecommunication [7].
Due to the wars, the energy potential of Afghanistan hasnt been utilised. According to the calculations made by USSR in 1980s,
Afghanistan had 95 million barrels of oil, 140 billion cubic meter of natural gas and 73 million tons of coal reserve. However, M. brahim
ADL, Minister of Energy of the country in that period expressed in his last statement that the energy resources of the country were 10
times more than the calculations of USSR according to the evaluations of American experts [11].
A comprehensive study on the natural resources of Afghanistan hasnt been conducted yet due to long wars. The following cities and
regions are known to have abundance of some mines: silver and copper in Panjshir Province; copper in Farah Province; iron and coal in
Bamyan Province; natural gas and oil in Sar-e Pol Province; coal in Dara-I Suf; salt in Taluqan District; salt, gold, lapis lazuli and sulphur
in Badakhshan Province; copper, iron and chrome in Kabul and sulphur in Belh [12]. Apart from those, it is known that there are semiprecious and precious stones, zinc, uranium, mineral ores, lead, sulphur and barium in the country [13]. The copper resources of the country
are known to be the largest copper deposits after Chile in the world [7].
Although there are rich oil reservoirs in Afghanistan which consumes 3500 barrels of oil per day, there is no oil production in the country.
The most important natural resource processed in the country is natural gas which was discovered in 1967. The existing natural gas pipeline
in the country is known to be nearly fifty thousand km in length. According to the official data, there is production of 220 million m3
natural gas per year in the country. In 1980s, the sales of natural gas reached 300 million USD per year and this amount accounted for 56%
of the export revenues of the country. 90% of the mentioned export was with USSR. Since the Soviets withdrawal from Afghanistan in
1989, the production of natural gas has also been interrupted. Upon the finalization of restructuring period, Afghanistan is estimated to earn
revenue amounting to 330 million USD from its natural gas resources per year [7],[14].

4.

The Trade and Investment Potential of Afghanistan

Despite all problems, Afghanistan is now undergoing a process of economic reform and the re-integration of the country into the global
system is intended in this process after long wars. Thanks to the financial and monetary policies applied in 2002, GDP of the country
increased by 28%. However, while evaluating this rate, it is necessary to consider that the economy of country is almost being rebuilt. In a
short time following the foundation of Central Bank of Afghanistan, the monetary stability has been ensured; the inflation has been kept
under control and the steps towards a modern banking system have been taken. According to a statement made by an official from the
Ministry of Finance of Afghanistan to BBC, the revenues from taxes increased by 13% in 2012-2013 fiscal year compared to previous
years. Majority of those taxes were collected from the local and foreign companies investing in construction [15].
With the law that entered into force on September 16, 2003, the foreign banks were permitted to open branches in Afghanistan. Now, there
are six local and foreign private banks carrying on their activities in the country. Via the ongoing banking reform, it is planned to attract the
Afghan capital, which existed abroad for years because of wars, to the country that lacked a banking system since the central rule of
Necibullah was overthrown in 1992. Also, Standard Chartered Bank (UK) which is a micro finance bank and Afghanistan International

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Bank were opened in Kabul. These two banks are carrying on their commercial activities and the presence of them has built considerable
trust for the foreign investors.
The economic developments and reforms achieved by Afghanistan since 2002 have been beneficial in order to create a suitable
environment for especially foreign investors. These positive developments can be summarized as follows: [16], [17]:
Through the reforms made in the field of legislation, a suitable environment has been created for investments. The Investment Law that
entered into force in 2002 features a liberal law. The mentioned law enables the foreign investors to purchase the Afghan companies by
100% and rent them for thirty years and it allows shifting the whole profit obtained in Afghanistan to abroad as wished.
It is possible to allow the foreign investors to be exempted from taxes for eight years. The Afghan Government is also taking measures in
order to protect the rights of foreign investors against the illegal expropriation and seizure of properties. Thanks to the new legislation in
Afghanistan, it is now possible to address the commercial disputes in the international courts. The country is undergoing a significant
reform process in the field of Commercial Law.
The customs procedures have been facilitated and the customs tariffs have been rationalized. The export taxes have been abandoned and the
market values in the foreign exchange rate have been taken as basis for the import assessment.
The Afghan Ministry of Industry promotes the improvement of quality of exported and imported goods and also ensures to keep the prices
at a low level by creating a competitive environment.
Afghanistan is endeavouring to develop more efficient new corridors as an alternative to the existing corridors for its foreign trade. On the
other side, Afghanistan is focusing its attention on the agreements to obtain concessions in the important markets with the purpose of
increasing exports. In this regard, the commercial concessions from U.S.A, EU, Japan, Czech Republic, India and Canada were obtained; a
trilateral trade and transportation agreement was concluded among Afghanistan, India and Iran; the status of observer was gained in World
Trade Organization and a memorandum of understanding was signed between Afghanistan and the Ministry of Industry of U.S.A.
As of January 10, 2003, Afghanistan entered the General Agreement on Tariffs and Trade (GATT) by U.S.A into force. Within the
framework of this system, it is possible for nearly 5700 items of Afghan-origin products to enter into the market of U.S.A without the tariff
barriers.
The Afghan Ministry of Commerce took actions in order to establish joint chambers of commerce and industry and business councils
nationally and internationally.
With the support of the German Government, the Afghan Ministry of Commerce established Afghanistan Investment Support Agency
(AISA). While it was necessary to carry out 28 separate procedures in order to found a company in Afghanistan, the establishment of this
agency decreased the number of these procedures to five.
As one of the last developments, it has been agreed to construct rail networks between Afghanistan, Turkmenistan and Tajikistan, which
will contribute highly to the enhancement of trade among the countries of the region [15].
Afghanistan now has many advantages in terms of trade and investment and these advantages are considered to increase upon the
improvement of security environment in the country. These advantages are the following [18]:
Thanks to its strategic location in Asia, Afghanistan is situated in the key point/centre of a market with a population of 2,5 billion people
including Middle East, Pakistan, Iran, India and China.
Thanks to North-South Transport Corridor, Afghanistan provides an efficient means of transit transport for foreign trade and energy
transmission for South Asia.
The great and intact natural resources of Afghanistan, mainly oil, natural gas, iron, copper, precious minerals and metals, provide the
investors with an important potential.
The workforce of Afghanistan isnt utilised completely. There is an opportunity for considerably cheap workforce for the investors in the
country. Besides, the Turkish contracting companies carrying on business in Afghanistan point out that the quality of cheap workforce can
be improved easily.
There is a demand for all kinds of goods and services in Afghanistan and this demand is foreseen to increase regularly throughout the
forthcoming periods. Therefore, the Afghan Government pays great effort to improve the private sector. During the restructuring period,
Afghanistan will be able to provide a required product only by importing it.

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The above-mentioned situation provides the foreign exporting companies with great opportunities. The goods and services required mostly
are the following [15]:

5.

Building, architecting and engineering services,

All kinds of building materials, equipment and engineering vehicles,

Computer, spare parts of computer and software,

Telecommunication systems and equipment,

Electronic devices,

Automotive and automotive supply industry products,

Heavy engineering vehicles required by sectors,

Furniture,

Aircraft parts and airport equipment,

Oil and natural gas equipment,

Chemical materials used in agriculture and agricultural machinery,

Food processing and packaging equipment,

Irrigation technologies,

Highway equipment.

(SWOT) Analysis on The Current Status Of The Turkish Companies Carrying on Business in Afghanistan

The environment provides the future enterprises with great opportunities and threats at the same time. Moreover, it is possible to be a pawn
within the great (global) system under present conditions requiring strategic logic. However, winning the game is as important as being
involved in the game. Furthermore, it will also be necessary to set the game [19]. Therefore, the enterprises are required to renew the
SWOT analysis which enables them to play the game by its rules periodically in order to be successful in the market. SWOT analysis
includes examining the current status and experience of an enterprise as a whole, defining its strengths and weaknesses and adapting them
to the market conditions. SWOT stands for strengths, weaknesses, opportunities and threats of an enterprise in terms of the environment
where the enterprise is engaged in activities [20]. It is necessary to know the conditions shaping the foreign and domestic environment of
an enterprise via SWOT analysis and to apply production, marketing and management strategies accordingly. Considering the conditions of
domestic and foreign environment as data to define the international marketing strategies and tactics, it is required to reveal the strengths,
weakness, superiorities and opportunities [21].
SO (Strengths-Opportunities) strategy allows an enterprise to make use of its strengths and utilise the opportunities. WO (WeaknessesOpportunities) strategy enables an enterprise to utilise the opportunities provided by the external environment by taking its weaknesses into
account. ST (Strengths-Threats) strategy allows an enterprise to remove or minimize the threats encountered in the external environment
via its strengths. WT (Weaknesses-Threats) strategy enables an enterprise to minimize the threats arising from the external environment by
taking its weaknesses into account [22].
SWOT analysis provides the Turkish companies carrying on business in Afghanistan with opportunity to assess their internal status and
analyse the status of their competitors. Conducting a SWOT analysis produces two main benefits for the Turkish companies that will be
active in Afghanistan. Firstly, the current status of a company is defined via SWOT analysis and hence it is tried to put forward the
strengths and weaknesses of the company and the opportunities and threats encountered by it. In this respect, SWOT is an analysis of
current situation of the Turkish companies. Moreover, SWOT is an analysis technique used for finding out and predicting the future
status of the companies. Secondly, SWOT is an analysis of future situation. Within the framework of these clarifications, the mentioned
analysis can be perceived as eyeglasses allowing the companies to see the closest and farthest in the Afghan market. Having strengths or
weaknesses represents whether an enterprise is more effective and efficient than its competitors or not. Whether an enterprise is superior,
equal or weak compared to its competitors is defined according to the following criteria [23]:

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Comparison and estimation of the status of an enterprise within the market compared to the strongest competitor in the same field
of activity,

Relative financial structure,

Relative production technique and capacity,

Relative R&D potential,

Comparison of human skills and management efficiency.

Opportunity is an efficient situation provided by the environment in order to allow an enterprise to achieve its objectives. The production of
a new product, introduction of international markets through overseas expansion policy, decrease in the production costs and shortage in
the market of substitute goods etc. constitute an opportunity for an enterprise. Threat represents a new situation that makes it difficult or
impossible for an enterprise to achieve its objectives. The most significant threat for companies is the inability to adapt to the developing
and changing market and environment.
In the light of these information and following the face-to-face interviews and questionnaires conducted by Yolda (2006) with the highlevel managers of (45) Turkish companies engaged in business in different fields, the strengths and weaknesses of the companies and the
market threats and opportunities for them (SWOT) in Afghanistan can be summarized as follows:
5.1. The Strengths of the Turkish Companies within the Afghan Market
The strengths of the Turkish companies within the Afghan market can be listed as follows:
The Turkish companies engaged in activities in Afghanistan are mostly the ones that have achieved success in the international markets
especially in the field of contracting. Those companies have also experience in the Middle Eastern countries which bear common qualities
with the Afghan market.
The Turkish companies have a good reputation within the Afghan market because the Afghan people feel sympathy for the Turkish people
and hence Turkish companies.
The two nationalities have common cultural attributes since they are located in a close area geographically, which provides considerable
advantages for the Turkish enterprises to be favoured in the market.
Since Afghanistan and Turkey are so close to one another in terms of religion and culture, the goods/services produced in Turkey meet the
desires and needs of this market completely, which also provides an advantage for the Turkish enterprises.
The achievements gained especially by the Turkish contractor companies in Afghanistan exercise pressure on the competitors and allow for
gaining an advantage over them.
The above-mentioned attributes are the strengths that provide the Turkish companies carrying on activities in Afghanistan with a
competitive advantage over their competitors. Those attributes are the elements that enable the Turkish companies to be successful within
the market.
5.2. The Weaknesses of the Turkish Companies within the Afghan Market
The weaknesses of the Turkish companies within the Afghan market can be listed as follows:
The main weakness of the Turkish companies is their inability to introduce themselves to the Afghan people adequately. The companies
carrying on business there have poor strategic knowledge and vision.
The actions to be taken in order to develop and grow arent considered and there are no arrangements and potential assessment for it.
There is an insufficiency of internal training and hence the Turkish employees cant be adapted to the local and cultural characteristics and
the harsh geography of the country.
There is a lack of Research& Development studies,
The structural and physical problems are available,
There is a lack and insufficiency of management.

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The socio-demographic and socio-cultural structure isnt analysed adequately.

5. 3. The Opportunities of the Turkish Companies within the Afghan Market
The Turkish companies carrying on activities in Afghanistan can turn some opportunities into advantage. For instance;
Since the literacy rate of consumers is low in Afghanistan, the visual and auditory advertisements rather than the written-printed ones may
enable the companies to be favoured more effectively.
Since Afghanistan is a mosaic of cultures and languages, a foreign company desiring to enter into this market may select a market segment
which is psychologically the closest to it and hence can be more successful.
The enterprises that will make production for this market can increase the number of their customers and market share by taking the
package colours of their products into account because the customers in Afghanistan prefer mostly bright and green-packaged products.
The Afghan consumers pay great attention to prices. Moreover, they generally decide to purchase a product only by looking at the prices.
Therefore, the enterprises to be engaged in activities there can increase their market share if they apply a price policy by taking this fact into
account.
Since the consumers mostly trade with small retailers in Afghanistan, the enterprises can be more close to customers if they act in
accordance with this fact while distributing their products.
Due to the diversity of spoken languages, the adaptation of advertisements to those languages or creation of a new advertisement for this
country may increase the sales.
5.4. The Possible Threats and Risks to be encountered by the Turkish Companies in the Afghan Market
In order to define the existing or possible threats for the Turkish companies, those companies are required to ask themselves the following
questions: What are the barriers we may confront with? What are the competition conditions? Is there any change in the fields, goods and
services required by our business? Do transportation, communication and technology work against us? Is there a severe debt situation or
cash-flow problem? From this perspective, we can list the threats and risks that the Turkish companies carrying on business in Afghanistan
may face with as follows:
The main threat is that the country has just come out of war and the political stability and trust environment hasnt been ensured yet despite
the presence of International Security Assistance Force (ISAF) there.
Upon the amendment of Income Tax Law of Afghanistan on March 20, 2004, the exemptions and exceptions granted to the foreign
companies were removed, which will affect the Turkish companies negatively [24].
The Turkish enterprises carrying on business in the Afghan market are unable to adapt to the hard market conditions and their employees
are having difficulty in adapting to the harsh geography of the country.
Since Afghanistan is a neighbour of China, the easy entry of Chinese products into the county constitutes a great threat for the Turkish
products.
The ethnic structure of Afghan population is highly diversified [25]. Therefore, it is required to conduct a high-cost marketing research in
order to be successful in that market because the consumers have a considerably diversified socio-cultural structure.
Since Afghanistan is an agriculture and livestock-based country, the fluctuations in customers income affect the selection of target market
negatively.

6.

Conclusion and suggestions

Countries have the priority objectives to keep up with the globalizing or integrating world and make use of opportunities and advantages
for gaining share in the constantly growing market or world trade. In line with this purpose, more and more enterprises feel compelled to
get into international markets. Accordingly, enterprises enter into the international markets via a suitable strategy by assessing a wide range
of options including exports, founding a factory or purchasing a company.
Within this framework, Afghanistan is following the path of economic and political stability thanks to the post-war improvement in the
efficiency of restructuring projects since 2001, creation of trust environment by foreign countries politically and militarily and the Afghan
peoples support for post-war efforts for stability. The mentioned situation has increased the strategic importance of Afghanistan in
economic field again since the northern countries desire getting to the Indian Ocean and its neighbours, Iran and Pakistan want to get into
the markets of Middle Eastern Turkic Republics.

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The decisions taken by the country for foreign investors and the conscious preparations in that field attract the local and foreign companies
willing to make investment in Afghanistan. Afghanistan Investment Support Agency (AISA) was established in order to serve the local and
foreign companies willing to make investment in Afghanistan. It is free to invest by 100% foreign capital and shift all capital and profits to
abroad for the companies willing to make investment in the country.
Also the Afghan Government pays attention to improving private sector and attracting the foreign capital to the country. The improvement
of investment environment has drawn the interest of multi-national companies to Afghanistan. As the multi-national companies active in
the country, we can list Coca-Cola, Alcatel, Hyatt Hotels, Standard Chartered Bank, DHL and Toyota. Likewise, lcatel International Trade
and Afghan Wireless Communication Company (AWCC) is one of the mobile telephone companies owned by Afghanistan. According to
the data of AISA, a foreign investment amounting to 758.4 million USD was realized only between 2002 and 2006 [16].
In this context, Afghanistan is thought to be a potential market for the foreign companies and the Turkish companies will have share from
this market, too. While the trade volume between Turkey and Afghanistan was 38.7 million USD in 2003, it was 76.1 million USD by
increasing by 97%. Of this amount, 69.3 million USD belongs to the Turkish exports. In the same period, the Turkish imports from
Afghanistan increased from 2.6 million USD to 6.8 million USD. Accordingly, the Turkish entrepreneurs are the leading ones among the
foreign business environment active in Afghanistan. Likewise, according to the official data of 2003, 98% of the investment in Afghanistan
is made by the Turkish companies [26]. Thus, the greatest investor country is Turkey followed by Germany, India and Pakistan [16]. The
Turkish companies have carried out many significant projects on mainly housing, business centre, cement and construction materials.
Within this framework, the investment and trade potential provided by Afghanistan for the foreign investors, especially the Turkish ones, is
obvious. However, how will the Turkish companies gather these opportunities and use them to define their future plans and strategies?
They are required to conduct a business analysis for gathering these factors in a systematic way. The business analysis is to reveal what an
enterprise can achieve or fail. The strengths and weaknesses of every enterprise are different. No enterprise has absolute strengths and
weaknesses. What is important is to define these different qualities and functions and ensure a balance between them. Thus, the enterprise
will have the information infrastructure for the future strategic decisions and tactics of great importance and be aware of its strengths and
weaknesses and aim at the most beneficial area for itself. Via the examination of the opportunities and possible threats within the
environment, the enterprise will be able to make more efficient plans.
In conclusion, the Turkish and other foreign companies carrying on business or willing to do business in Afghanistan should take the
following issues into account in order to be successful [18]:
It is necessary to define the unmet demand and the demanded products or services in the country,
Afghanistan is a mosaic of cultures and languages and hence this diversity should be utilised in a versatile way,
The enterprises that will make production for this market should take the package colours of their products into account because the
customers in Afghanistan prefer mostly bright and green-packaged products,
The Afghan consumers pay great attention to prices. Moreover, they generally decide to purchase a product only by looking at the prices.
Therefore, the enterprises to be engaged in activities there should particularly concentrate on prices.
Since the consumers mostly trade with small retailers in Afghanistan, the enterprises should act in accordance with this fact while
distributing their products
The diversity in the spoken languages requires adapting the advertisement to these languages or creating a new advertisement for this
country. Therefore, the enterprises to make advertisement in this market should consider the language diversity there
The companies are required to pay efforts to survive in the market efficiently and constantly,
Considering that the literacy rate is low in the country, visual and auditory advertisements should be emphasized rather than the writtenprinted ones,
It is necessary to carry out various advertising activities in cooperation with the local advertising agencies in the country
It is required to establish relations with the target customers and to make these relations continuous,
The cultural structure should be analysed and the communication possibilities are required to be developed,
Adequate resources should be allocated to Human Relations and Research& Development studies

Mohammed Asf Yoldash

476

Int ernational Journal of Ec onomy, Mana ge me nt and Soci al Sc iences , 2(6) June 2013

It is necessary to establish strategic cooperation in various fields and subjects,

While entering into the Afghan market through exports, it is required to pay attention to competition of cheap Chinese, Iranian and
Pakistani goods within the market and the quality of goods should be emphasized.

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