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Insecurity Prompts Afghan Traders To Move Investments Abroad

FILE: Afghan police officers show their counterterrorism skills during a training session in Gozara district of Herat on July 21.
FILE: Afghan police officers show their counterterrorism skills during a training session in Gozara district of Herat on July 21.

HERAT, Afghanistan – In a worrying sign, wealthy businessmen are threatening to move their capital abroad to escape growing insecurity in a strategic western Afghan province that has turned into a key commercial and industrial hub in recent years.

A number of business owners and investors in Herat city, the provincial capital, feel compelled to move their businesses outside Afghanistan because of rising insecurity and mounting costs of funding their personal safety through the purchase of bulletproof cars and security guards.

“Naturally we are worried about being kidnapped, which prompts many businessmen to keep a security detail or a guard,” Ahmad Sayed Siddiqi, a prominent Herat businessman, told Radio Free Afghanistan while alluding to Herat’s status as the kidnapping capital of the country. “Funding our own security is expansive."

Siddiqi, 40, imports oil, gas, and other chemicals while also investing in the hospitality industry within his home province. Over the years, he has braved many threats but is now worried about his future.

He says business in Herat was already experiencing tough times because of the coronavirus pandemic, which hit Herat hardest because of its long border with Iran, where a major outbreak rapidly expanded in March, so it's only right that the Afghan government step in to help the province.

“This is why I request that the Afghan government and the Afghan National Defense and security forces seriously work on improving the security situation in Herat,” Siddiqi said. “Otherwise, more investors will be forced to look for opportunities beyond the Afghan borders.”

A few years ago, Naqibullah Haqmal invested nearly $4 million in a factory making motorcycle spare parts. He now believes the only way to keep investors in Afghanistan is to improve security so they don’t have to invest in bulletproof cars and bodyguards.

“Every year my company's security expenses amount to more than around 1 million Afghanis [$13,000], which includes personal guards and security equipment,” he told Radio Free Afghanistan. “But next year I will be forced to leave Afghanistan and invest outside the country because the expenses have become a huge burden for me.”

Investors such as Haqmal and Siddiqi are vital for promoting peace and stability in Afghanistan because their investments are key to developing the private sector and attracting vital foreign investments. But rising criminality, insecurity, and bad governance are eroding business and investor confidence in Herat as the impoverished country faces a major transition. The Afghan government is poised to begin sensitive peace talks with the Afghan Taliban. The hard-line movement signed a peace agreement with the United States in February, which stipulates the withdrawal of foreign forces in return for Taliban counterterrorism guarantees and eventually joining other Afghans in a future political system.

Herat is home to the Islam Qala and Torghundi border crossings with neighboring Iran and Turkmenistan. These two vital trade arteries offering industrial parks, better security, and the ease of doing business attracted many investors to Herat following the demise of the Taliban regime in late 2001.

But Ahmad Saeed Qasimyan, deputy head of Herat’s chamber of commerce and industry, says businesses are losing tens of thousands of dollars on security at a time when they are hit hard by an economic downturn. “Providing security is the government’s job but we are forced to lose time, money, and energy because of its incompetence,” he told Radio Free Afghanistan.

Officials in Herat, however, do not agree. Provincial police chief Obaidullah Noorzai says they are doing everything in their power to improve security in the vast region, where the Taliban control parts of the countryside. “The fact that kidnappings have decreased [this year] means that police in Herat are active and working to keep all our residents safe, including business owners and investors,” he told Radio Free Afghanistan.

Noorzai says the province suffers from a lack of military personnel and police officers, which feeds the mounting insecurity.

Nilly Kohzad wrote this story based on reporting by Radio Free Afghanistan correspondent Shapoor Saber from Herat, Afghanistan.