Afghan entrepreneurs find profit in technology
By Michael Coren
CNN -- Camels and caravans once carried vast treasures into Afghanistan along the Silk Road.
Today, in the aftermath of two decades of civil war, technology is beginning to return some of that wealth to the shattered country. Although deeply divided by geography and ethnicity, a nascent technological boom in Afghanistan is spreading beyond the cities and has the potential to reshape the country.
"Two years ago, when we went into Afghanistan, there wasn't' even a working road grader in the whole country," said Harry Reid of USAID, the government aid agency. He said that most advanced technology were mine detectors.
Today, this country of 29 million has more than 662,500 people using mobile phones, reports the GSM Association, a cellular trade group. Afghanistan's Internet domain, .af, was awarded in March 2003 and Web cafes are springing up around Kabul. Microsoft is even inserting phrases of Afghanistan's two dominant languages, Dari and Pashto, into its software.
That is a sea change from 2002 when only one telephone line existed for every 1,000 people, according to the Afghan government. The United States government counted only 1,000 Internet users and 15,000 people with mobile phones in the whole country, among the lowest in the world.
"I was in dire need of having a mobile phone because my brothers live abroad," says Shafiquallah Waak, an engineer in the capital of Kabul. "Having a mobile (phone) has put an end to our problems."
Afghans have long been enthusiastic entrepreneurs. Their location at the crossroads of Asia earned them a reputation as savvy traders across the region. Aid workers report that within hours of the Taliban's fall from Afghanistan's capital in 2001, vendors were hawking once-banned DVDs on the streets.
Technology offers those commercial instincts new outlets.
"One of the reasons for Afghan success in the past has in essence been communication," said a U.S. State Department spokesman for the region. "Trade depends on communications. The new technologies that are becoming available are giving (Afghans) an opportunity to blossom again in their traditional role, but using new tools."
However, for most in Afghanistan, poverty remains the standard condition.
The economy produces few salable goods. Textiles, such as Afghanistan's legendary carpets, and crops including the world's largest illicit opium harvest, are its most important products. Agriculture employs about 80 percent of the population in this Texas-sized country where only one-eighth of the land is arable. Exports, not including opium, totaled about $98 million in 2002.
Improving this situation has meant starting from scratch. Decades of war have left the roads, utilities and public works in shambles.
"Economic activity is difficult, costly and at times impossible," the Afghan government stated in its Telecommunications and Internet Policy report. "After 23 years of conflict and stalled investment, the entire (communications) sector needs to be completely rebuilt."
This new infrastructure, funded with cash from investors and foreign donors, is stitching together a country divided by more than 70 languages, dozens of tribal and ethnic alliances and the repressive legacy of the Taliban, which ruled the country from 1996 to 2001.
So far, the spread of technology has depended on trade. Commercial routes between cities are feeding the expansion of mobile phone access while whetting the population's appetite for instant communication.
"It's allowing the very obvious entrepreneurial sprit of Afghans to come out and be expressed," said the State Department official. "(Telecommunications) has been a tremendous multiplier for the reconstruction of Afghanistan."
Roshan, the largest mobile phone company in Afghanistan, opened its doors in 2003 and signed up 50,000 people during its first year. By 2005, more than 300,000 people were on its network in 25 cities and eight towns. Roshan recently won the country's first international prize for a marketing campaign, "Light and Hope," for ads that cross ethnic boundaries with shared Afghan passions such as volleyball.
"We hope the market will break 1 million (customers) this year," says Altaf ladak, Roshan's chief marketing officer in Kabul. "It's growing much faster than anticipated. We've been quite surprised."
Roshan's competitor, Afghan Wireless, which is partly state-owned, is also expanding. Together, the firms have invested $240 million in the sector, according to the government. The government ministries intend to build a national long distance network providing basic voice, data and Internet communications even in the most remote regions of the country.
Convincing investors and multinational firms that Afghanistan represents a good bet remains difficult.
Sadd Mohansi of Moby Capital, an Australian-based financial firm focusing on Central Asia, said that Hyatt hotels, Coca Cola Hyundai, Toyota and Nissan are considering setting up shop in Afghanistan. Major hurdles, such as the crumbling infrastructure and lack of commercial laws, must be cleared to reassure investors.
"There is a lot of activity. People are looking at Afghanistan," said Mahmud Jan Mohamed, managing director for Serena Hotels, which is building in Afghanistan. "My own feeling is that perhaps other investors will take a little bit of a wait-and-see approach. Afghanistan certainly needs help."
Mohamed will oversee the Kabul Serena Hotel, financed with $28.5 million from the Aga Khan Fund for Economic Development, when it opens its doors this July. The five-star, 178-room luxury property offers all the amenities of the affluent world beyond Afghanistan's borders. With rooms as much as $300 a night, investors might be more inclined to spend the night -- and their money -- in Afghanistan.
"We've had lots of applications from young Afghans who left the country during the trouble, and a lot of them have joined us and returned home," he said. "It was a most satisfying thing to see."