| Afghan experts split on free market economy Pajhwok 02/04/2006 By [Printer Friendly Version]
KABUL - Independent economists, referring to the country's horrible economic indices over the last two years, argue the free market system is not in the interest of a poor nation like Afghanistan. With the approval of its new constitution two years back, the conflict-torn Central Asian country formally adopted the free market system, but analysts view the choice as incompatible with the ground realities in the given circumstances. Some experts are deadest against the Karzai administration's ongoing privatisation programme which, they insist, amounts to selling the family silver. A cabinet meeting last year approved the privatisation policy, urging the government to transfer ownership of government-run corporations to the private sector. Regarding the privatisation plan, Afghanistan National Bank's former governor Dr Abdul Qayyum Arif said it was a whole new concept for Afghanistan. With the Afghans ill-equipped for handling such a complex exercise, he warned, improvement in investment or the economy could elude the country. He contended the government should have created the conditions necessary for a gainful privatisation programme before embracing the system. "What good is a privatisation plan when there is no one to invest in Afghanistan?" he asked while referring to investors' reluctance. Dr Syed Mohammad Mangal, chairman of Kabul University's Economics Department, favours a command economy with the government is firmly in control of every sector. Professor Mangal stressed government control over the economy, which would slip into chaos if the nascent private sector is given a crucial role at this point in time. Afghanistan's economy was still in a rudimentary phase, he reiterated, where a free-market system could not yield the desired results. Sher Ali Tarzai of Afghanistan's Academy of Sciences in Kabul said a free-market economy did not suit the country because most Afghans were too poor to purchase houses, much less set up businesses. "The regime envisaged in our basic law is against the interests of the masses in that the country still lacks infrastructure and other essential facilities," observed Tarzai. Another economist, Haji Hafiz Khan believed the system would eventually concentrate all economic benefits in a specific group of moneyed people. He suggested the government should commission a survey on which system could be most beneficial for the Afghans in the obtaining conditions. But Hamiudullah Farooqi, chief executive of Afghanistan's International Chamber of Commerce, supported the sell-off of feckless government-run corporations making losses or doing no tangible good to the people. The experience of the last six decades showed the government had failed to efficiently run the public-sector organisations, insisted Frooqi, who claimed most of the 173 state-controlled entities were expensive white elephants. Professor of economics at the Kabul University, Ahmad Shoaibi, hoped the privatisation process would help put in place a competent and productive system. The private sector, he reasoned, set store by goods quality and competitiveness. He maintained entrenched government control over enterprises would translate into a total absence of initiative, progress and competition. A senior officer at the Ministry of Economy, Syed Arif Nazif preferred a mixed economy for the time being. New suggestions could be considered at some time in the future, he continued. "In the transitional period, a mixed economy - which has also been practiced in the past - is better for the country." Eng Abdul Ghafoor Rahmani, owner of the Humayun Hotak Company, urged the government to retain control of viable corporations and sell off the loss-incurring units. He opined the private sector should focus on energising the newly-launched enterprises. Hayatullah Haleem

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