final tafa survey report 2010

8/3/2019 Final Tafa Survey Report 2010

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FINAL SURVEY REPORT

Knowledge, Attitude, and Practice (KAP) Survey

of Afghanistan towards Trade

Sponsored by USAID/TAFA

Conducted by AIR Consulting

An Afghan Survey & Research CompanyBased in Afghanistan

September 2010


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Table of Contents

Executive summary

Introduction

About AIR Consulting

Methods and respondent demography

Detailed survey results

G series questions S series questions I series questions

Transcript of deep interviews

Annex I: survey questionnaire


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Executive Summary

This report focuses on Afghans knowledge, attitudes, and practices related to trade andits potential benefits for Afghanistan. In response to a request for proposal by

Chemonics/TAFA, AIR Consulting undertook the survey design, data collection, andanalysis presented here. It utilized surveys of the general Afghan population acrossselected provinces and key sub-populations who are involved with various facets ofinternational trade. In addition, in-depth interviews with selected individuals contributedto a deeper understanding of trade issues from the perspective of the government, traders,academia, producers, and other entities in Afghanistan.

The main findings include:

People see trade as a means for economic growth. Ninety-one percent of surveyrespondents were positive towards trade. They also stated the biggest benefits to

trade are better job opportunities (32 percent) and increased economic growth (31 percent). In addition, regardless of trade status, respondents felt regional tradeagreements were beneficial to Afghanistan (traders: 96 percent, non-traders: 92percent). In-depth interviews, though, provided a mixed portrait of peoples viewson trade, market economics, and the future.

However, trade prospects are tempered by insecurity and government corruption.About 90 and 50 percent of respondents, respectively, stated insecurity andgovernment corruption are one of the top three obstacles to trade in Afghanistantoday.

Most people would do business with a female trader (79 percent). In-depthinterviews indicated that trade as an occupation for women would be okay, butthere were caveats; many thought that travel and other cultural concerns were animpediment and security a concern. However, some interviewees stated thatfemales could be as successful, if not more successful, than men. Impediments tofemale trading are backed up by survey results: security as a concern wasmentioned by 60 percent of respondents and cultural concerns by 48 percent.

Respondents have a detailed understanding of what could be done to increaseinternational trade. About 65 percent of survey respondents said building coldstorage or buying cold trucks to transport products was one of the top three

measures to increase a famers ability to access foreign markets. Moreover, about50 percent of respondents stated that better technology would be one of the topthree measures to improve the sale of Afghan products in international markets.Higher product quality (about 63 percent) and better packaging (about 65 percent)were also mentioned.

These results are supported by the in-depth interviews. In addition to thetechnology, packaging, and quality concerns, in-depth interview respondents were particularly concerned about tariffs and the impact on trade. Respondents were


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perplexed by the complicated and detailed tariff schedule on goods (e.g., differenttariffs for yellow- and orange-colored hard candies). Respondents advocated for amore simplified system of tariffs.

Afghans felt continued strengthening of the market economy in the post-Taliban era was

a priority. A nearly universal feeling was that trade plays a large role in economicprosperity. However, in-depth interviews revealed that while many are in favor of marketprinciples and trade in theory, they do not feel that operating within such a system is a practical reality in Afghanistan at this time, under the current conditions. Citingcorruption and a lack of government support for constitutionally-identified marketprinciples, many stated that the economy does not currently operate on market principles;rather, people are forced to adjust to the reality of economic operations withinAfghanistan, such as corruption, government policy positions, and in some cases,smuggling.

Respondents pinned the responsibility of turning towards market principles squarely on

the government. While government officials admitted to existing problems, they alsopointed to improvements over the years. Government officials seem to have knowledgeof market economics and the role trade plays, but interviewees reported that putting thatknowledge into practice is more difficult.

Anecdotally, in comparison to other questions, in-depth interviews asking about trade asa profession for Afghan females elicited shorter answers. In some interviews, it seemedrespondents treated the question lightly, like it was more or less an abstraction. There wasdisagreement amongst respondents about whether trade was a good profession forwomen, though most seemed to treat the matter positively.

Afghans sense of what would improve the countrys international trade was broad. Manysaid, both in surveys and in in-depth interviews, that packaging of Afghan goods neededto improve for marketing abroad, while the quality of export goods also needed toincrease. In-depth interview respondents often commented that Afghan traders hadinformation about which markets were best, but that product quality and marketingneeded improvement.

Underlying all findings are Afghans sense of security and their attitude towards the roleof government today. Security was a major concern on a number of issues from thesurvey impediments to trade, threats to female involvement in trade and from in-depth interviews. There also seemed to be a strong concern about the government ofAfghanistans role in increasing trade. Many seemed impatient for greater economicgrowth and blamed the government for the lack of opportunities. Others more concretelypointed out government corruption as an impediment to trade growth and yet a potentialoutcome of more trade in Afghanistan.


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Introduction

The USAID-funded Trade and Accession Facilities for Afghanistan (TAFA) project,implemented by Chemonics International and its partners, aims to increase Afghanistansability to develop and implement sound trade policies that provide the foundation for

increased trade and investment. In the process, the program also seeks to stimulategreater public awareness, involvement, and understanding of trade-related marketreforms.

The goal of TAFA is to improve the trade environment, including cross-border trade andtransit for Afghanistan, so as to foster increased investment, exports, and market-basedemployment opportunities. This will be accomplished through (1) increasingAfghanistans ability to participate more effectively in the regional and global economywhile maintaining a liberal trade regime; (2) improving the conditions for internationaland cross-border trade and transit by removing bottlenecks and reforming customs andother border clearance procedures; and (3) helping the government of Afghanistan and

the private sector to benefit from greater regional and global trade linkages and economicintegration.

The TAFA project solicited proposals from qualified research firms and institutions toconduct quantitative and qualitative opinion survey research on market-based reformsand trade-related knowledge, attitudes, and practices within the general population andamong key interest groups such as business entities, traders, agricultural producers,educational institutions, civil servants, and the mass media in Afghanistan.

Guidelines stipulated the survey cover at least seven provinces, including two each in theNorth, East, and West regions, plus Kabul, and target people living in the border regionswhose livelihoods depended on trade. The survey, in each selected region and borderarea, needed to be broadly representative of the demographic and urban-rural distribution present in the Afghan population; finally, women and youth needed to be adequatelyrepresented.

The general survey needed to be supplemented by a smaller, targeted survey of traders,businesspeople, and other stakeholders attitudes and perceptions.

TAFAs objective for information derived from this survey research was to:

1. Determine the level of knowledge, attitudes, and perceptions among the general population and interest groups including: business entities (e.g. lightmanufacturing and agribusiness firms), traders, agricultural producers,educational institutions, civil servants, and mass media about the marketeconomy, trade policy, tariffs, customs rules/procedures, and WTO accession.

2. Design, develop, and implement effective messaging for a public informationcampaign for key target interest groups and the general public to raise awarenessand educate the public about market reforms, trade issues and the governmentsefforts to improve the trade environment.


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3. Tailor TAFA public outreach and capacity building activities and monitor

progress.

About AIR Consulting Survey and Research Company:

AIR Consulting was established in 2007 by a number of Afghan Fulbright alumni whograduated from distinguished US universities specializing in social sciences,mathematical modeling, and robust decision-making methodologies. Today, AIRConsulting has expanded its network of partnership by partnering with similar institutionsfor greater regional outreach in a number of other countries in the region.

One of the areas of concentration of AIR Consulting is political and economic study ofgovernance and state-building in the context of least-developed countries. In the lastthree years, AIR Consulting has been working extensively with international institutions

such as the Asia Foundation, World Bank, Bearing Point, Brookings Institution, USInstitute for Peace, RAND Corporation, Chemonics, Open Society Institute, and anumber of other organizations regarding issues related to governance, security, andeconomic development of Afghanistan.

The institution is lead by a team of about 14 senior researchers under the leadership ofAhmad Idrees Rahmani, a PhD candidate in research and policy analysis. The core of theinstitutions capacity is drawn from a network of about 400 Afghan juniorresearchers/students from different Afghan universities across the country who workclosely with AIR Consulting on many different survey and evaluation projects.

The organization also maintains a network of senior researchers from leading US andEuropean think tanks and universities who are brought in when their technical skills andknowledge are necessary and affordable.

Currently AIR Consulting researchers are working on a number of survey and evaluationprojects related to Afghanistans political and economic development across the country.This survey was, particularly, designed and supervised by Ahmad Idrees Rahmani, theprinciple investigator, Andrew Hackbarth, the technical advisor, and Mathew Hoover, thesurvey manager for this project, and Iraj Khaliqi, the deputy survey manager.

AIR Consulting is an emerging survey, research and evaluation organization, that is aproduct of Afghanistans new generation of elites and future potential leaders.

For more information about AIR Consulting and its activities, please refer to theinstitutions brochure and website recently launched athttp://www.policy.hu/rahmani/AIR/AIR_Consulting.html and www.AIRPolicyWatch.org
http://www.policy.hu/rahmani/AIR/AIR_Consulting.htmlhttp://www.airpolicywatch.org/http://www.airpolicywatch.org/http://www.policy.hu/rahmani/AIR/AIR_Consulting.html


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Methods and Respondent Demographics

The objectives of our sample design were: (1) to produce survey results that wererepresentative of all Afghans, (2) to take advantage of and investigate systematic KAPdifferences between residents of interior and border regions, and (3) to complete our

survey within the projects time, budget, and security constraints. To accomplish theseobjectives, we implemented a stratified, cluster sample design. Two strata were used residence in border vs. interior provinces and within each stratum five provinces wereselected as clusters. Provinces, then towns or districts within those provinces, wereselected as a convenience sample to avoid fielding survey teams in prohibitivelydangerous areas; however, representation of Northern, Southern, Eastern, and Western parts of Afghanistan were included to improve the representativeness of the clustersample. The figure below identifies the provinces sampled.

The following table shows the number of completed survey responses from each sampledprovince. A total of 1,327 surveys were completed.

Province Location Responses

Balkh Border 181

Baghlan Interior 140

Bamyan Interior 151

Ghazni Interior 150

Herat Border 180

Jalalabad Border 175


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Kabul Interior 250

Kandahar Border 50

Khost Border 25

Paktia Interior 25

Total: 1,327

All respondents received a series of general questions about trade (the G-series 1), aswell as two questions related to information dissemination (the I-series). Allrespondents also completed a series of demographic questions (the D-series). Some ofthe respondents (a total of 473, or 36% of the total sample) those likely to have a moreexposure to issues related to trade based on their occupation received a series ofadditional special survey questions (the S-series). Finally, twelve special respondents participated in in-depth interviews with the projects principal investigator. Theseindividuals were chosen from a variety of disciplines including government, academia,trade, and production for their unique knowledge in conjunction with trade regarding

Afghanistan.

While male respondents were not given incentives to participate in the survey, womenwere offered $1 or $2 telephone credit cards in order to increase female response rates.(While $1 or $2 cash is not considered a substantial amount of money to Afghans,telephone credit cards for the same amounts are considered valuable.) However, evenwith these incentives, female non-response rates were much higher than males;approximately one quarter of survey respondents are female.

In calculating the sample size necessary to achieve adequately small margins of error, weassumed a design effect of 2.0 and 1.5 for the general and special respondent cohorts,

respectively similar to other surveys fielded in similar settings. (The design effectrepresents the penalty to statistical precision associated with using a clustered samplingdesign rather than simple random sampling. A higher design effect indicates a higherpenalty.) However, these estimates were often substantially lower than the actualdesign values obtained in our statistical analysis, indicating relatively high agreement(low variance) within the same province and relatively low agreement (high variance)between provinces. Statistically, this resulted in larger margins of error than expected forthe answers to some questions. Design weights were particularly high for border provinces, suggesting that attitudes are fairly homogenous within any given borderprovince, but attitudes may vary substantially from one border province to the next.

Probability weights for each respondent were calculated based on his or her province ofresidence. Probability weights represent the inverse probability that the respondent wasincluded in the sample frame; in this case, the sum of the probability weights of allrespondents sampled from a particular province is equivalent to the total population ofthat province.

1For more details, please refer to the copy of questionnaire attached as Annex I of this report.


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All statistical calculations were performed using the svy suite of commands in Stata

version 10.1, by StataCorp LP, and the charts and tables below all properly account for

weighting and design effects. Some graphs were created using the CATPLOT module,

developed for Stata by Nicholas Cox.

The following series of graphs describe the demographic composition of the surveysample:

76%

24%

Male Female

Question D1: Gender

Note: special incentives were used to increase participation ofwomen in the survey (each female respondent were offered a50Afghani or 100 Afghani worth of telephone credit card if

she was not willing to take the survey. Still sampling amongfemale population was a challenge for the survey in general.


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24%

31%

28%

15%

1%

Age 18-25 Age 26-35 Age 36-45

Age 46-60 Age 61+

Question D2: Age

75%

22%

3%

Married Not Married Widow(er)

Question D3: Marital status


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11%

42%

24%

8%

7%

7% 2%

3000 or less 3001 - 10,000 10,001 - 20,000

20,001 - 40,000 More Than 40,000 No Response

Don't Know

Question D5: Monthly income (in Afghanis)

27%

13%

14%

31%

10%

6%

None or Informal Primary Secondary

Vocational or High School University or Above No Response

Question D4: Highest education level


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9%

22%

12%

6%4%3%

9%

10%

11%

15%

Trader Retailer Small Business

Large Business Farmer Professional Worker

Educator / Student Government Employee Other Employed

Unemployed

Question D6: Occupation

34%

11%

4%

49%

3%

Small Medium Large

No Land No Response

Question D7: Size of farmland owned

Note: occupations weregiven as free-text answers by respondents acategorized by the project

team.


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24%

74%

1%

Trades Doesn't trade No Response

Respondent or family member is trader


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0.02

0.02

0.05

0.06

0.11

0.17

0.17

0.20

0.22

0 .05 .1 .15 .2Fraction among respondents answering Yes to Question G1

Gems and minerals

No Response

Manufactured products

Furniture and wood products

Rugs and handicrafts

Agriculture or food product

Household items

Construction materials

Other

Respondents answering Yes to Question G1 may select one option

Question G2: If you or your family engage in trade,what do you or your family members trade?

Response Estimate Lower Bound Upper Bound

Other 0.2172 0.1215 0.3576

Construction materials 0.1963 0.1474 0.2565

Household items 0.1693 0.1092 0.2531Agriculture or food product 0.1678 0.0991 0.2697

Rugs and handicrafts 0.107 0.0636 0.1746

Furniture and wood products 0.0567 0.0375 0.0849

Manufactured products 0.0462 0.0235 0.0887

No response 0.024 0.0102 0.0552

Gems and minerals 0.0155 0.0029 0.0798

N = 273

Comments:Note that only respondents that answered Yes to question G1 (Doyou or any members of your family engage in trade) were asked this question.

Two categories of trade goods composed nearly half of all free-text Otherresponses: mostly cars or car parts (31%) and computers or other electronics(15%).


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0.02

0.040.04

0.04

0.06

0.09

0.09

0.11

0.12

0.15

0.15

0.15

0.31

0.32

0 .1 .2 .3Fraction of all respondents

Important to tradition / religion

Improved security in AfghanistanNo response

Exchange of culture / ideas / knowledge

Low prices in the market

Don't know

Better relations with other countries

More export of Afghan products

Access to imported goods

Other

Improvements to industry / infrastructure

More income for the government

Overall economic growth

Better job opportunities in trade

Respondents were instructed to provide up to three free-text answers

Question G3: What are three advantages to tradefor Afghanistan?

Response Estimate LowerBound

UpperBound

Better job opportunities in trade 0.3188 0.23 0.4229

Overall economic growth 0.3128 0.2535 0.3788

More income for the government 0.1545 0.0437 0.4223

Improvements to industry / infrastructure 0.1521 0.0921 0.2408

Other 0.1451 0.0994 0.2071

Access to imported goods 0.1197 0.0774 0.1804

More export of Afghan products 0.1144 0.0593 0.2092

Better relations with other countries 0.0932 0.0363 0.219

Dont know 0.0872 0.0431 0.1684

Low prices in the market 0.0594 0.0296 0.1156

Exchange of culture / ideas / knowledge 0.0428 0.0109 0.1541

No response 0.042 0.0165 0.1027

Improved security 0.0412 0.0178 0.0925

Important to tradition / religion 0.0201 0.007 0.0561

N = 1327

Comments:Note that respondents provided free-text responses to this question,which were later coded by the project team.


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0.01

0.03

0.03

0.03

0.04

0.06

0.07

0.09

0.13

0.15

0.18

0.19

0.25

0 .05 .1 .15 .2 .25Fraction of all respondents

Dependence on foreign countries / markets

Increased income inequality

Goods will become more expensive

Introduction of foreign culture / behavior

Afghan businesses cannot compete

Decrease in wealth / resources

Domestic producers will be hurt by imports

No response

Other

No disadvantage

More crime / corruption / insecurity

More low-quality / illegal goods

Don't know


Question G4: What are three disadvantages to tradefor Afghanistan?


UpperBound

Dont know 0.2496 0.1761 0.3409

More low-quality / illegal goods 0.1902 0.1284 0.2725

More crime / corruption / insecurity 0.178 0.0668 0.3959

No disadvantage 0.1525 0.0756 0.2836

Other 0.1297 0.0751 0.215

No response 0.0911 0.0648 0.1267

Domestic producers will be hurt by imports 0.0716 0.0314 0.155

Decrease in wealth / resources 0.0614 0.0278 0.1302

Afghan businesses cannot compete 0.0404 0.0165 0.0952

Introduction of foreign culture / behavior 0.027 0.0045 0.1448

Goods will become more expensive 0.0263 0.013 0.0525

Increased income inequality 0.0255 0.0129 0.0498

Dependence on foreign countries / markets 0.011 0.0053 0.0227

N = 1327

Comments:The high frequencies of Dont know, No disadvantage, and Noresponse responses suggest that a large number of Afghansthough perhapsnot the majoritydo not see any significant disadvantages to increased trade.(Note that respondents provided free-text responses to this question, which werelater coded by the project team.)


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0.01

0.02

0.02

0.03

0.05

0.05

0.06

0.10

0.12

0.15

0.17

0.23

0.31

0 .1 .2 .3Fraction among respondents who trade or whose family trades

Dependence on foreign countries / markets

Introduction of foreign culture / behavior

Increased income inequality

Goods will become more expensive

Domestic producers will be hurt by imports

Afghan businesses cannot compete

Decrease in wealth / resources

Don't know

No response

No disadvantage

Other

More low-quality / illegal goods

More crime / corruption / insecurity

Only respondents who trade or whose family trades

Question G4: What are three disadvantages to tradefor Afghanistan?


UpperBound

More crime / corruption / insecurity 0.306 0.1204 0.5868

More low-quality / illegal goods 0.2338 0.1601 0.328

Other 0.1733 0.097 0.2903

No disadvantage 0.1492 0.0536 0.352

No response 0.123 0.0557 0.2501

Dont know 0.104 0.0563 0.1844

Decrease in wealth / resources 0.0614 0.024 0.1482

Afghan business cannot compete 0.0505 0.0226 0.109

Domestic producers will be hurt by imports 0.0501 0.0165 0.1425

Goods will become more expensive 0.0258 0.0114 0.0573

Increased income inequality 0.0185 0.0059 0.0566

Introduction of foreign culture / behavior 0.0164 0.0021 0.1187

Dependence on foreign countries / markets 0.0085 0.0022 0.0329

N = 272

Comments:This chart shows only the responses of those who engage in trade,who might have the best insight into the possible disadvantages of trade. Whilethe precision for this relatively small subset of respondents is low (note the largeconfidence intervals), traders seem to be most concerned with corruption andillegal activity.


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0.01

0.01

0.07

0.91

0 .2 .4 .6 .8 1Fraction of all respondents

Don't Know

No Response

No

Yes

Respondents may select one option

Question G5: Do you think increased trade createsmore jobs, wealth, and economic opportunities?


Yes 0.9128 0.8178 0.9606

No 0.0676 0.0253 0.1682

No response 0.011 0.0037 0.0328Dont know 0.0086 0.0032 0.0229

N = 1327

Comments:The results of this question suggest that an overwhelming numberof Afghans view trade positively, at least with respect to economic outcomes.


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0.01

0.00

0.04

0.95

0.01

0.02

0.09

0.88


In

terior

Border

Don't Know

No Response

No

Yes

Don't Know

No Response

No

Yes

By province location


Border provinces only:


Yes 0.8804 0.6946 0.9597

No 0.0931 0.0232 0.3071

N = 611

Interior provinces only:


Yes 0.953 0.8808 0.9823

No 0.0359 0.0123 0.1002

N = 716

Comments:Regarding the benefits of trade, residents of border provinces areslightly less enthusiastic than interior province residents. However, support isremarkably high across both groups.

Note that border province estimates are much less precise than interior provinceestimates. (Note the different confidence interval sizes.) The low precision ofborder province estimate is driven by the fact that, on this question, respondentsfrom the same border province were likely to give the same response, butopinions differed substantially from one border province to the next.


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0.01

0.01

0.08

0.90

0.00

0.01

0.02

0.97


Does

n'ttrade

Trades

Don't Know

No Response

No

Yes

Don't Know

No Response

No

Yes

By whether respondent or family trades


Traders only:


Yes 0.9708 0.9198 0.9897

No 0.0202 0.0035 0.1082

N = 272

Non-traders only:


Yes 0.8979 0.7938 0.9526

No 0.0811 0.0328 0.1871

N = 1035

Comments:These results are quite intuitive and as expected


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0.01

0.02

0.03

0.30

0.34

0.40

0.41

0.46

0.56

0.57

0.58

0 .2 .4 .6Fraction among respondents

answering Yes to Question G5

Other

No response

Don't know

Economic opportunities for women

Trading is our natural role as Afghans and a respected tradition

We are able to sell more and get more money

Trade builds friendship and ties with other countries

Getting the important technologies and machines to make life easier

Trade means prices are lower for goods because businesses compete

The goods in the market come from all over the region and world

We can buy things we do not make in Afghanistan

Respondents may select multiple answers

Question G5a: Why does increased trade createmore jobs, wealth, and economic opportunities?


We can buy things we do not make inAfghanistan

0.5813 0.485 0.6718

The goods in the market come from all over

the region and world

0.5712 0.4419 0.6914

Trade means prices are lower for goodsbecause businesses compete

0.5554 0.4836 0.625

Getting the important technologies andmachines to make life easier

0.4628 0.2986 0.6356

Trade builds friendship and ties with othercountries

0.4076 0.2764 0.5534

We are able to sell more and get moremoney

0.4018 0.2441 0.5828

Trading is our natural role as Afghans and arespected tradition

0.3386 0.2017 0.5092

Economic opportunities for women 0.3021 0.1615 0.4932Dont know 0.0289 0.0114 0.0713

No response 0.0214 0.0055 0.0799

Other 0.0129 0.0065 0.0252

N = 1202

Comments:There is a heavy emphasis on the benefits of increased imports.


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0.00

0.02

0.07

0.14

0.29

0.60

0.63


answering No to Question G5

Don't know

Other

No response

Too many foreign goods and services will enter our market

Afghan producers cannot compete with foreign producers

Only businesses with government connections will succeed

Too many low quality and dangerous goods will enter our markets


Question G5b: Why does increased trade not createmore jobs, wealth, and economic opportunities?


Too many low-quality and dangerousgoods will enter our markets

0.6329 0.5421 0.7152

Only business with government

connections will succeed

0.5997 0.2641 0.8622

Afghan producers cannot compete withforeign producers

0.2879 0.1959 0.4014

Too many foreign goods and services willenter our market

0.1436 0.0801 0.244

No response 0.0655 0.0145 0.2504

Other 0.0229 0.004 0.1217

Dont know 0 0 0

N = 94

Comments:Corruption and low quality goods are considered to be associatedwith increased trade.


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0.02

0.06

0.10

0.37

0.46

0.52

0.52

0.59

0.60


No response

Don't know

Other

Small farmers

Large farmers

Transporters

Rug, textile, handicraft makers

The government

Manufacturers


Question G6a: Who will benefit mostfrom increased exports?


Manufacturers 0.595 0.4297 0.7413

The government 0.585 0.4236 0.73

Rug, textile, handicraft makers 0.5236 0.2902 0.7471Transporters 0.5182 0.3831 0.6507

Large farmers 0.4639 0.2711 0.6683

Small farmers 0.3656 0.2037 0.5649

Other 0.0979 0.035 0.2453

Dont know 0.0555 0.0329 0.0922

No response 0.0213 0.0104 0.0433

N = 1327

Comments:It is important to note that people believe the government benefitsmore than all groups but manufacturers from increased exports.


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0.06

0.09

0.10

0.12

0.14

0.15

0.28

0.49

0.55


Don't know

Small farmers

Other


Large farmers

No response

Manufacturers

Transporters

The government


Question G6a: Who will benefit mostfrom increased imports?


The government 0.55 0.3984 0.6927

Transporters 0.4934 0.3627 0.625

Manufacturers 0.2818 0.1756 0.4195No response 0.1458 0.0828 0.2442

Large farmers 0.1386 0.0702 0.2555

Rug, textile, handicraft makers 0.1151 0.0795 0.1638

Other 0.0976 0.0329 0.256

Small farmers 0.0879 0.0597 0.1275

Dont know 0.0555 0.0329 0.0922

N = 1327

Comments:Again, government is considered the main beneficiary of moretrade.


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0.05

0.05

0.06

0.07

0.09

0.10

0.14

0.17

0.49


Transporters

The government


Manufacturers

Other

Large farmers

Don't know

Small farmers

No response


Question G6b: Who will bear the most costfrom increased exports?


No response 0.4864 0.3887 0.5851

Small farmers 0.1665 0.1338 0.2051

Dont know 0.137 0.0971 0.1897Large farmers 0.1039 0.0733 0.1453

Other 0.0889 0.0276 0.2511

Manufacturers 0.0727 0.0422 0.1222

Rug, textile, handicraft makers 0.0598 0.0345 0.1019

The government 0.0531 0.0269 0.1023

Transporters 0.0477 0.0168 0.1282

N = 1327

Comments:People know little about the cost of increased exports, but do knowabout the benefits and costs of more imports. This may be related to the smallervolume of exports from Afghanistan currently.


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0.06

0.06

0.07

0.09

0.20

0.26

0.36

0.41

0.46


Don't know

Transporters

The government

Other

No response

Manufacturers


Large farmers

Small farmers


Question G6b: Who will bear the most costfrom increased imports?


Small farmers 0.2587 0.1255 0.4591

Large farmers 0.4568 0.3735 0.5425

Rug, textile, handicraft makers 0.4102 0.304 0.5255Manufacturers 0.356 0.2097 0.5353

No response 0.0612 0.0207 0.167

Other 0.0687 0.0399 0.1159

The government 0.0933 0.0298 0.2563

Transporters 0.0555 0.0329 0.0922

Dont know 0.2032 0.1649 0.2477

N = 1327

Comments:The lack of knowledge about the costs of trade is not present withrespect to imports.


28/120

0 .2 .4 .6 .8 1

Fraction of all respondents

Other

Better informationabout foreign markets

Pricing informationfor other countries

Better technologyto improve products

Higher product quality

Better packaging

"Not selected" indicates the respondent did not select the current item, but selected others."No response" and "Don't know" indicate the respondent did not select any items.

Respondent assigns ranks to one or more options

Question G7: Which of these measures would best improvethe sale of Afghan products in international markets?

First Second Third Fourth Fifth

Sixth Not selected Don't know No response

Comments:Note that the point estimate given in the table above (and insimilar tables for this type of question throughout the rest of the report)represents the likelihood that respondents would rank that item as their top

choice.

Response was ranked First Estimate Lower Bound Upper Bound

Better packaging 0.3543 0.2454 0.4808

Higher product quality 0.2779 0.2252 0.3375

Better technology to improve products 0.1711 0.122 0.2347

Pricing information for other countries 0.1085 0.0734 0.1577

Better information about foreign markets 0.0652 0.038 0.1098

Other 0.0054 0.001 0.027

N = 1327


29/120


Other

Low quality of goods / inabilityto meet international standards

Lack of production capacity

Unclear customs procedures

Lack of pricing information

Transportation challenges

Crime on the roads

Government corruption

Security war situationand road checkpoints



Question G8: What are Afghanistan's biggest obstacles to trade?


Sixth Seventh Eighth Ninth Not selected

Don't know No response


Security war situation and road checkpoints 0.7561 0.6947 0.8085

Government corruption 0.0857 0.0663 0.1101

Crime on the roads 0.0528 0.0277 0.0983

Transportation challenges 0.0264 0.019 0.0365

Lack of pricing information 0.0204 0.0118 0.035

Unclear customs procedures 0.0162 0.008 0.0327

Lack of production capacity 0.0147 0.0071 0.0302

Low quality of goods / inability to meetinternational standards

0.0088 0.0032 0.024

Other 0.0033 0.0007 0.0144

N = 1327

Comments:It is interesting to note that while low quality of products is notconsidered a major obstacle to trade, in another question when asked aboutwhat would improve export of Afghan goods abroad, quality of goods wasscored higher.


30/120

0 .2 .4 .6 .8 1


Provide better trainingto Government officials

Other

Reduce regulations

Reduce taxes and fees

Provide training andeducation to producers

Improve roads and transportation links

Improve Afghan Customs Department



Question G9: How should the Government help Afghans export?


Sixth Seventh Not selected Don't know No response


Improve Afghan Customs Department 0.4128 0.3424 0.4869

Improve roads and transportation links 0.2142 0.1583 0.2831

Provide training and education to producers 0.1008 0.0578 0.1698

Reduce taxes and fees 0.0965 0.049 0.1815

Reduce regulations 0.0335 0.0175 0.063

Other 0.0221 0.0048 0.0956

Provide better training to Government officials 0.0178 0.0108 0.0291

N = 1327

Comments:It is interesting that reducing regulation was not scored as animportant issue.


31/120

0 .2 .4 .6 .8 1


Other

Share information about product standards

Provide information on opportunitiesto traders and producers

Provide better information on customsregulations, taxes, and tariffs

Improve Afghanistan's image in foreign markets

Provide finance to exporters

Implement trade agreements with other countries



Question G10: What are the most important thingsthat the government could do to promote trade?


Sixth Seventh Not selected Don't know No response


Implement trade agreements with othercountries

0.4245 0.3539 0.4983

Provide finance to exporters 0.1186 0.0777 0.177

Improve Afghanistans image in foreignmarkets

0.1111 0.0675 0.1775

Provide better information on customsregulations, taxes, and tariffs

0.0839 0.0641 0.1092

Provide information on opportunities totraders and producers

0.0581 0.0427 0.0786

Share information about product standards 0.0325 0.0162 0.064

Other 0.0061 0.0012 0.0305

N = 1327

Comments:Implementing international trade agreements was seen in in-depth interviews as an important function of the government with respect totrade as well.


32/120

0.00

0.00

0.04

0.05

0.06

0.07

0.09

0.13

0.14

0.69

0.79

0.86

0 .2 .4 .6 .8Fraction of all respondents

No response

Don't know

Russia

Tajikistan

Japan

UAE

Uzbekistan

Other

India

Iran

China

Pakistan

Respondents may provide up to three free-text answers

Question G11: Who do you think are thebiggest trading partners of Afghanistan?


Pakistan 0.862 0.8143 0.899

China 0.7884 0.7073 0.8517

Iran 0.6949 0.524 0.825India 0.1441 0.0777 0.2516

Other 0.1283 0.0949 0.1711

Uzbekistan 0.086 0.035 0.1963

UAE 0.0734 0.0354 0.1459

Japan 0.0634 0.0454 0.0878

Tajikistan 0.0528 0.0305 0.0899

Russia 0.0367 0.0204 0.0654

Dont know 0.0046 0.0016 0.013

No response 0.0038 0.0014 0.0104

N = 1327

Comments:As of 2007, Afghanistans three largest export partnerswere India (23.7%), Pakistan (22.7%), and the US (21.3%); as of 2005,Afghanistans three largest import partners were Pakistan (23.9%), theUS (11.8%), and Germany (6.8%).


33/120

Information Dissemination Questions: were also given to all respondents:


Text (SMS) messages

Public meeting / workshops

Government trade office

Printed materials in the formof booklets, brochures, leaflets

Newspapers

Other

None of the above

Posters in common places

Outside signs

Internet (websites)

Radio

Television


Respondent assigns ranks to top three options

Question I1: What form of trade and customsinformation delivery is easiest for you to access?

First Second Third

Not selected Don't know No response


Television 0.4185 0.297 0.5507

Radio 0.2838 0.2389 0.3334

Internet (websites) 0.0759 0.0444 0.1268

Outside signs 0.0718 0.0322 0.1523

Posters in common places 0.0317 0.0134 0.0728

None of the above 0.024 0.0085 0.0656

Other 0.0225 0.0049 0.0977

Newspapers 0.0195 0.0132 0.0287

Printed material in the form of booklets,brochures, and leaflets

0.0138 0.0042 0.0441

Government trade office 0.0113 0.0049 0.026

Public meeting / workshop 0.0048 0.0029 0.008

Text (SMS) messages 0.0027 0.00099 0.0073

N = 1327

Comments:Newspapers, while very few respondents first choice, were rankedin the top three by 33% of respondents, making it the third most popular medium,behind television (78%) and radio (69%).


34/120

0 .2 .4 .6 .8 1


Other

Information on getting foreign visas

Information on WTO accession and other upcoming tradeagreements in which the Afghan government is a party

Information on trade fairs and exhibits

Information on standards for goods for export

Information on foreign markets

Tariff rates for goods entering Iran,Pakistan, India, China, Uzbekistan

Tariff rates for goods coming into Afghanistan

Market price information for key imports/exportsat locations in and around Afghanistan

General information on customs procedures

General information about trade agreements



Question I2: What new trade and customs information would you liketo see in printed materials like leaflets, booklets, and brochures?


Sixth Not selected Don't know No response

Response was ranked First Estimate LowerBound

UpperBound

General information about trade agreements 0.2373 0.1866 0.2969

General information on customs procedures 0.1405 0.0971 0.199

Market price information for key imports / exports atlocation in and around Afghanistan

0.135 0.087 0.2035

Tariff rates for goods coming into Afghanistan 0.0945 0.0522 0.1649

Tariff rates for goods entering Iran, Pakistan, India, China,Uzbekistan

0.0613 0.0373 0.0993

Information on foreign markets 0.0213 0.0094 0.0475

Information on standards for goods for export 0.018 0.0069 0.0463

Information on trade fairs and exhibits 0.0176 0.0091 0.0338

Information on WTO accession and other upcoming tradeagreements in which the Afghan government is a party

0.0154 0.0086 0.0277

Information on getting foreign visas 0.0144 0.0078 0.0265

Other 0.0115 0.0045 0.0291

N = 1327

Comments:More respondents selected market price information (at any rank)than any other option.


35/120

Special Questions: were given only to those who belonged to a special grouprespondent:

0.00

0.02

0.02

0.17

0.20

0.59

0 .2 .4 .6Fraction of all special respondents

Don't Know

No Response

Other

No

Yes, only if I know her

Yes


Question S1: Would you do

business with a female trader?


Yes 0.5906 0.4959 0.6791

Yes, only if I know her 0.1971 0.0783 0.4149

No 0.1702 0.0762 0.3378

Other 0.0184 0.0075 0.0447

No response 0.0216 0.0111 0.0417

Dont know 0.0184 0.0075 0.0447

N = 473

Comments:Similarly, the majority said yes to trading with women during in-depth interviews, but it seemed that the response was more driven by whatthe interviewer was thought to be interested in hearing than theinterviewees true perception.


36/120

0.01

0.01

0.08

0.28

0.62

0.00

0.03

0.03

0.23

0.14

0.57


In

terior

Border

Don't Know

No Response

Other

No


Yes

Don't Know

No Response

Other

No


Yes


Question S1: Would you dobusiness with a female trader?



Yes 0.5709 0.4167 0.7125


No 0.2347 0.0846 0.5044

Other 0.0261 0.0088 0.0753

N = 231



Yes 0.6185 0.3997 0.7979


No 0.0788 0.0146 0.3309

Other 0.0075 0.0008 0.067

N = 242

Comments:It seems a bit counter intuitive that interior provinces have a morepositive attitude than border provinces. However, the confidence intervals arequite large, so one should be cautious with comparisons.


37/120

0.02

0.01

0.11

0.28

0.59

0.00

0.02

0.02

0.24

0.11

0.59


Doesn'ttrade

Trades

Don't Know

No Response

No

Other


Yes

Don't Know

No Response

No

Other


Yes


Question S1: Would you dobusiness with a female trader?

Traders only:


Yes 0.5926 0.4964 0.6823


No 0.2426 0.1065 0.4624

Other 0.0229 0.0066 0.0762

N = 188

Non-traders only:


Yes 0.5854 0.415 0.7375


No 0.1054 0.0488 0.2129

Other 0.0148 0.0034 0.0611

N = 276

Comments: Respondents, regardless of trading status, seem amenable to tradewith women.


38/120

0.00

0.02

0.04

0.05

0.07

0.09

0.11

0.24

0.26

0.48

0.60


None

Don't know

No response

Discouraged by government / laws

Other

Lack of capacity / interest

Lack of economic means

Family obligations

Lack of education

Discouraged by tradition / culture

Lack of security


Question S1a: What are the impedimentsto trade for women in Afghanistan?


Lack of security 0.5952 0.4965 0.6866

Discouraged by tradition / culture 0.4779 0.3378 0.6216

Lack of education 0.2648 0.1859 0.3622Family obligations 0.2379 0.1353 0.3838

Lack of economic means 0.1138 0.0663 0.1885

Lack of capacity / interest 0.0895 0.0518 0.1503

Other 0.0714 0.033 0.1479

Discouraged by government / laws 0.0499 0.0381 0.0652

No response 0.0385 0.0121 0.1164

Dont know 0.0154 0.0038 0.0603

None 0.0028 0.00042 0.0185

N = 473

Comments:Note that security is considered more of a problem than cultural andfamily restrictions.


39/120

0.04

0.02

0.94

0 .2 .4 .6 .8 1Fraction of all special respondents

No Response

No

Yes


Question S2: Do you think that international /regional trade agreements benefit Afghanistan?


Yes 0.9365 0.8345 0.9773

No 0.0217 0.0095 0.0489

No response 0.0418 0.011 0.146N = 473

Comments:The highly positive response to this question among specialrespondents follows the general pattern of positive attitudes towards trade seenamong all respondents in question G5.


40/120

0.03

0.03

0.94

0.05

0.02

0.94


In

terior

Border

No Response

No

Yes

No Response

No

Yes


Question S2: Do you think that international /regional trade agreements benefit Afghanistan?



Yes 0.9352 0.6573 0.9909

No 0.0171 0.0072 0.0405

No response 0.0476 0.0042 0.3738

N = 231



Yes 0.9383 0.8204 0.9806

No 0.0282 0.0067 0.1112

No response 0.0335 0.0132 0.082

N = 242

Comments:These positive attitudes seem to exist in both border and interiorprovinces


41/120


42/120

0 .2 .4 .6 .8 1

Fraction of all special respondents

Other

Improve access to credit

Eliminate roadside checkpoints

Build cold storageand buy cold trucks

Improve roads

Improve security


Respondent assigns ranks to top three options

Question S3: Which measures would improve the abilityto transport goods from the farmer to a foreign market?

First Second Third



UpperBound

Improve security 0.4018 0.3449 0.4614

Improve roads 0.2967 0.2062 0.4066

Build cold storage and buy cold trucks 0.1997 0.1166 0.3203

Eliminate roadside checkpoints 0.0612 0.0201 0.1718

Improve access to credit 0.0288 0.0109 0.0739

Other 0.0043 0.0014 0.0135

N = 473

Comments:Building more cold storage scored high; during in-depth interviews,many stated this would be highly beneficial to farmers.


43/120

0.00

0.01

0.03

0.09

0.18

0.32

0.83

0 .2 .4 .6 .8Fraction of all special respondents

Don't know

No response

Other

Dye makers

Sheep herders

Weavers

Brokers and businessmen


Question S4: Who benefits from the export of carpets?


Brokers and businessmen 0.826 0.724 0.8957

Weavers 0.3177 0.1719 0.5108

Sheep herders 0.1764 0.0881 0.3219Dye makers 0.0899 0.025 0.2757

Other 0.0346 0.0128 0.0904

No response 0.0118 0.0053 0.0257

Dont know 0.0036 0.00072 0.0175

N = 473

Comments:An overwhelming majority thought businessmen and brokers wouldbenefit the most, while it was expected to think every body would gain. It seemsrelative gain is considered more important than absolute gain.


44/120

0.01

0.04

0.08

0.15

0.20

0.22

0.60


Other

No response

Tax on sale of goods

Don't know

Tax on production

Tax on exports

Tax on imports


Question S5: When you hear the word tariff,what do you think it means?


Tax on imports 0.5964 0.4446 0.7317

Tax on exports 0.2236 0.1006 0.4256

Tax on production 0.1965 0.0946 0.3638Dont know 0.1544 0.0837 0.2675

Tax on sale of goods 0.0798 0.0377 0.1611

No response 0.0392 0.0223 0.0678

Other 0.0143 0.0055 0.0369

N = 473

Comments:Most respondents understood the meaning of tariffs.


45/120


Sales tariffs

Export tariffs

Production tariffs

Import tariffs

Question S6: What do you think of Afghanistan's tariffs?

Too high About right Too low Not selected

Don't know No response

Import tariff responses Estimate Lower Bound Upper Bound

Too high 0.2798 0.1515 0.4582

About right 0.0844 0.0406 0.1674

Too low 0.0654 0.0331 0.1254

Production tariff responses Estimate Lower Bound Upper Bound

Too high 0.1238 0.0555 0.2536

About right 0.0745 0.023 0.216

Too low 0.0305 0.0106 0.0843

Export tariff responses Estimate Lower Bound Upper Bound

Too high 0.0276 0.0109 0.0679

About right 0.0643 0.0159 0.2263

Too low 0.042 0.007 0.2145

Sales tariff responses Estimate Lower Bound Upper Bound

Too high 0.0227 0.0095 0.0534

About right 0.0144 0.0057 0.0359

Too low 0.0017 0.00015 0.0186

N = 473

Comments:People generally thought that tariffs on raw materials used fordomestic production are high, but the average of import tariffs are lower in theregion.


46/120

0.01

0.01

0.03

0.03

0.06

0.07

0.07

0.17

0.56

0 .2 .4 .6Fraction among special respondents providing any answer

Other positive experience

The department operates well

The department is improving

Problems with inadequate facilities / equipment

Tariffs are too high

Problems with staff knowledge / professionalism

Processes are slow / inefficient

Other negative experience

Problems with corruption and illegal activity

Respondents may provide one free-text answer

Question S7: What have you experienced or heard /about the work of the Afghan Customs Department?


UpperBound

Problems with corruption and illegal activity 0.5574 0.418 0.6883

Other negative experience 0.1676 0.1007 0.2659

Processes are slow / inefficient 0.07 0.0283 0.1629

Problems with staff knowledge / professionalism 0.0676 0.028 0.1542

Tariffs are too high 0.0553 0.0224 0.1301

Problems with inadequate facilities / equipment 0.0333 0.0158 0.0686

The department is improving 0.0261 0.0099 0.067

The department operates well 0.0143 0.0058 0.0349

Other positive experience 0.0084 0.0026 0.0273

N = 267

Comments:The graph and table above excludes respondents who did notprovide an answer or reported no knowledge of the Customs Department.


47/120

0.020.02

0.030.04

0.05

0.050.12

0.22

0.44

0.010.020.02

0.030.06

0.080.12

0.66

0 .2 .4 .6 .8Fraction among special respondents providing any answe

Interior

Border

Other positive experienceThe department operates well

The department is improvingProblems with inadequate facilities / equipment

Tariffs are too high

Problems with staff knowledge / professionalismProcesses are slow / inefficient

Other negative experience


Other positive experience

The department operates wellProblems with inadequate facilities / equipment

The department is improving

Processes are slow / inefficientTariffs are too high

Problems with staff knowledge / professionalismOther negative experience



Question S7: What have you experienced or heard /about the work of the Afghan Customs Department?



Problems with corruption 0.6527 0.4198 0.8355

N = 125



Problems with corruption 0.4389 0.3788 0.5007

N = 142

Comments:This decomposition by province location suggests that border

residents experience or perceive greater levels of Custom Department corruptionand illegal activity.


48/120


Other

Not enough customs officers

Staff behavior toward citizens and visitors

Knowledge of customs officers

Lack of information on custom duties and procedures

Low professional qualifications for staff

The process for handling complaints and appeals

Speed at moving goods through customs

The amount of fees paid at customs

Lack of service counter or person in tax offices

Poor facilities

Queue lines

Slowness at clearing goods

Respondent assigns a score to each of the options

Question S8: In your opinion, how large a problem iseach of the following in the Afghan Customs Department?

5 - Major problem 4 3 2

1 - Minor problem Not a problem Don't know No response

Response was rated Major problem Estimate LowerBound

UpperBound

Slowness at clearing goods 0.3246 0.2498 0.4095

Queue lines 0.3198 0.1721 0.5152

Poor facilities 0.2985 0.2105 0.4046

Lack of service counter or person in tax offices 0.2963 0.1463 0.5085

The amount of fees paid at customs 0.2906 0.1276 0.5344

Speed at moving goods through customs 0.2865 0.1973 0.396

The process for handling complaints and appeals 0.2812 0.1929 0.3903

Low professional qualifications for staff 0.2374 0.1621 0.3337

Lack of information on custom duties and procedures 0.2166 0.1322 0.3341

Knowledge of customs officers 0.1931 0.1466 0.2501

Staff behavior toward citizens and visitors 0.1484 0.0978 0.2187

Not enough customs officers 0.1359 0.0883 0.2034

Other 0.0223 0.0091 0.0535

N = 473

Comments:on average everything is scored the same way, except for thenumber of customs personal which was relatively not considered to be an issue.


49/120

0 .2 .4 .6 .8 1

Fraction of all special respondents

Other

Contact a localgovernment official

Contact EPAA or AfghanCustoms Department

Contact the local Chamber of Commerceor local business association

Talk to a successful exporter



Question S9: What steps would you take toexport goods for the first time?




UpperBound

Talk to a successful exporter 0.6348 0.5084 0.745

Contact the local Chamber of Commerce or local business association 0.1756 0.0976 0.2955

Contact EPAA or Afghan Customs Department 0.077 0.0433 0.1335

Contact a local government official 0.0636 0.0312 0.1253

Other 0.0173 0.0044 0.0656

N = 473

Comments:Contacting government officials was one of the least preferredchoices.


50/120

0.01

0.03

0.05

0.06

0.19

0.29

0.40

0.44

0.44


Other

Don't know

None needed

No response

The government

The visa process

Details on trade agreements

The customs process

Transport opportunities


Question S10: What export-related informationwould be most useful to your work?


Transport opportunities 0.4421 0.2813 0.616

The customs process 0.4352 0.2864 0.5967

Details on trade agreements 0.402 0.2928 0.5219

The visa process 0.2887 0.1583 0.467

The government 0.1947 0.1125 0.3154

No response 0.0647 0.0297 0.1352

None needed 0.0475 0.0176 0.1216

Dont know 0.0289 0.0092 0.0869

Other 0.0083 0.0036 0.0194

N = 473

Comments:Details of trade agreements were considered one of the areaswhere people thought they need more information.


51/120

0.06

0.46

0.47

0 .1 .2 .3 .4 .5Fraction of all special respondents

No Response

No

Yes


Question S11-1: Do you know the term:World Trade Organization (WTO)


Yes 0.4726 0.3579 0.5902

No 0.4628 0.3326 0.5983

No response 0.0646 0.0228 0.1696

N = 473

Comments:For an outreach campaign, it would be worth reiterating the namesof important organizations in trade for familiarity.


52/120

0.09

0.33

0.58

0.05

0.56

0.40


In

terior

Border

No Response

No

Yes

No Response

No

Yes


Question S11-1: Do you know the term:World Trade Organization (WTO)



Yes 0.3953 0.227 0.5926

No 0.5574 0.3736 0.7268

No response 0.0473 0.0108 0.1848

N = 231



Yes 0.5821 0.4587 0.6961

No 0.3287 0.2794 0.3822

No response 0.0892 0.0184 0.3384

N = 242

Comments:While, on average, residents of interior provinces are more likely toknow about the WTO, there is great variation across border provinces. Forexample, in Kandahar, a border province, 87.5% of respondents were familiarwith the term, while in another border province, Jalalabad, only 28.7% knew theterm.


53/120

0.07

0.66

0.27


No Response

No

Yes


Question S11-2: Do you know the term:South Asian Free Trade Area (SAFTA)


Yes 0.2717 0.2064 0.3485

No 0.6609 0.5655 0.7448

No response 0.0674 0.0232 0.1807

N = 473

Comments:SAFTA is known less than WTO


54/120

0.07

0.56

0.37


No Response

No

Yes


Question S11-3: Do you know the term: AfghanistanPakistan Transit and Transport Agreement (APTTA)


Yes 0.3733 0.2144 0.5653

No 0.5593 0.4191 0.6906

No response 0.0674 0.0232 0.1807

N = 473

Comments:Even APTTA is known more than SAFTA


55/120

0.09

0.68

0.23

0.04

0.44

0.52


Does

n'ttrade

Trades

No Response

No

Yes

No Response

No

Yes


Question S11-3: Do you know the term: AfghanistanPakistan Transit and Transport Agreement (APTTA)

Traders only:


Yes 0.5237 0.2989 0.7392

No 0.4386 0.2528 0.6433

No response 0.0378 0.0106 0.1263

N = 231

Non-traders only:


Yes 0.227 0.162 0.3085

No 0.6812 0.6137 0.7419

No response 0.0917 0.0356 0.2164

N = 242

Comments:The APTTA is relatively well-known to traders compared to non-traders.


56/120

Transcript of Deep Interviews

Interview with Mr. Sayed Mubin Shah, the current deputy minister of finance

for customs and revenue affairs:

Q 1: What government policies can improve trade in Afghanistan?

A 1: Trade plays very important role in economic development of a country.The theories given by Adam Smith to Ricardo, all the theories of comparativeadvantage to absolute advantage and opportunity, it is important that we shouldhave trade facilities. Trade facilities in Afghanistan have faced tariff and non-tariff barriers. We have had really good achievements in the past few years. Forexample, our tariff system was really disorganized, but now our tariff system isthe lowest in the region, which is good. I am not saying that we have doneeverything we could and there is nothing to be done anymore, I mean that we

need to institutionalize tariff policies. For example, if a trader comes to us andsays that the tariffs are high and we need lower tariffs, someone else may comeand say that tariffs are low and we want the government to increase them.Manufacturers and producers want the tariff to be increased. That makes our jobin setting tariffs difficult. We dont have the manpower or the skill to performresearch on the best action; we are trying to employ professional people for this.

Our other achievement was improvement of procedures. During the past years, wewere able to decrease the number of procedures with the help of our friends. Idont know the number, but in comparison with the last decade, we havedecreased the procedures. When a trader comes, a T1 is given to him in a few

minutes and then he is done. We have made it automatic.

The problems that we have are in non-tariff barriers. In customs regions, we havedifferent offices. We want to establish border management and a single windowso we could provide more facilities to traders. Single window means that whentrucks come in, we will have border police, National security, Ministry of health,Ministry of commerce and other ministries, together at one point. When the truckcomes in, it will be measured on a scale and scanner. All the representatives fromthese ministries will be in one room and when the trader comes in with paperworkand all the data are entered in the computer, all the representatives will be there tosee and check, and then they can provide the certificates and paperwork in a

computerized form. We suffer funding problems for this idea though.

We dont have laboratories yet but we have some limited funds to establishlaboratories in some places. Laboratory funds are needed for infrastructuredevelopment of a single window concept. We are thinking how to approachdonors to pay for these. We are getting cost estimates for construction,technology, capacity building, and implementation needs. These estimates are thefirst thing that we need. I have already prepared the policy concept so Karzaicould approve it.


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Other problems are the transit routes; there are checkpoints which take moneyfrom traders. In provinces, municipalities and others get money from traders fordifferent reasons. If you go to Pul-e-Charkhi, you will see that they chargemoney; I dont know where that money goes to: does it go to the government or is

it going to a private pocket?

The other problem that our traders face is with the tax system, so we distributedthe tax payers to three categories.

1. Large Taxpayer2. Medium Taxpayer3. Small Taxpayer

We need established offices in Kabul and we have established LTO in some provinces like Herat and Mazar-e-Sharif and we are almost done with its

establishment in Jalalabad. We have MTO and STO in four provinces and LTO inone. We call it self assessment, so it could help traders. A trader would come;they would say their income, expenses, net income and this would be the basis fortheir tax. They pay their tax and we acknowledge receipt. Because our tradersdont know the law, its hard for them at the beginning. Just to make sure thatthey dont lie, we have review procedures, a committee sits and checks to see ifeverything is correct. Our income department employees are very professional,they have graduate degrees. At the same time we have problems too, I am notsaying that we dont have problems. If reviewers check a questionable file, thenthe client is introduced to the review committee. When introduced to the reviewcommittee, over 50% of the files are in violation of the law. Thats why, we thinkthat taxpayers are trying to keep the tax law in mind, and compliance hasincreased. Every department has its own special guidelines. The trader calculatesthe tax himself. We give the form and our customer service will guide them.(Idrees) So far the traders that I have interviewed have said that its very

complicated. For example its in three languages.

You should take a look at it. We will take your suggestions. Our technical taxteam will have meetings with traders where we will take their suggestions too.(Idrees) Whom should I follow up with? You can follow up with me (Eftekhar,director of taxes and revenue department).

There are some other things which can help to facilitate more trade. We want toopen doors to trade in the region and we become member of ECHO or any otherregional forum. We have signed over 40 bilateral agreements with neighborcountries in different sectors.

Q 2: Is there an average transit for how long it takes goods to get from oneborder to another?

A 2: You should do that calculation; we dont have it at the moment. Ourproblem at the moment is we dont have a lot of control over traders. Traders have


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a free hand at the moment; by having some restrictions on traders, we can reducetraders bringing goods into markets, yet not paying taxes. In most of the cases, outdynamic systems can tell us how many trucks have crossed Torkham or IslamQala and what customs are they going towards. For example, last month, therewas a truck that was supposed to pay taxes in Kabul customs but they were lost on

the way to Kabul and they never paid it. SCODA gives us the calculation, whichwe only use for implementation purposes; there is no report for it. For example,yesterday a trader came to get his tax clearance. When he comes back to see if heis clear, it will be checked in SCODA, and our employees will know that he hasimported many trucks but they havent gone through customs. We had a few casesof this yesterday; traders want to run away from taxes. In order to increase theirprofits they are happy with the disorganization.(Idrees) Understanding tax systems is difficult in the entire world. I agree thatthere is problem; we need funds for a tax awareness dimension. We have a taxcalculation manual, Income tax law, and guide form 08, which explainseverything in three languages.

Q 3: Ignoring all the government related problems for a second, what are somereasons that Afghans do not trade more now a days? It seems like people arechanging sectors, but not so much towards trade. In your opinion, what are thereasons?

A 3: I am not sure about the percentages, but I think trade during the war yearsin comparison with trade in the previous year might have decreased, but in currentconditions, you should compare the number of factories now with the past years.Then you should check the percentage and you will find it to be more.

(Eftekhar) There are only 30,000 companies in Kabul. I am sorry, but I disagreewith this question because only 400,000 Afghans work for the government. Andthe same number might work for NGOs and the private sector. The rest of thepeople are all busy in trade, not specifically very high level trade but somethinglike shop keeping or taking something from here to sell in Pakistan, these kinds ofthings.

Most of the people we know, when they have returned from Pakistan, they are notinterested in owning a farm or working in an office, they are interested in having aprivate business or trade. A good example is you. (Idrees) I meant internationaltrade not retail and small business.

There is international trade. Invisible trade is very common in Afghanistan.Someone goes to Pakistan and brings goods worth 10,000 Afghanis back and sellsit in Afghanistan, which increases their money.

Q 4: In your opinion, high or low tariffs are good? Whats the general policyposition?

A 4: General policy position is that tariffs will change but based on the situationand condition. We will go towards WTO. We have bilateral agreements, but there


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is dumping going on. I dont know how many sensitive items we have; we didnttalk about sensitive items in transit agreements.

Q 5: What would be the best evidence of accountability of government towardscustoms and trade in general? For example, publishing figures would show more

transparency or punishment of staff who are involved in wrong doing. Do youhave any thoughts about what might be the best indicators of governmentsaccountability and transparency?

A 5: Reform in every administration is based on four things:

1- Administration consists of human resources. In Afghanistan, first therecruitment process should be reformed. At the moment we can see thatrecruitment process for all government offices, not only Customs, iswrong. Even the standards the conventional system requires is not enough.I am against the definition of capacity, as its defined solely as knowledge,

experience, and skill. But you tell me, if someone is a doctor like you,does having experience and skill but not having commitment, will that person be useful to me? Thats why, there is something else beside thisdefinition of capacity.

2- The reason that we cant improve human resources is that we dont havean incentive system. There is someone who is hungry, he steals but hedoesnt know. If you are a court, what would you suggest? Three thingsare necessary for this person. 1-Education is needed, 2- a reminder thatlaws should be followed, and 3- the person must be fed because he ishungry. An economic, academic, and legal solution. These three solutionsare needed. But how are you going to implement them? We should findsome food first, which is an economic solution. The hungry person wontlisten to you; even if he does he is not going to understand you. Once youhave fed them, then educate them. After education, warn them that if ithappens again, we are going to punish you. Capacity building is part of ittoo, we are trying to make it more transparent. We have created a customsacademy and classes where we send our employees to learn. Our newslogan is that Our financial independence is our political independence,lets take part in political independence of Afghanistan. This is to createmoral.

3- The third base of management is procedures. Procedures includefunctions, management actions, and time management commitment todecrease non-tariff barriers. These are ongoing.

4- The fourth base is structure, we have a problem in the structure ofadministration. We are hoping that we will be able to make it better.Management style is not good. When we do good no one appreciates it,but if something goes wrong, then the whole world finds out about it. Forexample, the media never talks about our new building or our newprocedures; it never covers the new professional staff that we hire, but as


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soon as a bomb explodes, then the only thing which is covered is thatbombing. Everyone in the U.S. and in the rest of world thinks that the onlything which happens in Afghanistan are bomb blasts, and nothing else.

Q 6: According to the definition of capacity building which includes

commitment, what percent of those staff do you think are committed in customs?

A 6: We might have a good percentage. I cant say specifically, I want to do asurvey in this regard myself. Regarding commitment, when the last person cameto join customs, I made him take an oath on the Quran, so that he wouldntcommit anything against the law, and if he does, then hell accept theconsequences.

Q 7: For checking the procedure, do you have independent observation? Do youget any reports outside regular chains of command?

A 7: We dont have a very well organized channel. We had planned to hire aforeigner and an Afghan. Theyd use a form that would be given to randomlyselected people, who would fill it out in different provinces. Then the evaluationwould be done systematically. For example, we have a planning department butdont have safety. We would love to be evaluated by people, and tell us about ourweaknesses. We would prefer to have a system from the beginning to prevent thisrather than being told by someone, but again, its good if people tell us about ourweaknesses.(Eftekhar) Its really easy for us to calculate revenue. For example, we cancompare before streamline procedures what was our revenue, and how much wehad processed. And then we can compare the this years revenue with last years,as well as the number of forms. We take the feedback ourselves. (Idrees) But theproblem is that all policies have side effects and positive effects. And improving

procedures for increasing revenue decreases the efficiency because it angers

everyone for making it too complicated. Earlier, the deputy said that to achieve

that optimal level, you need revenue but also fairly simple procedures. I think,

someone who is hired internally it would be hard for them to criticize, because

there is no incentive for them to be critical, especially if they are subordinates.

(Eftekhar) When we make the procedures, we keep in mind 80% of peoplesproblems.

Q 8: In your opinion, what information is really important to be given to tradersand how can we get this information to them?

A 8: All information is available on the internet, through TV commercials, andnews publications too. We use all our facilities; its not enough though, we needfunds. We gather the money but we are not allowed to spend it. Usually, the maindistribution source is the internet. We are trying to make tax awareness a keyissue. We are trying to work with Ministry of Commerce and Industries, so theycould provide these programs too. We will provide them with the tax guide orother important information, then they could provide trainings, because the


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Chamber of Commerce is to serve the traders. We can send our people to trainChamber of Commerce if they dont know tax information either.

(Eftekhar) Information about large and medium taxpayers: both are available onthe internet. For small taxpayers we dont worry as much because they have a

union, which is known as the Afghanistan Craftsmen Union. Well meet withthem to tell them about the new information. (Idrees) They are not saying thatinformation is not available; they are saying that its not digestible, but it was just

a comment.

Q 9: Do you think trade is a good job for women in Afghanistan?

A 9: Why not, there is no problem. Afghanistan is an Islamic country, BibiKhadeeja was one of the Muslim women who did trade, and Afghan women canfollow her too. Women dont have to travel themselves, they can send one of theiremployees or they can also travel with their husband or brother.

Q 10: Will increasing trade result in an increase in employment?

Q 10: We have partial equilibrium and general equilibrium in economics. Indifferent conditions, people have different needs, and based on that it is judgedwhether utility and productions are maximized. You have to first find a partialequilibrium, and then general equilibrium and stability can follow. Then you cansay if trade is good or not.

Given money market supply data, one can calculate an answer. At the same time,if you think that home production might employ 100 people, but importing thesame thing from outside, we might have 50 people indirectly employed. Thisneeds studying as import substitution can have a negative impact on the goodswhich were produced here. In that case, it means that trade is not good foremployment.

Interview with Mr. Qurban Haqjo, the current head of Afghanistans chamber

of commerce:

Q 1: What government policies could improve trade in Afghanistan?

A 1: We have to increase the quality of our products in accordance with marketstandards. This increase in quality will include the quality of goods themselves, its packaging, and getting them quickly to the market. Its important for our freshand dry fruits to meet the requirements of quality certification. Second thing, weshould have speedy air and road transportation facilities with low prices so ourgoods can compete with similar foreign products. This includes paved roads,elimination of check points, improvement of airports, and the establishment of awell-equipped cargo system.

Another thing is marketing for Afghan products by having conferences, exhibits,and match making events in countries where Afghan products have markets, such


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as Europe, the U.S., the Middle East, and in our region. Afghanistan economiccapabilities and Afghan products should be demonstrated in these countries so wecan develop better markets.

Security is important. Without security you cant define you supply and demand.

Without security, the government cant define its expenses. Risk of fire and theftby Taliban is high.

Second thing is policy. Government shouldnt act as a competitor but should actas a policymaker and a facilitator in the market. Today in trade, government getsmoney from traders for no reason. Government should have an agenda; it shouldknow of economic growth opportunities, how to best use current resources, andhow it can provide growth opportunities for a sector. Government is missing thesethings today. Lack of a transparent economic policy is another problem. Currentlyits not transparent at all. Its very complicated. Tax laws should be so simple thatpeople should know how much they have to pay, but its too complicated at the

moment. There are different kinds of taxes, with different rates: how to pay, whento pay everything is very complicated. Even the procedures are complicated.

Tax forms are in three languages, which itself creates confusion. There is nocompany in Afghanistan which could meet the demands of the tax forms. All thedata on those forms have been copy and pasted from other countries like the U.S.Its exactly why a trader is ready to pay a bribe, he wants to be done with it. Its agreat source of corruption.

Its not important to have high or low tariff, existence of a good policy isimportant. First, self sufficiency of Afghanistan in areas where it has competitiveadvantage should be a priority. Second is a capability of people. A person with5000 AFS salary from government has 5000 capability to spend, and he cantspend more than that.

Thirds, we should study comparison tariffs of our partner countries. We shouldstudy what Pakistan does. Whats their trade policy with Afghanistan? With thenew agreement, Afghanistan wont be able to import goods from India. In thefuture there might some changes. But its good that our trucks can go to the ports.

Government should provide cooler storage facilities. Today, medicine or othergoods are imported as samples first to be checked in Ministry of Public Health.These samples stay in Ministry labs for days. These labs should be in everycustoms department, which would help quite a bit. Roads, trains, electricity

final tafa survey report 2010

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