Afghanistan – solving the unemployment crisis

Thursday, 19 February 2015 17:20 GMT

* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

Each year 400,000 graduates enter the Afghan labour market. They face fierce competition for jobs, partly because Afghanistan has one of the world’s fastest growing and youngest populations in the world – 40% of the population is aged 15 – 24 years  but also because the economy is shrinking.

The hot topic in every home and café is: what future will there be for our children? There is evidence that we ignore unemployment at our peril.  A report by the African Development Bank in 2013 found that there is a significant association between youth unemployment in developing countries and an increase in the risk of political instability

What is causing youth unemployment?

Our population is increasing at a time when the economy is forecast to shrink as international aid and foreign investment withdraw, taking with them not just the finance that has propped up our economy for a decade but also the jobs they created.

The population ‘bulge’ is a serious challenge for Afghanistan. The 400,000 graduates who enter the formal jobs market annually are just the tip of the iceberg. Our economy is dominated by the informal sector, which accounts for 80 – 90% of total economic activity and the rural economy where the majority of the population live.

On the plus side the World Bank believes agriculture, along with mining, and services could be key drivers of economic growth in the future. However, large scale mining and services are unlikely to create the jobs needed. Therefore it is up to the development sector to focus on job creation.

How micro-businesses can help

NGOs like Hand in Hand and the Aga Khan Development Network are already leading the way by providing the entrepreneurial training that people need to start micro-businesses so that individuals can create their own sustainable jobs and incomes.

You might say that such micro-businesses are too small to make a difference. But, in my experience they form the backbone of communities and transform lives. It means people are able to feed themselves from their own land, they have more money and so living conditions are better and they can send their children to school instead of work, for example.

Take Feroza, aged 22, from northern Afghanistan. Like many young people she lives in a remote village where there is no hope of finding regular paid work. She was managing to scratch a living as a seamstress but without any idea of ‘business’, the future looked grim. However, with some basic business training on pricing, profit and loss and marketing her ‘odd jobbing’ as a seamstress became a flourishing micro-business; she quadrupled her income to $68 per month and today employs three of her neighbours.

What difficulties do micro-businesses face?

The potential impact of programs like this is significant. But in order to succeed Afghan farmers, many of whom are women, need access to training and finance. After decades of war many do not have the basic business skills needed to enable enterprises such as bookkeeping, stocktaking or marketing to flourish. Further, access to much needed loans is limited because microfinance faces the religious hurdle of Islamic law, which prohibits the payment or acceptance of interest fees.

What does this mean for global professionals?

Firstly, hire local staff who understand local cultural and religious customs. For example, our Afghan staff understand that to reach the women we must engage the men. In practice this means we begin by first encouraging the men to form savings groups. We are then able to secure their support for the women to form their own savings groups. As a result our female participation rate is 70% (the Afghan government’s target is  30-35% female participation for aid projects).

The next step is to instigate grassroots entrepreneurial training which, I believe, NGOs are perfectly positioned to.

Secondly, we should leapfrog by adapting training templates and business concepts that have worked in other parts of the global South. For example, we successfully imported our own four step training program from India and have found the One District One Product program, already widely used in Africa, to be an effective model for business creation in Afghanistan.

Thus global development professionals can begin to build a better future for my country – by supporting  self-employment as a means of creating livelihood opportunities for the poor. With the right policies in place and the expertise of development professionals, the self-employed can earn their way up and out of poverty.