World Bank2012-06-192012-06-192005-12https://hdl.handle.net/10986/8484In a post-conflict environment, attracting new foreign and domestic firms is central to private sector development. Existing firms at the end of sustained conflict are typically state-owned, are highly undercapitalized, have weak or nonexistent management, have a deskilled and underemployed labor force, and are in need of significant new capital investment. As is the case in any business environment, particularly in post-conflict countries, new investment decisions (into existing or new firms) usually depend on the availability of five basic factors: political and economic stability and security, clear unambiguous regulations, reasonable tax rates that are equitably enforced, access to finance and infrastructure, and an appropriately skilled workforce. In Afghanistan, these conditions are lacking. This report has been prepared to assist the government of Afghanistan to address its private sector development challenges. It acknowledges the achievements that have been accomplished since the fall of the Taliban regime, and it highlights both the investments that have taken place and the opportunities that remain to be captured. More important, it reviews the constraints that firms currently operating in Afghanistan face and makes policy recommendations on how these constraints can be addressed. In addition to a survey of 338 firms, the study makes reference to the numerous studies on the private sector that have been conducted recently.en-USCC BY 3.0 IGOACCOUNTABILITYACCOUNTINGAIRANTICOMPETITIVE PRACTICESAVERAGE CAPACITYAVERAGE CAPACITY UTILIZATIONBANKING LAWSBANKING SECTORBANKING SERVICESBANKING SYSTEMBASIC SERVICESBRIDGEBUSINESS ENVIRONMENTCAPITAL INVESTMENTCAPITAL STOCKCARRIERSCENTRAL ASIANCIVIL SERVICECOMMERCIAL CREDITCOMPANYCOST OF TRANSPORTCOSTS OF SERVICECOSTS OF SERVICE PROVISIONCREDIT RATINGCREDIT RATING AGENCIESCREDIT UNIONSCUSTOMSCUSTOMS ADMINISTRATIONCUSTOMS CLEARANCECUSTOMS DEPARTMENTCUSTOMS MODERNIZATIONCUSTOMS OFFICIALSCUSTOMS TARIFFSDEBTDISPUTE RESOLUTIONDOMESTIC FIRMSDOMESTIC INVESTMENTDOMESTIC MARKETECONOMIC GROWTHECONOMIC STABILITYEMPLOYMENTENTERPRISE REFORMEXPANSIONFACTORINGFINANCIAL LEASINGFINANCIAL SECTORFINANCIAL SERVICESFINANCIAL SYSTEMFIRMSFOREIGN COMPANIESFOREIGN DIRECT INVESTMENTFOREIGN INVESTMENTFOREIGN INVESTORSFOREIGN MARKETSFOREIGN TRADEFREIGHTGROSS PROFITHIGHWAYSIMPORTED INPUTSINDUSTRIAL ENTERPRISESINFLATIONINSPECTIONINSURANCEINTERNATIONAL COMMUNITYINVESTMENT ACTIVITYINVESTMENT CLIMATEINVESTMENT CLIMATE ASSESSMENTINVESTMENT CLIMATE CONSTRAINTSINVESTMENT DECISIONSINVESTMENT GROWTHINVESTMENT PROGRAMLABOR FORCELABOR PRODUCTIVITYLEGAL FRAMEWORKLEGAL SYSTEMSLEGISLATIONLOCAL FIRMSLOCAL MARKETMANUFACTURERSMEDIUM ENTERPRISESMICROENTERPRISESMICROFINANCEMICROFINANCE INSTITUTIONMICROFINANCE INSTITUTIONSMICROFINANCE SECTORNEIGHBORING COUNTRIESNEW ENTRANTSNONBANK FINANCIAL INSTITUTIONSNONGOVERNMENTAL ORGANIZATIONSOPEN ECONOMIESPATRONAGEPOLICEPOLICY BARRIERSPREFERENTIAL TRADEPREFERENTIAL TRADE ARRANGEMENTSPRIVATE COMMERCIAL BANKSPRIVATE FIRMSPRIVATE INVESTMENTPRIVATE SECTORPRIVATE SECTOR ACTIVITYPRIVATE SECTOR DEVELOPMENTPRIVATE SECTOR INVESTMENTPRIVATE SECTOR PLAYERSPRIVATE TRANSPORTPRIVATIZATIONPRIVATIZATION POLICYPRODUCTIVITYPROPERTY RIGHTSPROVISION OF INFRASTRUCTUREPUBLIC INVESTMENTPUBLIC POLICYPUBLIC UTILITIESPUBLIC-PRIVATE PARTNERSHIPSRAILROADSRATING AGENCIESREDUCING UNCERTAINTYREGULATORY FRAMEWORKREGULATORY ISSUESREMOVING BARRIERSRING ROADRISKY INVESTMENTROADROAD NETWORKROADSSAVINGSSMESTATEMENTSUB-SAHARAN AFRICATARIFF STRUCTURETARIFF STRUCTURESTAXTAX ADMINISTRATIONTAX BASETAX INCENTIVESTAX POLICYTAX RATESTAX REFORMTRADE AGREEMENTSTRADE CREDITTRADE FACILITATIONTRADE FACILITATION SERVICESTRADE POLICYTRADE REFORMTRADERSTRANSACTIONS COSTSTRANSPORTTRANSPORT AGREEMENTSTRANSPORT COMPANIESTRANSPORT NETWORKTRANSPORT SECTORTRANSPORT SERVICETRAVEL TIMESVEHICLEWORLD TRADEWorld Bank10.1596/8484