International Business Term Paper

Afghanistan

Environmental Analysis

Demographic and Economic Developments and Trends

Economically speaking, Afghanistan is one of the poorest countries in the world. Over the past two decades, the economy has seen widespread destruction from war. However, over the past few years the economic outlook has improved significantly because of the infusion of over $2 billion in international assistance.

• Provided that the security situation improves and international support maintains, the Afghanistan economy will continue to move forward.

• Democracy will enable the establishment of a free market.

• There has been a dramatic boost in business opportunities as a result of reconstruction activities such as recent highway development.

Major changes in the Business Community

Afghanistan is unique in that their Business Community is being completely rebuilt. In many industries, including ours, there is no activity in this country. As international efforts restore Afghanistan, we will be able to witness the start of a brand new Business Community.

New Legislation

Afghanistan had a new constitution drafted on January 16th, 2004

• Actual legislative branch was nonfunctioning as of January 2004.

• Government is empowered by the constitution until the new assembly is seated.

o Elections scheduled for Spring 2005.

• New constitution establishes a nine-member Stera Mahkama or Supreme Court.

Source of Employees

There is no updated unemployment rate information available.

• Labor force is made up of 11.8 million people.

• Most of the country would work if there were jobs to obtain.

Population Information

These figures on the population of Afghanistan are estimates, and they were calculated in 2004. A comprehensive census has not been taken in this country since 1979.

• Population: 28,513,677

• Number of Households: Unknown

• Level of Education:

o Only 36% of the population is literate.

 51% of men are literate.

 36% of women are literate.

o In 2003 approximately 4 million children were enrolled in school.

• Household Income: $300 a year

• Age:

o 0-14 years: 44.7% (male 6,525,929; female 6,222,497)

o 15-64 years: 52.9% (male 7,733,707; female 7,346,226)

o 65 years and over: 2.4% (male 334,427; female 350,891)

Important Trends

Due to the recent war and conflicts in this county, Afghanistan has drastically changed over the last few years.

• New Constitution adopted on January 4, 2004.

• Parliamentary and local elections are planned for the spring of 2005.

• Afghanistan reestablished normal trade relations in June of 2002; the U.S. had revoked their Most-Favored Nation Status in 1986.

• Reconstruction in the country is moving forward due to the recent completion of major highways by foreign workers from Japan and the U.S.

• The U.S. government is actively assisting the people of Afghanistan to:

o Create a democracy.

o Ensure “market friendliness.”

o Ensure regional stability.

Legal System

Historically, religious traditions and codes have provided the principle means for settling legal disputes in Afghanistan. In fact, their newly adopted Constitution requires that no law be “contrary to Islam.” This means that Afghanistan has a theocratic legal system. Their Constitution also requires that the new state of