Safi Ahmad Jamshid
Undergraduate
MBA
Eurasian National University named after
L.N. Gumilev's Astana ñ., Kazakhstan
NECESSITY TO IMPROVE STRATEGIC MANGEMENT
OF STANDARDIZATION IN AFGHANISTAN
Following
the 2001 intervention of the International Alliance and the subsequent fall of
the Taliban regime, Afghanistan
faced the immense
challenge of building
a functioning institutional framework
with the support
of the international
community. Beyond the important focus
on the establishment of political institutions, a part of these efforts,
largely supported by the World Bank, were placed on establishing a favorable
environment for the development of a market economy in Afghanistan.
Yet,
in this area, the country faces many obstacles and, more than ten years after
the end of the Taliban regime, Afghanistan's private sector remains extremely
fragile and dependent on international assistance. Three decades of conflict have significantly impacted the
entire productive and business apparel, leaving Afghanistan with a very
important trade deficit and a
private sector that
is unable to
compete with its
main neighbors. Economy will be a necessary basis for the
future of the country, especially once the 2014 transition is achieved. A 2011
World Bank report raised the flag on the harsh difficulties that the Afghan
economy is likely to face following the 2014 political and security transition [1].
In 2012
the conditions for
doing business are
still among the
worst in the
world, with Afghanistan being
ranked 160 out
of 183 countries in the
Doing Business 2012
ranking. Among the obstacles
faced by private
actors in the
development of their
business come regularly the same
three major challenges: security, corruption and lack of electricity [2].
Yet,
beyond these obvious issues, private-sector actors also long
for a sound business
environment based on clear – and respected – regulatory frameworks and
guidelines. Among them, the development
of national standards
and of an adequate National
Quality Infrastructure is crucial. In this respect, the establishment in
2004 of the Afghan National Standards Authority (ANSA) was a very promising
step. Initially under the authority of the Afghan Ministry of Commerce and
Industry (MoCI), ANSA was declared independent in 2007. This was followed by an
important effort at capacity building within ANSA, supported by the World Bank
Emergency Custom Modernization and Trade Facilitation Project. A National Standard Law was drafted and
enacted in 2010. It served as the basis of the progressive development of
national standards in Afghanistan. As of 2012, ANSA has developed 125 standards
officially approved by the Supreme Council of Standards, established in
December 2010. These are encouraging achievements; but the task of building a
complete and efficient quality infrastructure out of nothing is immense and
requires time. ANSA therefore still has a series of steps to undertake
to reach an
operational level in
country. The 2011-2015 strategy exposes some of these
main steps, but the implementation of national standards whilst on paper, is
very slow at being functional in real time.
In
order to identify the priorities for the implementation of national standards
in the country, it is necessary to have a look
awareness and usage of standards
in the country so far
for each kind
of standards: available,
national, foreign and international.
According
to conducted survey by UNDIO found that 47.8% of surveyed respondents declared
being aware of the existence of national standards, while 52.2% of respondents
were not. This figure is surprisingly high if compared with the very low level
of awareness of businessmen about ANSA. Some disparities between sectors
appeared in the
level of awareness
about national standards:
the level of awareness of the production sector
is lower than in
the rest of
the private sector, with 'only' 39.6%
of respondents declaring
that they are aware about the
existence of national standards.
On the other hand,
the level of awareness
in the trade, service
and construction sectors
about national standards is
higher. These differences may be linked to the different socio-economic
profiles of private actors in these different sectors. It appears that
respondents from the
production sector showed
a lower access
to literacy and
school education than in other sectors with 14% of respondents
illiterate or literate without having attended school as opposed to 6.1% in the
trading sector and 3.6% in the construction sector. Managers in the production
sector are also characterized by a reduced access to university as compared to
other sectors, with 18.9% of respondents having attended university as against
almost 30% for traders and service providers.
This lower awareness about standards in the production sector might also
be linked to the fact that a lot of production units in Afghanistan are small-size
and rely on traditional techniques while the service sectors is more recent and
more capable of modernizing itself and staying aware of innovations and
regulations. It is also a direct result
of the lack of provincial
outreach of ANSA, which action is
concentrated in Kabul. As this
study showed that 58% of Afghan SMEs' market did not go beyond provincial
borders, there is a discrepancy between the landscape of the private sector and
ANSA's coverage, explaining the lack of awareness about standards. Between various
sub-sectors, the level
of awareness of
private actors notably
follows the path of
standard development followed
by ANSA. While four out of five
managers of companies working in the petroleum sector were aware of the
existence of standards, 56.5% of respondents working in the construction sector
and 55.6% of respondents from the food and beverage sector declared being aware
of the existence of standards, it was only the case for 23.8%
in the metallurgical sector and
only for 1
out of 4 pharmaceutical companies. Among the sectors that appeared
the least aware of the existence of national standards, we found mining &
quarrying (33%) and chemicals (20%). There
is an interesting correspondence
between ANSA's priority sectors of development of standards and the level
of awareness of
actors within these
sectors. This can
have two explanations: a) ANSA's
outreach is progressively increasing and starts impacting the sectors where
ANSA was the most efficient in terms of standardization b) these sectors were
already sensitized to the
issues of standards
and were therefore
rightly identified by
ANSA as key sectors for standardization.
The
level of awareness of companies differed between cities, following a
similar – although less
striking – geographical pattern than the
one analyzed above
regarding the level
of awareness about ANSA. Kandahar’s
private sector also
appeared to be
less aware of
the existence of national
standards than the
rest of the
cities with only
40% of respondents responding
affirmatively, as against
50% in Kabul or Mazar-e-Sharif. Once again, any implementation plan for the
national standards will
have to take
into account the geographical nuances in the
country, and the
lower level of
awareness of the
Kandahari private sector.
Graph 1.1 - Are you aware of the existence of national standards?
PRODUCTION
RETAIL-WHOLSALES
SERVI CES
CONSTRACTION
00% 20% 40%
60% 80%
According to survey their
awareness of the
existence of international standards, 41.1% of respondents answered positively (cf. graph 3.2). Given the relatively low internationalization of Afghan
companies, and their difficult access to the export market, it is
understandable to find a lower proportion of company managers having some
knowledge about international standards. As
shown by graph
1.2,
the use of
international standards is
less common within
Afghan companies than the use of foreign standards, as only 25% of
companies (i.e. 87 companies) in total declared that some of their products
conformed to international standards. Once again, the trading sector is more
advanced in terms of use of international standards, as 34.8% of
respondents from this
sector, declared selling
products and services
that conform to international standards. For the same
reasons than with foreign standards, international trade – and imports in
particular – introduces international standards in the Afghan market.
Graph 1.2
“Our food products – our salt – were not standardized. We
wanted to sell our production to the WFP but they did not trust that our
products were standardized. Now one of our ten factories respects international
standards (30-59 PPM iodine)” [3].
Priorities in the
development and the
implementation of standards
are distinct for
import and export products, as they respond to different logics. The
development of standards is not expected to have the same outcomes for these
two different fields. Implementing national standards for imported goods and
national consumption is related to issues of public safety and
import-substitution while the development of national standards for exports
will aim at boosting Afghanistan's exports by focusing on its main competitive
products on international markets. This is why these two sets of standards have
been analyzed in separate sections in this report. The implementation of
standards is crucial for the support of Afghan exporting companies. Presently, only
the private actors
who have been
able to develop
bilateral relations with foreign traders, especially in
the US or in Europe,
have been able
to enter these
markets, thanks to compliance with foreigner standards.
The priorities in terms of implementation of standards for exports
followed quite logically the previously
identified – and
well documented –
most dynamic and
promising sectors of production of the Afghan
economy. The five priority
subjects for the implementation of national standards should therefore include
the following products:
1. Dried and Fresh Fruits
2. Carpet sector
3. Marble
4. Gemstones
Companies, private
and public stakeholders and many Afghan
consumers were asked
to determine the priority
subjects for the
implementation of standards
in country. As
it appeared, in the country,
there is a broad consensus among these various
actors on where the
priorities should be
set first for
the implementation of
standards. The survey and
qualitative interviews confirm that the implementation of standards should be
prioritized for:
1. Food, beverages and oil products
2. Pharmaceutical products
3. Petroleum Products (already started)
Literatures:
1. World Bank, 2011, Transition in
Afghanistan, Looking beyond 2014.
2. Kauffman
Foundation Research Series, 2011, Bactrian Gold: Challenges and Hopes for the
Private-sector Development in Afghanistan.
3.
The salt refinery plant was opened in September 2011 and belongs to the Mullah
Azad Group.
4.'http://www.goodafghannews.com/2011/09/25/salt-refinery-plant-inaugurated-in-balkh-province/