Doing more business and less aid: The journey of a market system development project in Afghanistan

Short description

Afghanistan is still engaged in a war that has lasted a generation and in which 3,804 civilians died from attacks last year. Foreign aid, which had been keeping the government propped up, has continuously promoted a business culture of government reliance rather than innovation and independence. The country continuously ranks as one of the most corrupt in the world and the investment climate for new business opportunities is poor.

At the same time, Afghanistan has an employment challenge. As one of the youngest countries in the world and with more than 400,000 youth joining a stagnant economy’s labour force each year, the number of youth who are unemployed, under-employed or vulnerably employed grows by the day.

With an extremely challenging business climate on one hand and an immediate need to create jobs on the other, the Swedish International Development Cooperation Agency (Sida) funded the Road to Jobs (R2J) project to tackle both. The project was designed to address key constraints and strengthen the agriculture and manufacturing sectors challenges in Northern Afghanistan such that government and businesses could innovate, compete and create more and better jobs for those who need them most. This brief describes how R2J in collaboration with The Lab has implemented a market systems development approach in this fragile setting to create more and better jobs that could be sustained and reach scale. The brief dives into the ways the project navigated through early challenges to learn and improve to get businesses, government and business associations on board with new ways of working and initiate systemic changes.

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