How to Support Female Entrepreneurs in Afghanistan

June 26, 2024
BY: Belquis Ahmadi;  Afsana Rahimi
United States Institute of Peace

Tuesday, June 25, 2024

Potential areas of cooperation between the Taliban and the international community, such as private sector development and alternative livelihoods to now-banned opium poppy cultivation, will be on the agenda at a meeting of international envoys for Afghanistan hosted by the United Nations in Doha from June 30 to July 1. Discussions on women’s rights are not included, as the Taliban consider it an internal matter. This is ironic, given that the private sector is one area where the Taliban allow limited women’s participation.
As envoys discuss normalizing relations with the Taliban while respecting human rights, it’s important to consider if women benefit from private sector development and how it can empower them. Despite claimed support for women in the private sector, the Taliban’s approach lacks essential elements for genuine economic empowerment.

Exclusion of Women a Drain on Afghanistan’s Economy

Excluding women from education, public spaces and employment severely hampers the Afghan economy. Sustainable prosperity is unattainable without the contributions of half the population. Banning women from education beyond sixth grade cuts the qualified labor force by half, and further restrictions on educated women limit the country’s productive capacity even more.

Studies have shown that gender inequality in the workforce can have a substantial negative impact on a nation’s gross domestic product. The World Bank estimates that gender inequality in earnings alone costs the global economy $160 trillion. A 2024 United Nations Development Program (UNDP) report concluded that restrictions on women’s rights and employment are significantly hampering economic recovery in Afghanistan. The report notes women’s participation in the workforce dropped dramatically — from 11% in 2022 to just 6% in 2023 — as a consequence of restrictions placed on them by the Taliban.

While the Taliban ostensibly support women working in the private sector, the gender segregation enforced by the Taliban poses a significant obstacle to women’s businesses and their employment in the private sector. Female entrepreneurs are encountering significant obstacles in acquiring or renewing their business licenses under the Taliban’s rule. Moreover, a significant number of established, professional and trained female entrepreneurs have left the country due to the Taliban’s restrictive policies and the ban on education.

In Afghanistan, women have historically played an important role in running businesses and creating jobs for both women and men.

In Afghanistan, women have historically played an important role in running businesses and creating jobs for both women and men. As more and more men took up arms after the Soviet invasion of Afghanistan in 1979, women were compelled to become the primary breadwinners for their families. More women started entering the workforce and pursuing educational opportunities. Many women in both urban and rural communities turned to income-generating activities, establishing micro and small businesses. Women in rural areas have long been involved in dairy production, the clothing industry, embroidery, food processing and handicrafts. In these communities, education and professional expertise in entrepreneurship were not necessarily prerequisites for success, as marketing and the financial aspects of the businesses were handled by male family members.In a survey conducted in 2020, the Afghanistan Women’s Chamber of Commerce and Industries (AWCCI) identified 2,471 formal businesses owned by women across 32 provinces, excluding Nuristan and Paktika. Formal businesses are defined as those that have acquired a license from the Ministry of Commerce and Industries. Additionally, there were 56,000 informal women-owned businesses. The survey found that all together these businesses had created over 130,000 jobs.

The AWCCI’s initiatives have played a crucial role in empowering female entrepreneurs and supporting inclusive job creation, demonstrating the substantial impact of targeted investment in women’s economic activities. In 2017, the year the AWCCI was established, the total amount of investment by businesswomen was estimated at $87 million. The chamber connected Afghan women to regional and global platforms. By 2020, the investment by businesswomen had increased to $90 million.

Prior to the Taliban taking power in 2021, women-owned businesses included a diverse range of products and services, from carpet weaving to construction, as well as nontraditional businesses such as media outlets, technology, agribusinesses and import and export. With technical and financial support from donor agencies and land provided by the government, women-only markets were constructed in 13 provinces. Women-owned kiosks and fast-food restaurants in parks were also dedicated to women and families.

Afghan women participated in domestic trade fairs across multiple provinces. They successfully entered the global market, showcasing their products at regional and international trade fairs in countries such as India, Uzbekistan and the United Arab Emirates, expanding their market reach and entrepreneurial opportunities.

Life for Women under the Taliban

Since 2021, the Taliban have issued decrees severely restricting women’s employment opportunities, undermining genuine economic empowerment. The UNDP’s April 2024 report highlights significant barriers for female entrepreneurs and employees, including limited market access, reduced mobility, regulatory restrictions and discrimination. Many women-owned businesses face challenges such as reduced customers and logistical issues.

The Taliban’s restrictions disrupt social networks, increase isolation and stress and erode women’s sense of identity and purpose.

These restrictions disrupt social networks, increase isolation and stress and erode women’s sense of identity and purpose. They cause profound emotional and psychological impacts, including feelings of hopelessness, diminished self-esteem, anxiety and depression among women. The ban on girls’ education above sixth grade limits educational opportunities and stifles aspirations, leading to long-term detrimental effects on women’s mental health, confidence and overall well-being.A female entrepreneur in western Afghanistan who owns a small business told us her monthly income dropped from $2,000 to zero. Another business owner noted the country’s rapid decline into poverty and famine. “The situation on the ground is deteriorating rapidly,” said this person, who, like others interviewed for this article, spoke on the condition of anonymity. “Intellectuals [are] fleeing and the economy collapsing. The authorities are exacerbating the crisis by imposing excessive taxes and coercing people to contribute more, even going as far as shutting down some businesses and enterprises.”

Despite the Taliban’s apparent support for trade fairs, female entrepreneurs face significant challenges. Restrictions on attendance to women who lack the financial means to purchase goods reduce the fairs’ profitability for female entrepreneurs. Some women have turned to online businesses or WhatsApp groups to promote their products, but these efforts are limited compared to men’s access to investors and buyers. This glaring disparity highlights women’s ongoing challenges in accessing markets and financial support.

Additionally, female laborers in the private sector face severe restrictions. In December 2023, for example, the Taliban ordered pine nut processing factories in Paktia province to terminate the jobs of female laborers, affecting several hundred women. In January, a similar order in Nangarhar province led to the dismissal of around 300 women from a pine nut processing factory. These policies target and undermine women’s workforce participation, exacerbating economic hardships and impeding their ability to sustain livelihoods.

Exodus of Female Entrepreneurs Impacts Economic Stability and Growth

A significant number of established, professional and trained female entrepreneurs have left Afghanistan due to the Taliban’s restrictive policies, especially the ban on education for women. They have been forced to seek refuge or migrate to other countries to secure educational opportunities for their daughters. This exodus has caused a brain drain, depriving the nation of skilled female entrepreneurs and leaving those who remain without the necessary resources and support to run successful businesses. The restrictive environment further stifles innovation and growth, leading to a decline in the quality and sustainability of women-owned businesses.

“For 15 years, I proudly owned and operated a successful business, offering employment opportunities to over 100 women and men,” said a former business owner who was forced to leave Afghanistan in search of better opportunities. “I now find myself displaced in a foreign land, grappling with the challenges of starting anew. I chose to leave everything behind so that my daughters could pursue their education,” she added. Her story highlights the broader issue of economic resilience and potential being diminished by the loss of entrepreneurial leaders.

The lack of role models and mentors discourages new female entrepreneurs, undermining economic diversity and stability and reversing progress in women’s economic empowerment.

Conclusion and Recommendations

A stronger economy is a shared interest among the Taliban, the Afghan people and the international community, but it is also a battleground for gender discrimination against women, a critical aspect that needs full consideration in the Doha discussions. Women have historically participated in the economy, providing practical benefits. Despite the Taliban’s claims of supporting women in economic roles, their actions contradict this by restricting opportunities in both public and private sectors. These include bans on public sector employment, wage reductions and restrictions on hair salons, gyms and public baths, as well as licensing and capital requirements. Indirect social constraints like mahram rules and potential future education bans further limit women’s economic prospects. The international community must ensure that development aid does not discriminate against women or become inefficient due to their exclusion.

The international community must ensure that development aid does not discriminate against women or become inefficient due to their exclusion.

In Doha, meeting participants will discuss ways to implement the recommendations of the U.N. special coordinator of the independent assessment mandated by United Nations Security Resolution 2679 (2023) in January. The report noted: “adherence to principles of non-discrimination and inclusion, respect for women’s rights and efforts towards their meaningful participation and respect for the fundamental rights and freedoms of all Afghans should be ensured and advanced.” In Doha, participants should also consider the following recommendations:

  • Ensure Afghan women have unrestricted access to domestic and global markets: The Taliban must allow Afghan women full access to both domestic and international markets by lifting all existing restrictions. This will enable women to participate freely in economic activities, helping Afghanistan to utilize its full workforce potential, stimulate economic growth and improve societal well-being.
  • Provide safe spaces and opportunities for capacity building for female entrepreneurs: Capacity building for female entrepreneurs is impossible without safe environments. The Taliban must stop intruding on and disrupting training efforts, ensuring that women can develop their skills and businesses without fear. Creating secure spaces for learning and growth is essential for empowering women and fostering economic development. Empowerment activities should focus on enhancing skills related to entrepreneurship, leadership, financial literacy and technology.
  • Establish comprehensive benchmarks to measure contributions of female entrepreneurs: Donor communities should establish comprehensive benchmarks to evaluate the economic growth and contributions of female entrepreneurs. This involves setting clear metrics and conducting regular evaluations to monitor progress. By systematically tracking the performance of women-led businesses, donor communities can identify areas for improvement and provide targeted support.
  • Ensure women’s participation and empowerment in humanitarian aid and private sector development: Donor communities should benchmark humanitarian assistance to ensure it promotes both the rights of women to participate in the assisted sectors and tangible increases in women’s actual participation in the private sector. This involves setting clear criteria for evaluating how well aid initiatives support women’s inclusion and empowerment. By systematically measuring and tracking women’s engagement in these sectors, donors can ensure their assistance is reaching women.
  • Empower women by giving them comprehensive access to macro-finance and global markets: Institutions like the World Bank, alongside Islamic microfinance initiatives, must ensure Afghan women have access to macro-finance and global markets. This goal demands robust, long-term strategies and unwavering political commitment. Without such measures, current support systems will only address women’s immediate needs, falling short of fostering sustainable economic independence and growth.

Afsana Rahimi is the chairperson of the Afghanistan Women Chamber of Commerce and Industry and the vice chairperson of the Afghanistan International Chamber of Commerce. She is also the co-founder of Global Afghan Women Trade Caravan and senior vice president of the Afghanistan Business Council–USA.

How to Support Female Entrepreneurs in Afghanistan

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