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Islamic Republic of Afghanistan has been going through a reconstruction process since 2001, in order to complete the transition to a free market economy and implement the rules of international trade. Within this framework, Afghanistan has been continuing the negotiations on its membership to the World Trade Organization.
Afghanistan is a landlocked country located in the center of Asia, with a population of 28.2 million. Afghanistan’s GDP is 14.5 billion USD, and it has a high growth rate recorded as 22.5% in 2010. The total trade volume of the country is 5.8 billion USD. The economy has traditionally been fuelled by agriculture and livestock although its arable area consists only 15% of its total land. Afghanistan’s important sources of income are fresh fruit and vegetables, dried fruits, livestock products such as leather and wool, marble products, mining, jewelry and precious stones.
Afghanistan is a member of ECO and OIC.
In order to establish the legal framework of bilateral commercial and economic relations, Turkey and Afghanistan have signed a number of agreements, including Trade Agreement (1976), Economic and Technical Cooperation Agreement (1976), Trade and Economic Cooperation Agreement (2005) and Reciprocal Promotion and Protection of Investments Agreement (2005).
So as to avoid double taxation in both countries, Turkey and Afghanistan stated their willingness to sign a Prevention of Double Taxation Agreement in 2005. In this respect, both countries are planning to start the negotiations at the earliest convenience in 2012.
On the other hand, within the framework of Trade and Economic Cooperation Agreement entered in force in 2005, Turkey-Afghanistan Joint Economic Committee (JEC) Mechanism was established. The mechanism aimed at holding regular meetings with the participation of public institutions from both Turkey and Afghanistan alternately in Ankara and Kabul to evaluate all aspects of the bilateral economic and commercial relations. The first meeting of the JEC meeting was held on April 2005 in Ankara.
With the aim of establishing a mutual confidence and cooperation environment among Turkey, Pakistan and Afghanistan, Turkey has initiated the “Turkey- Afghanistan-Pakistan Trilateral Summit” meetings in 2007. In this regard, the 6th Meeting of the Summit was held on December 2011 in Istanbul.
Afghanistan was Turkey’s 64th largest export partner in 2011.
Turkey’s exports to Afghanistan were 276 million USD in 2011 with an increase of 6.2% (260 million USD) from 2010. Since 2005, in which Turkey’s “Asia-Pacific Commercial and Economic Relations Development Strategy” was initiated, Turkey’s exports to Afghanistan have raised by 144% (113 million USD).
The top export categories (2-digit SITC) for 2011 were: electrical machines, apparatus and appliances (16%); manufactures of metal (13%); textile yarn, fabrics, made-up articles (9%), sanitary, heating and lighting appliances (6%), and iron and steel (5%).
Afghanistan was Turkey’s 131st largest import partner in 2011.
Turkey’s imports from Afghanistan realized as 4.7 million USD in 2011, decreasing by 6% (5.0 million USD) compared to 2010. On the other hand, our imports from Afghanistan have decreased by 42% since 2005.
The top 5 imports categories (2-digit SITC) for 2011 were: textile yarn, fabrics, made-up articles (45%), hides, skins and fur skins (42%), crude animal and vegetable materials (3%); leather, leather manuf., dressed fur skins (%2.7), and oil seeds and oleaginous fruit (2.6%).
The trade balance between Turkey and Afghanistan has been in favor of Turkey. Turkey had a trade surplus of 271 million USD in 2011 which increased by 6.4% (255 million USD) compared to 2010.
Contracting and Consultancy Services
Turkey ranks as the 5th country in the contracting sector of Afghanistan, and there are 140 registered Turkish contracting companies operating in Afghanistan.
Turkish contracting companies have been operating in Afghanistan since 2002. Our contracting companies have undertaken 442 projects that amount to 3.8 billion USD between the years of 2002 and 2010.
182 Turkish companies that operate in various fields have made foreign direct investment in Afghanistan. Total capital of these Turkish companies amounts to 81 million USD