Catalysts and Constraints: The Role of Small and Medium Enterprises in Afghanistan’s Economic Transformation

Abstract

Small and medium enterprises (SMEs) are considered among the most important factors of sustainable development and greater employment under the term “motor of growth.” In fact, SMEs have a significant impact on a country's economic growth. These companies and the opportunities they create lead to job creation, increased income, higher employment levels, and improved living standards, ultimately bringing positive changes to people’s lives in a country.Today, 90% of global economic activities are carried out by SMEs. These businesses produce approximately 85% of Afghanistan's semi-gross domestic products and employ nearly one-third of the country’s workforce (Mashal, 1392). If proper attention had been given to enterprises, the country could have achieved sustained economic growth and stability. Afghanistan's current strategy, particularly for SMEs, was finalized in 2009. However, it places more emphasis on the production sector as a key point for substituting imports.