The Afghan construction industry has been one of the big winners since the fall of the Taliban. NATO and the international community have pumped billions of dollars into building roads, schools and bases.
With the drawdown of troops and NGOs, however, comes a drawdown in construction spending, and that has Afghan contractors scrambling to find new business.
The offices of Mustafa Omid Construction Company in Kabul are silent, their jackhammers still and cement trucks parked. Company president Abdel Wakil Saadat says last year they did half a million dollars in business, mostly smaller projects like schools funded by Japan. This year, they did zero; they have no projects coming up.
Saadat says they have let go all but a few administrative staff, and it’s not what he had in mind when he started the company in 2004.
“At the beginning we thought there is a need for a lot of construction work and there is a big opportunity,” Saadat says. “We thought our business would continue to grow.”
Associates in Development is a mid-size construction firm based in Kandahar that’s focused on U.S. government-funded projects. A couple of months ago, they finished a $15 million project and they had upwards of 400 people on staff. They are currently bidding on jobs, but for now, there’s no hammering or sawing going on.
“As of right now we just got rid of two offices and in the works of potentially downsizing a third office, which we’re going to be down to about 25 staff members,” says CEO Amir Sediqi.
Nationally, there are thousands of jobs on the line. It’s not just unskilled laborers being laid off either, it’s engineers, accountants and project managers, some of whom are likely to take their skills to other countries.
Naeem Yassin, the head of the Afghan Builders Association, a trade organization that represents about 500 Afghan contractors, says that for years the country was swimming in money from NATO, USAID and other international donors.
“[In] 2010, just for the U.S. Army Corps of Engineers, they had us around $6 billion to $7 billion,” Yassin says.
Yassin says last year it dropped to $5 billion, and next year he says it will be around $2 billion; other donors are dialing back too. But, he remains optimistic that there will be future growth in housing and non-military building.
The Builders Association recently held a conference in Washington, D.C., in hopes of luring more business. Amir Sediqi attended the conference, and said it was full of Afghan contractors in a mild state of panic.
“There was this depressed look in their eyes, and they were just really looking for a solution to the lack of work right now,” Sediqi says.
The situation isn’t helped by the fact that many private investors are holding off on spending in Afghanistan until they see what things look like after NATO troops withdraw in 2014.
Aziz Mobarez is another contractor hoping to find a niche. Like other contractors in Afghanistan, he got into the business in 2007, anticipating 20 percent annual growth.
“Honestly, I’m giving myself and the company another six months,” Mobarez says. “I think that after six months, we cannot survive or we change our activity.”
So, for now, he and many other contractors are submitting bids, and waiting, and worrying about whether they will break any more ground.