What does it take for economies to grow? For some economies, foreign investment is a very important factor. Afghanistan is one country that would benefit greatly from foreign investment. But its infrastructure was devastated in 2002, and infrastructure problems have discouraged many foreign investors from doing business there, thus preventing economic improvement. While Afghanistan provides one good example of what is required for economic growth, other underdeveloped countries face very similar problems. The economic principles that help to explain Afghanistan's current situation may also be applied in other cases.
In this lesson, you will listen to an audio file about doing business in Afghanistan. While listening, you will use an interactive note-taker to record supporting details about three main ideas presented in the audio. Then, using your notes, you will answer questions related to the situation in Afghanistan.
Listen to the Marketplace audio file about doing business in Afghanistan: www.marketplace.org/shows/2002/05/16_mpp.html timestamp 8:39. While you are listening, use the note-taker to find supporting details related to these four main ideas: The four main ideas you will focus on today are:
- Devastated Infrastructure in Afghanistan
- Foreign Investment Obstacles
- Local Investment Obstacles
- Traveler and Visitor Obstacles
As you listen to the audio, take notes on any words you don't know, or words that may be important economic terms. Then listen to the audio again to gather additional details and possible definitions of the vocabulary words, using context clues, and record the additional information in your note-taker.
Would you do business in Afghanistan? Because of the great need, there are many business opportunities in Afghanistan- for example, in education, construction, telecommunications, security, and transportation services. Discuss the following scenario in small groups and record your ideas. As an entrepreneur you've just been given an opportunity to start a business in Afghanistan. To help you decide whether or not to take the opportunity, visit the U.S.Commercial Service website. Use the following questions from the note-taker to help you with your decision:
1. What type of business do you think might have the best chance of success?
2. What are the major economic risks of doing business in Afghanistan?
3. What are the major personal risks of doing business in Afghanistan?
4. What or who would you need to help you start a business there?
5. Why would an entrepreneur choose to start a business in Afghanistan?
6. Entrepreneurs always weigh risks and potential profits. Do the risks outweigh the profits in this case?
By the conclusion of this lesson, you should be able to identify at least three main factors that have caused the collapse of the economy in Afghanistan.
You should be able to identify at least three obstacles preventing foreign investors from helping the economy in Afghanistan to recover.
1. Hand in your note-taker. Your work should reflect an understanding of the decisions that entrepreneurs must make in order to weigh risks and profits.
2. Discuss Activity 2 in small groups and hand in your recorded ideas. As you reflect on this activity be sure to consider the decision-making process that entrepreneurs go through in order to secure profits and minimize risks.