HERAT -- The dumping policies of neighbouring countries, especially Iran, have led to the recent shutdown of eight factories in the Herat Industrial City, according to authorities and industrialists in Herat Province.
The factories produced cake, cookies and marble and employed hundreds of workers.
Several factories in the Herat Industrial City have been affected by the dumping policies of neighbouring countries, discouraging investors and industrialists, said Hamidullah Khadem, the director of the Herat Chamber of Industries and Mines.
The eight factories were forced to cease operations in less than a month, he said.
"Afghanistan has become self-sufficient in 27 sectors, all of which are functioning in the industrial park," he added. "Tariffs imposed by the government on similar products from outside helped in the growth of these products."
These sectors produce salt, biscuits and cake, beverages, marble and other goods.
"But similar products are being imported daily from neighbouring countries, especially from Iran, which has led factories to the verge of collapse," he added.
The Herat Industrial City has become a sore point for the Iranian regime, and with the support of warlords and mafia groups, the country aims to cripple it, according to Abdul Raziq Timori, director of Sakhawat Timori, a cake-producing company.
"Neighbouring countries deliberately export similar products to Afghanistan so that our domestic industries and products cannot grow," he said.
They do not want to see industries in Herat Province grow; therefore, they export their low-quality products through different routes and sell them at low prices that Afghan competitors cannot match, he added.
Iran’s destructive economic policies
Fortunately, the Afghan government is working to combat the dumping policies of neighbouring countries, say local officials.
The illegal export of similar products from neighbouring countries to Herat is a serious issue and the fight against it has started, Herat Governor Sayed Wahid Qatali told media on August 28.
"We are committed to preventing by all means the import of products to Afghanistan when they are produced domestically in the Herat Industrial City," he said. "We strongly urge Afghan importers not to import similar products, and they will face the consequences, should they continue doing so."
"Several factories in the industrial park have been severely affected by the import of similar products and destructive policies of neighbouring countries in recent years, and they could not compete," Qatali said.
"We will not allow any country to harm our industries, and we will combat the destructive policies of neighbours," he added.
Tehran is facing severe economic problems due to the sanctions imposed on it by the international community, leading it to attempt to dump its products on Afghan markets, said Mohammad Yaqub Mashouf, an economic analyst in Herat.
"Dumping policies are very dangerous and can easily destroy new Afghan industries. To capture the Afghan market, Iran first sells its products very cheaply, but once the factories in the industrial park are closed, it raises the prices of its products many times over," he said.
"The Afghan government must seriously combat the dumping policies adopted by neighbouring countries," said Mashouf.
"If it [the problem] is not tackled, domestic industries and products will lose the ability to compete with imported products and will eventually collapse," he added.
Paralysing Afghan industries
Of the 500 factories in the Herat Industrial City, more than 200 have ceased operations because of cheap imports and the dumping policies of the Iranian government, according to Herat authorities.
A number of industrialists whose factories were forced to close in Herat Province called on the Afghan government to prevent the neighbouring regime's destructive activities.
Low-quality, cheap Iranian stone arrives in Herat and the high-quality domestic stone cannot compete with it, said Abdul Qayoum Alizada, director of a marble factory in Herat.
"I have invested more than $600,000 (46 million AFN) in this factory. It used to produce 35 metric tonnes of marble each day, employing 50 workers. But now we don't have even a single worker, and our machinery has been shut off for the last couple of weeks," he added.
The stone from Iran is of very low quality, which cannot be compared to Afghan stone, but since it is cheap, customers prefer it, Alizada said.
Iranian stone arrives via illegal routes, with the Afghan government being unable to collect customs duties, and is sold in markets for very little, said Wais Wardak, director of another marble factory in the Herat Industrial City.
"We used to have 40 workers producing and processing more than 20 metric tonnes of stone per day, but now we have zero workers. We do not produce now, and our machinery has been turned off," he said.
"Iranian stone is deliberately exported to Afghanistan, and this has resulted in the closure of our factories," he added. "Low-quality Iranian stone is hampering the reconstruction and infrastructural development of Afghanistan."