THE BLOG

The Hard and Necessary Work of Investing in the World's Most Vulnerable Places

05/06/2015 03:33 pm ET | Updated May 06, 2016

When I first visited Afghanistan in 2002, the country was boldly opening a new chapter in its history. Ashraf Ghani was Minister of Finance, the Taliban had been toppled and the initial pillars of a democratic government were being put in place. I traveled there in my role as President of the World Bank's Consultative Group to Assist the Poor, with an aim to create a program to spur microfinance investment with the support of then Minister Ghani. The scene in Afghanistan was chaotic, but also hopeful. Aid workers, foreign governments and private investors were all arriving to address a great need and a great opportunity.

It was ten years later when I returned, this time in my role leading the Overseas Private Investment Corporation, which has for decades supported American investors in the world's most challenging markets. As the U.S. Government's development finance institution, OPIC recognizes that economic stability helps foster political stability and mobilizes private capital to help address critical development challenges. During that second trip I saw solid evidence of Afghanistan's burgeoning market economy with hundreds of new businesses, predominantly owned by Afghans, catering to an enormous clientele ranging from international consumers to independent Afghan households.

Today, as the country closes the chapter opened in 2002 and moves forward with its own security forces and a democratically elected unity government, these businesses will be key to sustaining the momentum catalyzed by the massive U.S. and international efforts over the last decade.

Of course, significant challenges remain in the form of limited infrastructure, a large informal economy, and persistent areas of criminal violence. Despite these challenges, OPIC has been able to identify and support projects that are generating income and opportunity for people who previously had little or none. In the western part of the country, we've provided financing to a Maryland company investing in a project to help suppliers of raw cashmere build a supply chain and sell their product for export. The business had added more than 1,500 high quality jobs for the men and women in the region. OPIC has also financed a bottled water company which was originally focused on supplying bottled water to the international troops and has now adapted to a changing market by shifting to a domestic market with an expanded line of juices and other beverages. The company employs hundreds of local workers. Another OPIC client, a textile company with a US investor, was employing hundreds of Afghan women to make uniforms for the Afghan military and police. Now that company is adding a line of civilian clothing for export.

We support these projects not because they are easy but because they support our national interests. When investing in regions that are vulnerable to violent conflict, progress is often slow and unsteady and setbacks are common. But supporting the sort of private sector investment that will create businesses, jobs and opportunity that can promote stability is a key step toward moving beyond conflict. This is a critical part of the work OPIC does not just in Afghanistan, but around the world, from Jordan to Pakistan, the West Bank, Ukraine and Nigeria.

Indeed, over a third of our $18 billion portfolio today supports private investment in regions that are in or are vulnerable to violent conflict. In just one example of the positive impact of investment in vulnerable places. An OPIC-supported loan guaranty program in the West Bank has resulted in loans to 750 small businesses in sectors from agriculture to manufacturing to retail, and resulted in the creation of an estimated 10,000 jobs, many held by women.

Last month, I had the privilege of participating in meetings at Camp David with Afghan President Ashraf Ghani and CEO Abdullah Abdullah, in a strategic dialogue hosted by Secretary of State Kerry and including Defense Secretary Carter and Treasury Secretary Lew. The economic components of the meeting centered on the best ways to manage Afghanistan's economic transition in the coming years and support a sustainable, self-reliant Afghanistan. I came away convinced that the Afghan leadership is focused on doing everything it can to make the Afghan environment friendlier to foreign investment. They know how powerful investment can be to creating employment and enhancing stability.

The long-term challenge to building a stable business environment in Afghanistan will require work on many fronts - combating corruption, transparent licensing and permits, civil servant skill building, predictable regulations, effective dispute resolution to name a few. Afghanistan has come such a long way since I first set foot in the country. But it still has a long way to go to ensuring its success as an economically independent country. Private investment will be critical in this journey and OPIC stands prepared to assist in catalyzing this investment. It is in the long-term interest of both Afghanistan and the United States.