February 7, 2009 / 6:26 PM / in 9 years

Corruption stunts Afghan rickshaw factory

JALALABAD, Afghanistan (Reuters) - Alam Gul Ahmadzai returned from Pakistan six years ago with an idea to open Afghanistan’s first rickshaw factory, but he says having a popular product has attracted corrupt officials to his business.

The run-down Ahoo factory (Ahoo means deer in Persian) on the outskirts of the city of Jalalabad in eastern Afghanistan has some 30 Afghan workers producing about four of the nifty three-wheelers a month.

Most people in eastern and southern Afghanistan use these small, economical vehicles as their main mode of transport on the crowded roads where four-wheel taxis are rarely available.

“The government should encourage local businesses instead of forcing them to give bribes,” Ahmadzai sighs despairingly. “These autos are much better than the ones made in Pakistan.”

Corruption is endemic in war-torn Afghanistan -- from rural police at checkpoints taking cash from passersby, to government officials taking a cut from business profits.

European leaders are increasingly vocal in their calls for good governance in Afghanistan while U.S. President Barack Obama has in the past called on Afghan President Hamid Karzai to rule effectively and to “get out of the bunker.”

Presidential elections are due in August.

“If there is no pressure and intimidation from the government I can manufacture one rickshaw a day,” Ahmadzai said.

One rickshaw sells for about 160,000 afghanis ($3,200), Ahmadzai said. His workers make the body parts by hand and use Japanese engines which he buys at the Pakistani border.

Unlike rickshaws made in Pakistan, the Afghan variety has a steering wheel and five gears, not three, the brake system is better, it has a clutch and the engine starts with a key.

BRIBERY BITES

Ahmadzai said he signed a permanent contract with the government three years ago, with a letter of permission from Kazai to start building the rickshaws, but the traffic department blocked his plans and demanded a new contract.

Lengthy and complicated bureaucratic procedures are one way government offices profit from businesses because they often require additional paperwork, the cost of which is borne by the applicant.

“I was asked from an official in the government to pay $100 for each rickshaw,” Ahmadzai said.

“I’ve got dozens of advance payments from the people in other provinces but I can’t meet their demands on time,” Ahmadzai said, adding if he does not pay this illegal tax on each vehicle, he cannot move them out of the factory.

The local authorities in Jalalabad accuse Ahmadzai of breaking the law by using spare parts from abroad.

“When the cars are labeled ”Made in Afghanistan,“ all the parts should be made here, not brought-in from other countries,” a senior police officer in charge of Nangarhar traffic said.

“The law does not allow such products to be assembled using parts made in other countries,” he said.

Afghanistan is ranked 176th on a “corruption perception index” of 180 countries compiled by Transparency International, and its position on the World Bank’s “easy of doing business” index is also very low.

Battered by three decades of war, Afghanistan relies on aid to finance some 90 percent of its budget. Endemic corruption has stunted the growth of the private sector as small businesses and overseas investors are detracted by the prospect of giving a share of their profits to warlords and officials.

People in Jalalabad praise Ahmadzai’s local product and have asked the government to help the Ahoo factory; there are about 80 Ahoo rickshaws on Jalalabad’s roads.

“I feel very proud when I use Afghan-made vehicles, and I want the government to help our local products as much as they can,” university student Noor Rahman said.

“I normally use a rickshaw to get to and from university and I waited a long time to see Afghan-made ones,” he said.

“Ahoo rickshaws are more comfortable, clean and fast, and make less smoke than normal cars, which is also good for the environment,” pensioner Haji Gul Khan said.

“One day I will be able to produce vehicles run on electricity if I get support and money,” Ahmadzai said.

Editing by Golnar Motevalli and Matthew Jones

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