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Ministry ofIndustry and CommerceIslamic Republic of Afghanistan
AFGHANISTAN’SNATIONAL EXPORT STRATEGY 2018-2022
PRECIOUS STONES AND JEWELLERY SECTORRevealing Afghan beauty to international markets
AFGH
ANISTAN
• NATIO
NAL EXPO
RT STRATEG
Y - PRECIOUS STONES AND JEW
ELLERY SECTOR •
2018-2022
ITC is the joint agency of the World Trade Organization and the United Nations. As part of ITC’s mandate of fostering sustainable development through increased trade opportunities, the Chief Economist and Export Strategy section offers a suite of trade-related strategy solu-tions to maximize the development pay-offs from trade. ITC-facilitated trade development strategies and roadmaps are oriented to the trade objectives of a country or region and can be tailored to high-level economic goals, specific development targets or particular sectors, allowing policymakers to choose their preferred level of engagement.
The views expressed herein do not reflect the official opinion of ITC. Mention of firms, prod-ucts and product brands does not imply the endorsement of ITC. This document has not been formally edited by ITC.
© International Trade Centre 2018ITC encourages reprints and translations for wider dissemination.
Short extracts may be freely reproduced, with due acknowledgement, using the suggestion citation.
For more extensive reprints or translations, please contact ITC, using the online permission request form:
http: / / www.intracen.org / Reproduction-Permission-Request /
The International Trade Centre ( ITC )
Street address : ITC, 54-56, rue de Montbrillant, 1202 Geneva, SwitzerlandPostal address : ITC Palais des Nations 1211 Geneva, SwitzerlandTelephone : + 41- 22 730 0111Postal address : ITC, Palais des Nations, 1211 Geneva, SwitzerlandEmail : [email protected] : http : / / www.intracen.org
Layout: Jesús Alés – www.sputnix.es
AFGHANISTANNATIONAL EXPORT STRATEGY2018-2022PRECIOUS STONES AND JEWELLERY SECTOR
This project is funded by the European Union
Ministry ofIndustry and CommerceIslamic Republic of Afghanistan
iii
ACKNOWLEDGEMENTS
The Precious Stones and Jewellery Strategy is an integral part of Afghanistan’s National Export Strategy. It was developed under the aegis of the Islamic Republic of Afghanistan, the leadership of the Ministry of Industry and Commerce, Afghanistan Women Chamber of Commerce and Industry, and the Afghanistan Chamber of Commerce and Industry, in close collaboration with the Afghanistan National Standards Authority. The Strategy benefited from the contributions of sector stakeholders and associations, who played an important role in the consultative process. This Strategy was elaborated thanks to technical assistance provided by the International Trade Centre, and falls under the framework of the European Union ( EU )-funded ‘Advancing Afghan Trade : EU Trade Related Assistance’ project.
This document reflects the ambitions of the public and private stakeholders who defined the enhancements and future orientations for the sector with the objective of increasing export performance and social dividends.
iv
NOTE TO THE READER
Afghanistan’s NES was developed based on a participatory approach during which over 500 Afghan industry leaders, small business owners, farmers and public sector representatives held consultations to reach consensus on key sector com-petitiveness issues and priority activities. These inclusive consultations were held throughout the country, including in Mazar-e-Sharif, Herat, Kandahar and Kabul, with participation of stakeholders coming from Nangarhar Province.
Besides in-depth research and value chain analysis, these consultations were com-plemented by:
� Factory visits through which supply chain assessments were carried out to gain further knowledge on key issues such as quality procedures, technical skills, lean management, quality of raw materials, access to market, etc.
� Interviews with domestic, regional and international buyers to guide the NES with strategic insights and market intelligence as well as buyers’ requirements in terms of quality standards, food safety, packaging, buying cycles, distribution channels, prices, etc.
� Donor coordination meetings to identify synergies with ongoing / planned ini-tiatives of development partners to eventually result in collaboration during the implementation phase.
In spirit and in action: The NES is aligned with existing national and sector-specific plans and policies and builds on ongoing initiatives in areas related to private sector development, regional integration, investment, and youth and women’s economic empowerment.
Equally important, the NES initiative already accommodates budgeting to support implementation of critical pilot activities identified during the design process. This will ensure that impact and momentum are generated from early on, and support further resource mobilization and confidence-building.
v
The principal outputs of the NES Afghanistan design initiative are endorsed, coherent and comprehensive export Strategy documents with a five-year detailed plan of ac-tion ( PoA ) and implementation management framework. These documents include:
1. A main NES document, which contains Trade Support Functional strategies, offering critical support across value chains and acting as enablers for sector development.
2. Individual NES priority sector strategies packaged as separate documents but in alignment with the main NES findings and overarching strategic objectives.
NES Afghanistan
Main NES document comprising Trade Suppor t Functional Strategies:
� Quality management � Trade facilitation � Trade information and promotion � Skills development � Business and professional services � Access to finance
Individual NES priority sector documents:
� Saffron � Fresh fruits and vegetables � Dried fruits and nuts � Carpets � Marble and granite � Precious stones and jewellery
vi
CONTENTS
Acknowledgements iii
Note to the reader iv
EXECUTIVE SUMMARY 1
PRECIOUS STONES AND JEWELLERY : A BRILLIANT OUTLOOK AT THE GLOBAL LEVEL 3
SWITZERLAND 4
HONG KONG ( CHINA ) AND MAINLAND CHINA 5
UNITED STATES 6
UNITED KINGDOM 7
INDIA 7
UNITED ARAB EMIRATES 8
AN OVERVIEW OF PRECIOUS STONES AND JEWELLERY IN AFGHANISTAN 9
KEY CURRENT PRODUCTION STATISTICS 9
SOCIOECONOMIC IMPACT 10
AFGHANISTAN’S EXPORT PERFORMANCE 10
VALUE CHAIN ANALYSIS 13
Input supply 13
Production 13
Processing 14
Distribution 14
POLISHING THE KNOWLEDGE OF KEY COMPETITIVENESS CONSTRAINTS 16
COMPETE 16
CONNECT 19
CHANGE 21
vii
MARKETS FOR AFGHANISTAN’S PRECIOUS STONES AND JEWELLERY SECTOR 23
SHINY FUTURE FOR THE PRECIOUS STONES AND JEWELLERY INDUSTRY AND TRADE 23
MARKET SEGMENTATION 23
FOLLOWING THE LATEST TRENDS 24
Internationalization of brands 24
E-commerce is the fastest-growing channel for jewellery 24
Appealing to young audiences requires product development and an acceleration of supply chain processes 24
PRECIOUS OPPORTUNITIES : CONSOLIDATED AND EMERGING MARKETS 25
Short-term priorities ( 1–3 years ) 25
Medium-to-long term ( +3 years ) 26
STRATEGIC OPTIONS FOR REVIVING AND PROMOTING AFGHAN PRECIOUS STONES AND JEWELLERY 31
VISION 31
STRATEGIC OBJECTIVE 1 : INCREASE PRODUCTIVE CAPACITY WHILE SUPPORTING DIVERSIFICATION AND ENTREPRENEURSHIP. 31
STRATEGIC OBJECTIVE 2 : IMPROVE THE REGULATORY FRAMEWORK AND INFRASTRUCTURE SUPPORT 33
STRATEGIC OBJECTIVE 3 : CREATE AND PROMOTE AN AFGHAN PRECIOUS STONES AND JEWELLERY BRAND 35
MOVING TO ACTION 37
KEY REQUIREMENTS FOR EFFECTIVE IMPLEMENTATION 37
STRATEGIC PLAN OF ACTION 39
REFERENCES 49
viii
FIGURES
Figure 1 : Theory of change 2
Figure 2 : World exports in the precious stones and jewellery sector, 2005–2016 ( US $ billions ) 3
Figure 3 : Top 10 exporters in the precious stones and jewellery sector ( US $ billions ) 3
Figure 4 : Trade balance, top 10 importers of precious stones and jewellery, 2016 ( US $ billions ) 4
Figure 5 : Afghanistan’s exports of precious stones and jewellery, 2005–2016 ( US $ millions ) 11
Figure 6 : Afghanistan’s top export destinations for precious stones and jewellery, 2005 ( US $ thousands ) 12
Figure 7 : Afghanistan’s top export destinations for precious stones and jewellery, 2015 ( US $ thousands ) 12
Figure 8 : Afghanistan’s exported precious stones and jewellery, 2016 12
Figure 9 : Current value chain 15
Figure 10 : Problem tree – compete 18
Figure 11 : Problem tree – connect 20
Figure 12 : Problem tree – change 22
Figure 13 : Jewellery segmentation and indicative prices 24
Figure 14 : Future value chain – strategic objective 1 32
Figure 15 : Future value chain – strategic objective 2 34
Figure 16 : Future value chain – strategic objective 3 36
ix
BOXES
Box 1 : Switzerland 4
Box 2 : Hong Kong ( China ) and China 5
Box 3 : United States 6
Box 4 : United Kingdom 7
Box 5 : India 8
Box 6 : United Arab Emirates 8
Box 7 : Varieties of raw materials 9
Box 8 : Export potential in India 26
Box 9 : Export potential in the United States 27
Box 10 : Export potential in the UAE 29
Photo: ITC
xi
ACRONYMS
The following abbreviations are used :
ACCI Afghanistan Chamber of Commerce and Industries
ACIM Afghanistan Chamber of Industries and Mines
ANSA Afghanistan National Standards Authority
AWCCI Afghanistan Women Chamber of Commerce and Industry
EPAA Export Promotion Agency of Afghanistan
EU European Union
FACT Federation of Afghan Craftsmen and Traders
ICC International Chamber of Commerce
ITC International Trade Centre
MoCI Ministry of Commerce and Industries
MoE Ministry of Education
MoF Ministry of Finance
MoLSAMD Ministry of Labour, Social Affairs, Martyrs and Disabled
MoMP Ministry of Mines and Petroleum
NES National Export Strategy
PoA Plan of action
PSU Precious Stone Union
SMEs Small and medium-sized enterprises
TVET Technical and vocational education and training
UAE United Arab Emirates
Photo: ITC
[ EXECUTIVE SUMMARY ]
1
EXECUTIVE SUMMARY
The Afghan precious stones and jewellery sector offers a shining future to the country’s handicraft industry. With its many stages of production, the sector holds opportunities to generate inclusive employment for women, youth and peo-ple in rural areas at different value chain steps.
Precious stones and jewellery production are deeply rooted in the Afghan culture. In recent years, greater use of e-commerce has facilitated access to Afghanistan’s hidden gems and unique Afghan pieces have been rediscovered by international markets. The increasing visibility of Afghan jewellery paired with international demand for unique, handmade products contributes to a brilliant outlook for the sector. Unlocking this potential will unveil Afghan art and tradition to world markets.
At present, the sector’s export potential is constrained by supply-side and business environment challenges, as well as difficulties entering new markets. Improvements across the value chain are needed to overcome these hurdles, in areas ranging from mining techniques to processing meth-ods and introducing modern technology.
The Strategy thus aims to achieve the following impacts, with the overarching goal of strengthening the Afghan pre-cious stones and jewellery sector’s value proposition to in-ternational buyers. Some of the specific objectives are :
� Increase precious stone and jewellery production in terms of volume and value ;
� Diversify product and design variety and target markets ; � Establish Afghan precious stones and jewellery as
unique, handmade products with a lasting brand in in-ternational markets ;
� Increase the inclusion of women, youth and people in ru-ral areas, and spread socioeconomic benefits to actors across the value chain.
The Strategy is driven by the following overall vision :
“ Precious stones and jewellery : revealing Afghan beauty
to international markets ”To achieve this vision, the Strategy focuses on three strate-gic objectives.
STRATEGIC OBJECTIVE 1 : INCREASE PRODUCTIVE CAPACITY WHILE SUPPORTING DIVERSIFICATION AND ENTREPRENEURSHIP
This strategic objective aims to professionalize and stand-ardize both mining and processing practices in order to achieve larger-scale production. As a part of this objective, entrepreneurship will be encouraged and management skills enhanced. Efforts will be made to improve access to finance in order to facilitate purchasing the modern machinery and tools needed to perform advanced value addition.
STRATEGIC OBJECTIVE 2 : IMPROVE THE REGULATORY FRAMEWORK AND INFRASTRUCTURE SUPPORT
This strategic objective will focus on improving coordina-tion between the various actors involved in the value chain, including miners, intermediaries, exporters, processors, re-searchers and other sector stakeholders. Success in this area will be achieved through improved sector governance, improved access to quality testing and certification, institu-tional support and empowered sector associations, with a particular focus on organizations led by women.
STRATEGIC OBJECTIVE 3 : CREATE AND PROMOTE AN AFGHAN PRECIOUS STONES AND JEWELLERY BRAND
The aim of this objective is to build on recent but still fragile achievements of the Afghan precious stones and jewellery sector in order to cement a high reputation in international markets. This objective can be attained by supporting an integrated approach to promoting and commercializing the unique products within the sector export basket. Adequate support is needed for the quality-testing institutions and cer-tificates that will protect the reputation of Afghan precious stones and jewellery.
Finally, this objective will focus on building the capacity of select enterprises to modernize their brand and thereby appeal to a larger pool of potential buyers, as well as de-velop the analytical ability to identify and adapt to dynamic global trends.
2
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Figure 1 captures the vision and strategic objectives of the precious stones and jewellery sector.
Figure 1 : Theory of change
Establisha strong Afghan brand for precious stones and jewellery
Unlock financial resources and
support through the Government
Upgrade technology and
train human capital
Upgrade technology and
train human capital
Increase absolute volumes while
improving quality levels
ConnectCompete
VISION
‘Precious stones and jewellery: revealing Afghan beauty to
international markets’
1. Increase productive capacity while supporting diversification
and entrepreneurship
3. Create an Afghan precious stones and jewellery brand
2. Improve the regulatory framework and infrastructure
support
A gem in the Afghan economy not yet able to unfold its full potential to integrate women, youth and people in rural areas through modernization and technological development in mining and processing
• Increased precious stones and jewellery production in terms of volume and value• Diversified product variety and target markets• Afghan precious stones and jewellery established as a unique, handmade product with a lasting brand in international markets • Increased inclusion of women, youth and people in rural areas, and socioeconomic benefits spread to actors across the value chain
IMPA
CTST
RATE
GIC
OBJE
CTIV
ESST
RATE
GIC
THRU
STS
SITU
ATIO
N AN
ALYS
ISIM
PACT
• Limited access to finance and governmental support schemes
• Scarce critical inputs • Weak awareness of quality
management and certifica-tion
• Insufficient availability of trained workers and knowledge
• High production costs
Change
• Limited connectivity to international markets
• Insufficient in-market support
• Limited branding and promotion of Afghan products
• Poor logistics and trade-related infrastructure
• Limited capacity to upgrade the value and quality of production
• Poor managerial skills and lack of institutional support fostering innovation
• Restricted sector expansion resulting from operational obstacles
[ PRECIOUS STONES AND JEWELLERY : A BRILLIANT OUTLOOK AT THE GLOBAL LEVEL ]
3
PRECIOUS STONES AND JEWELLERY : A BRILLIANT OUTLOOK AT THE GLOBAL LEVEL
Throughout history, human beings around the world have desired precious stones, attracted by their beauty and luminosity. These physical characteristics come from dif-ferent minerals being subjected to varying environmental conditions, such as soil, pressure and heat. Colombia, for instance, is the biggest producer of emeralds, contributing 75 % to 90 % of the world’s supply. Sri Lanka is known for more than 50 varieties of gems, ranging from sapphires to rubies. In Africa, Madagascar is responsible for almost 50 % of the world’s total production of sapphires. Botswana is one of the most important sources of diamonds. Approximately 90 % of the world’s opals come from Australia.
While the above countries, among others, are known as the best sources for various precious stones, the largest exporters of precious stones and jewellery are Switzerland, Hong Kong ( China ), the United States of America, India, the United Arab Emirates ( UAE ) and the United Kingdom of Great Britain and Northern Ireland.1 Many countries without precious stone resources are among the world’s largest ex-porters ; their advanced technology, expertise and long his-tory of processing has allowed them to capture enormous profits through value addition.
Exports of precious stones and jewellery experienced a slowdown in growth after the 2008 financial crisis. The sector returned to stable growth in 2013, led by growing demand from rapidly developing emerging markets. After 2013, falling gold prices hurt export totals, as gold products account for more than half of the sector’s value. The sec-tor experienced a decline until exports stabilized at around US $ 630 billion in 2015.
1.– Based on HS71.
Figure 2 : World exports in the precious stones and jewellery sector, 2005–2016 ( US $ billions )
-
100
200
300
400
500
600
700
800
900
1.000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source : Trade Map ( 2017 ).
Figure 3 : Top 10 exporters in the precious stones and jewellery sector ( US $ billions )
- 10 20 30 40 50 60 70 80 90
100
Switzerla
nd
Hong K
ong (
China)
United
States
India
UAE
United
King
dom
China
Belgium
Canada
Israel
Source : Trade Map ( 2017 ).
Photo: ITC
4
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Figure 4 : Trade balance, top 10 importers of precious stones and jewellery, 2016 ( US $ billions )
-150
-100
-50
0
50
100
150
Switzerland China UnitedKingdom
Hong Kong,China
United Statesof America
United ArabEmirates
India Belgium Germany Singapore
Imported value in 2016 Exported value in 2016 Trade balance
Source : Trade Map ( 2017 ).
In this section, the following top importers and re-export-ers in the sector will be analysed in detail. They include Switzerland, Hong Kong ( China ) and mainland China, the United States, the United Kingdom, India and the UAE.
SWITZERLAND
Switzerland is the largest exporter in the sector, with an ex-ported value of US $ 98.5 billion in 2016. The country sup-plies clients in the United Kingdom, China, Hong Kong ( China ), India, the United States and France. Diamonds, rubies and other precious stones in worked form ( pol-ished and cut but not set in accessories ) contribute to Switzerland’s world-leading export basket. With advanced cutting, polishing and trimming technologies, the country exports semi-processed and processed precious materials to worldwide markets based on market ties and trust estab-lished over many years. The majority of these materials are
not sourced domestically. The country instead imports them from worldwide markets to re-export after value addition.
Because Switzerland lacks mineral resources but has world-leading technology, it is also the greatest importer of precious stones and jewellery, recording imports worth $100 billion in 2016. The main suppliers are the UAE, United Kingdom, United States, Hong Kong ( China ), France and Thailand. The main import goods are raw and semi-pro-cessed precious metals and stones that undergo various forms of value addition. At the same time, Switzerland is an attractive market for the sector, with high consumer demand for luxury goods.
Box 1 : Switzerland
Switzerland as a consumer market
The Swiss precious stones and jewellery sector has a high-quality brand image. The price bracket, therefore, lies between mid-price and premium. When it comes to fine jewellery, silver products are preferred over gold. As gold and platinum are generally too expensive for the average consumer, demand has shifted to more affordable metals. Modern and contemporary designs are popular with younger consumers. Diamonds are usually regarded as out of most consumers’ budgets except for special occasions, such
as engagements. More affordable non-diamond jewellery enjoys high popularity in Switzerland. Jewellery as part of the fast fashion scene is increasingly popular. Many consumers buy affordable jewellery to complement their outfits and to highlight the wearer’s personality and individuality. Jewellery consumption for fashion purposes translates to high frequency of buying and selling items. Products made of trendy but low-cost materials – such as leather, plastic, silver, ceramic and zircon – find a large market in Switzerland, especially among younger consumers.*
* Euromonitor International (2017). Jewellery in Switzerland. Available from www.euromonitor.com/.
[ PRECIOUS STONES AND JEWELLERY : A BRILLIANT OUTLOOK AT THE GLOBAL LEVEL ]
5
HONG KONG ( CHINA ) AND MAINLAND CHINA
Hong Kong ( China ) and mainland China are important ex-porters of precious stones and jewellery, with export totals in 2016 of US $ 84 billion and US $ 22 billion respectively. Hong Kong ( China ) is a rapidly growing exporter to China ; Switzerland ; India ; Thailand ; and the United Kingdom, United States and UAE. Hong Kong ( China )’s export bas-ket consists of gold, diamonds and other precious stones, and jewellery. China has shown remarkable growth, from less than US $ 7 billion in exports in 2006 to US $ 22 billion in 2016. China’s major export destinations are Hong Kong ( China ), the United States, Belgium and the UAE.
With imported values of US $ 79 billion and US $ 67 bil-lion respectively, China and Hong Kong ( China ) are two of the most important import markets for the sector. In 2016, China’s top supplier was Switzerland, followed by South Africa, Hong Kong ( China ), Australia, the United States and India. The Chinese import basket includes gold, platinum, diamonds and other semi-precious stones, and precious materials in raw and semi-processed forms. Hong Kong ( China ) imports precious metals and stones for further processing predominantly from India, Switzerland, China, Australia and South Africa. Both China and Hong Kong ( China ) are major purchasers from Switzerland of high-quality cut and trimmed precious stones processed using advanced technology.
While Hong Kong ( China )’s imports in the sector are bal-anced by its exports, in 2016 China had a negative trade balance of $58 billion. This indicates that China is more of a consumer market, whereas Hong Kong ( China ) would be classified as a re-exporting hub for the Asian market. Hong
Kong ( China )’s greatest export destination is the Chinese market, where processed products reach a growing number of high-income, luxury-focused consumers.
Box 2 : Hong Kong ( China ) and China
Hong Kong ( China ) and China as a consumer market
Chinese demand for fine jewellery is growing fast, driven by China’s rapid economic growth. With rising consumer incomes, jewellery is no longer an unaffordable luxury and has become a part of daily fashion considerations. Not only are luxury brands becoming more recognized and finding a growing consumer market, but more affordable jewellery is gaining popularity among millennials. At the same time that fast fashion is demanding cheaper products, high-end diamond jewellery has also gained popularity among millennials. Rings are the most popular type of fine jewellery. The main distribution channel for jewellery in China
remains watch and jewellery special retailers, but e-commerce retailing is emerging.
Fine jewellery is also the most popular segment of the sector in Hong Kong ( China ), where gold products – worn as part of traditions and festivals – remain highly popular. Gold jewellery contributed to more than 50 % of sales in Hong Kong ( China )’s domestic market. Earrings remained the most popular type of costume jewellery in Hong Kong ( China ), due to the ease of pair-ing them with different outfits and their relative affordability. As in China, specialist retailers are the main distribution channel in Hong Kong ( China ), with online sales on the rise.*
* Euromonitor International (2017). Jewellery in China. Available from www.euromonitor.com/.
Photo: ITC
6
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
UNITED STATES
Some of the world’s most renowned diamond mining and processing companies are American-owned. As a re-sult, the United States is one of the largest exporters of diamonds. Other export products include jewellery made of precious stones and metals. The main export desti-nations are re-exporters such as Switzerland and Hong Kong ( China ), as well as India, the United Kingdom, Israel, Canada and Belgium.
As with Switzerland, the United States is known not only as a world exporter of precious stones and jewellery ( US $ 57 billion in exports in 2016 ) but also as a world importer, with imports valued at US $ 65 billion in 2016. India, Israel, Canada, Mexico, Switzerland and Belgium were the main suppliers to the United States market. The United States imports raw and semi-precious stones for further process-ing from developing countries, and also imports finished jewellery from worldwide suppliers. In 2016, the principal im-ported item was semi-processed diamonds, predominantly from India and Israel, which make up more than 35 % of the import basket.
The United States had a negative sector trade balance for precious stones and jewellery of US $ 8 billion in 2016, indicating that imports dominate exports. The United States can be seen as a hybrid consumer and re-exporter of pre-cious stones and jewellery. The country uses advanced technology for further value addition, manufacturing many jewellery brands that supply world markets. At the same time, it is also a major consumer market.
Box 3 : United States
The United States as a consumer market
In a market where consumers are spending more money on experi-ences than goods, the United States precious stones and jewellery sector is declining slightly. Younger consumers interested in fast fashion are showing less interest in jewellery as accessories become less necessary for outfits geared to casual and active lifestyles. The new generation prefers to spend money on mobile phones and other tech items rather than luxury jewellery.A clear trend in distribution is the shift in market share from traditional specialized retailers to online sales platforms. With the rise of e-commerce and the emergence of fast fashion retail-ers in the United States, traditional brick-and-mortar jewellery
retailers are finding it more and more difficult to maintain their businesses. Consumers prefer to shop at fast fashion brand stores where they are able to purchase a complete outfit, including ac-cessories, all at once. Consequently, the growth of fast fashion retailers also supplying jewellery has become a major threat to traditional costume jewellery retailers. United States-made products face fierce competition from cheaper foreign brands. In terms of consumer preferences, gold jewellery outsells silver products, while earrings, necklaces and bracelets are the most popular products in the United States market. The most desirable items are fashionable, affordable and long-lasting jewellery that can be purchased on impulse.*
* Euromonitor International (2017). Jewellery in the USA. Available from www.euromonitor.com/.
Photo: ITC
[ PRECIOUS STONES AND JEWELLERY : A BRILLIANT OUTLOOK AT THE GLOBAL LEVEL ]
7
UNITED KINGDOM
The United Kingdom exported US $ 29 billion of precious stones and jewellery in 2016. The main export destinations were Switzerland, Hong Kong ( China ), the United States, China, Belgium and Germany. Gold dominated the British export basket, followed by worked jewellery, platinum and diamonds. The importance of gold has led to a remarkable export decline since 2013, caused by falling gold prices. While exports stood at nearly US $ 100 billion in 2013, United Kingdom exports in the sector have declined more than a third since then. Many export products are semi-processed and processed precious stone and jewellery items manu-factured using advanced British technology.
With an import value of US $ 71 billion in 2016, the United Kingdom is also one of the largest importers in the sec-tor. The United Kingdom predominantly imported from Switzerland, Canada, South Africa, Hong Kong ( China ), the United States and Australia. The United Kingdom’s import basket consists of precious stones and metals as well as worked products.
With a trade deficit of US $ 42 billion in the sector, imports dominate exports. As a result, the United Kingdom is best viewed as a consumer market rather than a re-exporter of precious stones and jewellery. The United Kingdom imports raw and semi-worked materials for further processing, and following value addition, the finished jewellery products are primarily sold domestically.
Box 4 : United Kingdom
The United Kingdom as a consumer market
Gold is the most popular material for fine jewellery, with a 44 % share of the United Kingdom market. The most popular articles are rings, accounting for 43 % of fine jewellery sales in 2017. They are purchased primarily for weddings and engagements. United Kingdom consumers are willing to spend more on rings because they are meant to last a lifetime. Earrings and necklaces are the most important types of costume jewellery. These articles are most popular as fashion accessories complementing the outfits
of the fast fashion industry. The border between fine jewellery and costume jewellery is continuing to blur ; consumers who typically purchase fine jewellery for a special occasion or as a gift are increasingly buying fine jewellery for themselves. With the trend of mixing high- and low-priced jewellery, both types of jewellery have started to attract a wider range of customers. When it comes to distribution, online sales are increasing. Online shopping is especially suited to costume jewellery, which sells at lower prices and thus carries a lower purchasing risk. Fine jewelelry is still pur-chased primarily in specialized brick-and-mortar retail outlets.*
* Euromonitor International (2017). Jewellery in the UK. Available from www.euromonitor.com/.
INDIA
With US $ 42 billion in exports in 2016, India has established itself as the largest Asian exporter of precious stones and jewellery after the Chinese. India is the world’s most com-petitive producer of polished stones. Its exports have not been affected by the decline in gold prices as much as other countries’. India has strong ties to Asian markets as well as the UAE, which was the largest export destination for India in 2016. India produces some precious and semi-precious stone varieties. The Indian export basket consists of dia-monds, jewellery, gold articles, and other precious metals and stones. India has a long history of jewellery production using its own technology and traditional designs.
While the country exports raw materials as well as pro-cessed jewellery, India is also a growing consumer mar-ket for precious stones and jewellery products. The trade balance showed a comparatively small deficit of US $ 6 bil-lion in 2016. India’s precious stones and jewellery sector imported US $ 48 million in 2016. The main exporters to the Indian market were Switzerland, the UAE, Belgium, Hong Kong ( China ) and the Russian Federation. The main import goods were raw or semi-worked precious stones and met-als for jewellery production. Resources are also supplied domestically ; however, many precious metals and some varieties of semi-precious and precious stones cannot be found in the country.
8
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Box 5 : India
India as a consumer market
Indian consumer preferences have shifted in favour of interna-tional jewellery brands. As a result, many well-known brands have opened branches in major Indian cities. Trends in design have shifted from bulky, traditional jewellery to more lightweight products for everyday use. A major factor influencing this trend is the increasing number of Indian working women who want jewellery appropriate for everyday and business wear. While growth in consumption has slowed recently, India has experi-enced continuous growth in sales over the last several years, as
a result of the country’s remarkable economic growth. Although fine jewellery far outsold costume jewellery, sales of the latter have picked up pace. The most popular type of costume jewel-lery in India remains bracelets, with neckwear and other forms of wristwear also high-selling product categories. Jewellery and watch specialty retailers remain the most common retail channel, as the majority of jewellery retailers throughout the country are small-scale. Family-owned local retailers enjoy the loyalty of their customers, although online shopping is becoming more popular among young professionals.*
* Euromonitor International (2017). Jewellery in India. Available from www.euromonitor.com/.
UNITED ARAB EMIRATES
The UAE is a fast-growing exporter of precious stones and jewellery, with exports valued at US $ 35 billion in 2016. The UAE has close trade relationships with Middle Eastern coun-tries, although its largest export destination for sector prod-ucts is Switzerland, followed by India, Turkey and Belgium. Different unprocessed and semi-processed stones, as well as gold and silver products, make up the majority of the UAE’s sector export basket.
India, Hong Kong ( China ), Turkey, Belgium, Switzerland, the United States and Egypt were the main suppliers of pre-cious stones and jewellery to the UAE, with imports total-ling US $ 38 billion in 2016. As with other countries heavily involved in this sector, the UAE has been affected by gold
price declines since 2013. However, the Emirati market has since stabilized as a result of rapid economic growth. The UAE mainly imports worked jewellery made of precious met-als, and raw to semi-processed precious stones and metals.
The sector trade deficit for the UAE stood at US $ 2 billion in 2017, which indicates a relative balance of sector imports and exports. A large portion of imported goods are intend-ed for domestic buyers, while the UAE’s main exports are raw materials extracted in the country. Domestic demand is growing because of the UAE’s booming economic growth in recent years. At the same time, the country is benefiting from its resource-rich environment, allowing the UAE brand to become established in international markets.
Box 6 : United Arab Emirates
The UAE as a consumer market
Many global brands have entered the UAE market recently, creating stronger competition in the Emirati precious stones and jewellery sector. Sales of jewellery are predominantly seasonal and event-centric. For instance, demand for gold jewellery increases around religious festivals like Diwali and Akshaya Tritiya because of the
large Indian population. Shopping festivals like Dubai Summer Surprises and the Dubai Shopping Festival also boost sales. Many luxury costume jewellery brands have experienced fast retail sales growth as Emirati consumers have become increasingly attracted to international brands and more aware of fashion trends. Jewellery and watch specialty retailers tend to dominate the distribution of fine jewellery, despite increasing online sales.*
* Euromonitor International (2017). Jewellery in the United Arab Emirates. Available from www.euromonitor.com/.
[ AN OVERVIEW OF PRECIOUS STONES AND JEWELLERY IN AFGHANISTAN ]
9
AN OVERVIEW OF PRECIOUS STONES AND JEWELLERY IN AFGHANISTAN
Notable deposits of gemstones in Afghanistan can be found in north-eastern provinces such as Badakhshan, Nuristan, Panjshir, Kunar and Laghman, with several known depos-its in Kabul Province as well. There are four primary gem-stone producing areas : the Panjshir Valley ( emeralds ), the Jegdalek region ( rubies and blue sapphires ), Badakhshan ( lapis lazuli ) and Nuristan ( tourmaline, kunzite, aquamarine, spodumene and beryl ).2
2.– Afghanistan, Ministry of Mines and British Geological Survey ( 2007 ). Minerals in Afghanistan – Gemstones of Afghanistan. Available from www.bgs.ac.uk/afghanminerals/docs/gemstones_a4.pdf.
According to one case study, jewellery making in Afghanistan takes place in small workshops, with skills passed down from master to apprentice. Only in the past 10 years have there been efforts to provide formal education in traditional jewellery artisanship, with the British non-profit Turquoise Mountain a prominent example of an institution serving this purpose. Most jewellery producers are fo-cused on satisfying local demand, although small-scale exports of Afghan jewellery are taking place to such des-tination markets as China, Pakistan, India, Europe and the United States.
KEY CURRENT PRODUCTION STATISTICS
Afghan small-scale artisans produce handmade jewellery with minimum use of machines to cut and polish stones and fix them within a metal framework, which is made by hand with traditional tools. Stones are categorized as precious or semi-precious as delineated in box 7. Current production figures are unavailable but before the civil war it is said that
only emerald production used to be between US $ 8 and US $ 10 million.3 Gold and silver are considered precious metals, while bronze and gelite4 are semi-precious.
3.– Ibid.4.– Opal or chalcedony
Box 7 : Varieties of raw materials
Precious stones Semi-precious stones Metals
Emerald Sapphire Gold
Ruby Amethyst Silver
Spinel Aquamarine Bronze
Turquoise Kunzite Gelite
Garnet
Peridot
Tourmaline
Lapis lazuli
Topaz
Carnelian
Fluorite
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[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
There are 3,000 handicraft shops in Chicken Street in Kabul but disaggregated data is not available. According to the da-tabase of the Afghanistan Women Chamber of Commerce and Industry ( AWCCI ), there are around 20 women-owned or -run jewellery and gemstone retailers in Kabul, Mazar-e-Sharif, Herat and Bamyan. Production capacity and num-bers are not available.
SOCIOECONOMIC IMPACT
The Kabul jewellery production sector is still developing. Workshops are willing to take orders at low per-piece mini-mums ( 20–50 pieces per style ) in order to prove them-selves, grow their businesses and establish Afghanistan as a competitor in jewellery production.5 Overall data – such as the number of producers, retailers and skilled / unskilled workers – is not available, nor is it available for women’s participation. Women are active both as owners and pro-ducers in the last two stages of the value chain : production and selling.
Jewellery making is a core artisanal skill that presents im-mense opportunity for job creation and niche sector growth in Afghanistan. Kabul workshops can meet international
5.– McColm & Company ( 2015 ). Case study : Accelerating value chain development in Afghanistan’s gemstone jewelry sector. Available from www.mccolmandco.com/insights/-accelerating-quality-jewelry-production-in-kabul.
demand for small jewellery manufacturing orders. The chal-lenge for sector producers has been fulfilling large orders while maintaining consistency in quality.6
Skills exist in small jewellery manufacturing, with most workers trained in a traditional manner. One non-government organization, Turquoise Mountain, and one Government institution, a vocational training centre man-aged by the Ministry of Labour, Social Affairs, Martyrs and Disabled ( MoLSAMD ), exist and can be further developed. On the other hand, the skills of workers in the first stage of the value chain – mining – remain extremely underdeveloped.
6.– McColm & Company ( 2015 ). Case study : Accelerating value chain development in Afghanistan’s gemstone jewelry sector. Available from www.mccolmandco.com/insights/-accelerating-quality-jewelry-production-in-kabul
AFGHANISTAN’S EXPORT PERFORMANCE
The Central Statistics Office Year Book provides data on export and import commodities derived from Afghan Customs data. Official Afghan statistics lack export data ( direct data ) relevant to the sector, except for the years 2014–2015, 2015–2016, and 2016–2017, which contain an added item under the label ‘Handicraft’ under export com-modities. However, there is no data disaggregation on the type of handicraft. With this noted, handicraft exports have decreased since 2014, from around US $ 1 million in 2014 to US $ 350,000 in 2015, and then another decline resulting in a mere US $ 42,000 in recorded exports in 2016.7
The World Bank 2004 report Transitional Islamic State of Afghanistan : Mining as a Source of Growth includes the following quote from the Ministry of Mines and Petroleum ( MoMP ) :
Afghanistan has made around US $ 2.75 million worth of exports of stones. Afghanistan does not receive much
7.– Afghanistan, Central Statistics Organization ( 2017 ). Year Book 1395 ( 2016–2017 ).
revenue from the export of its gemstones, as they are ex-ported to Pakistan uncut. Pakistan cuts and processes them for use in jewellery. The high-quality stones are exported from there to other countries and the low quality is used in Pakistan production.
Due to lack of Afghan export data, the following analysis is based on reported data from export destinations ( mirror data ). Historically, the Afghan precious stones and jewel-lery industry is recognized for its fine handicraft tradition, both among domestic buyers and on international markets. Export figures fluctuated between US $ 1 million and US $ 5 million per year until 2011, when, with recognition of Afghan products in major importing markets, the Afghan precious stones and jewellery sector reached an export value of US $ 184 million in 2012 ( see figure 5 ). Because of unreli-able reporting and cross-border smuggling, Afghan figures might be biased. Nevertheless, the greater reach of Afghan products, as well as increasing export volume, indicate sig-nificant growth and visibility of the sector.
Photo: ITC
[ AN OVERVIEW OF PRECIOUS STONES AND JEWELLERY IN AFGHANISTAN ]
11
Afghanistan’s precious stones and jewellery sector not only experienced impressive growth in exported value ( 18-fold increase in the 10 years since 2005 ) but also in export des-tinations. The country exported to just 10 countries in 2005. New Zealand was the largest importer of Afghan goods in the sector in 2005, with US $ 1 million in imports. Ten years later, Afghan precious stones and jewellery reached 21 countries all over the world. The top export destination was the United States, with almost US $ 8 million in export value, followed by the UAE, with an export value of US $ 7 million. France and China also imported more than US $ 1 million from the Afghan precious stones and jewellery sector in 2015.
Afghanistan has a long export relationship with the United States. It has gradually increased its traded volume by gaining market recognition and trust. Similarly, France, Germany and China had only a small volume of trade with the Afghan sector in 2005 but have recently increased their traded volume. The UAE is a newly accessed market with great promise. Its growing demand for precious stones and jewellery is the result of remarkable economic growth. Switzerland is another recently accessed export destination, significantly increasing its traded value since 2012. Although traded volume is still low, many other countries – such as the United Kingdom, Japan, Australia, Canada and Italy – have recently started to establish trade relations with the Afghan precious stones and jewellery sector. Based on the experi-ence with other countries where export ties were established a decade earlier, these newly accessed markets have the potential to become stable and growing importers within a few years.
Figure 5 : Afghanistan’s exports of precious stones and jewellery, 2005–2016 ( US $ millions )
-
20
40
60
80
100
120
140
160
180
200
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source : Trade Map ( 2017 ).
Photo: ITC
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[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Figure 6 : Afghanistan’s top export destinations for precious stones and jewellery, 2005 ( US $ thousands )
0
200
400
600
800
1000
1200
New Ze
aland
United
States
of Ameri
ca
Germany
Thaila
nd
Canada
Polan
dChil
e
Denmark
Guatem
ala
Netherl
ands
Source : Trade Map ( 2017 ).
Figure 7 : Afghanistan’s top export destinations for precious stones and jewellery, 2015 ( US $ thousands )
0100020003000400050006000700080009000
United
States
of Ameri
ca UAEFra
nce
China
Germany
Hong K
ong
Pakis
tan
Switzerla
ndCana
daJap
an
Source : Trade Map ( 2017 ).
Major exported goods of Afghanistan’s precious stones and jewelley sector in 2016 were precious metals and stones in raw and semi-manufactured form. There is no quanti-tative data available from previous years for comparison. As the home of many precious stone and metal mines, Afghanistan serves world markets with its rare, indigenous varieties. Processed and traditional imitation jewellery have only a small share in Afghanistan’s export basket in this
sector. Greater visibility of Afghan handicrafts in world mar-kets would stimulate the Afghan jewellery industry, which employs many women and young Afghans. The majority of precious stones entered markets in France, the United States, Switzerland and Germany for further processing. Switzerland and the UAE were major Afghan gold importers. Processed jewellery is known only in the United States and a few European markets through Afghan diaspora networks.
Figure 8 : Afghanistan’s exported precious stones and jewellery, 2016
Gold (semi-manufactured
forms)43%Rubies, sapphires
and emeralds (worked)
38%
Stones (unworked or simply sawn)
14%
Stones (worked)5%
Imitation jewellery (metal)0% Others
0%
Exported goods, 2016 (total US$ 35.6 million)
Source : Trade Map ( 2017 ).
[ AN OVERVIEW OF PRECIOUS STONES AND JEWELLERY IN AFGHANISTAN ]
13
VALUE CHAIN ANALYSIS
INPUT SUPPLY
In Afghanistan, gemstones are mined in a traditional way using explosives and other primitive methods that destroy the gems’ quality and quantity. The mines are often con-trolled by local warlords, with the labour force consisting of villagers who live close to the mines. The Government has minimal control over these mines and has not been able to implement recent laws. Raw stones are typically trans-ported to cities that are known for trade in particular types of gems and precious stones ; for example, lapis lazuli is transported to Badakhshan and rubies to Kandahar. Some are transported to Kabul’s Kocha-e-Murgha ( ‘Chicken Street’ in Persian ), a famous area for handicrafts and antique shops where gemstone processing and jewellery making often takes place in out-of-sight workshops.
The largest share of gemstones are smuggled into Pakistan. Pakistani producers then cut and polish the stones and sell them to their own jewellery producers or to Afghan jewellery producers. For Afghan miners, smuggling precious stones to Pakistan is the best way to avoid paying royalty fees to the Afghan Government ( which currently stand at 17 % of estimated stone value ) or being asked to formally register a mining operation and comply with mining and tax laws.
The most popular metals are silver matched with semi-precious stones, and gold matched with precious stones. The majority of producers buy the metals from the Kabul markets, which obtain them from India, Pakistan, the Islamic Republic of Iran and the Middle East ( most gold comes from this region ). Afghanistan has a gold deposit in Badakhshan, estimated to hold 2,698 kilograms according to MoMP. According to sector producers, a processing out-let in Badakhshan used to supply gold chips to Kabul but this facility is now closed because of security issues.
The most popular precious stones are emeralds, sap-phires, rubies and spinels. The gemstones used in Afghan jewellery are lapis lazuli, kunzite and tourmaline. In each major urban centre of Afghanistan, jewellery collectors go door-to-door and purchase old pieces of jewellery, which are then sent to Kabul. Craftsmen in Kabul either rework them for sale or disassemble them and use the materials to make new jewellery.
PRODUCTION
Small workshops that employ 1–20 workers buy smaller refined gemstones to produce traditional and non-tradi-tional jewellery in Kabul and some other major cities, such as Balkh, Herat and Kandahar. Workshops and jewellery
making skills are passed down from generation to genera-tion, and many of these workshops have operated for over 50 years ( or longer ).
At the production stage for jewellery, one of the criti-cal raw materials is metal. Metals such as silver, bronze, gold, copper and gilet ( a non-precious metal like brass ) are used for jewellery making. Silver is the most-used metal in general, while gilet is commonly used for non-precious and inexpensive jewellery. Some workshops have traditional gemstone and metal-cutting machines and do half of the work by hand ; others have more modern cutting, melting and moulding machines and do less than half of the work by hand. Challenges at the production stage include find-ing and training skilled workers, sourcing raw materials and dealing with inadequate machinery and erratic ( or non-ex-istent ) electricity.
The list below summarizes some of the key challenges for the sector :
� Lack of institutional training : Most workers learn their skills in workshops as apprentices. Few formal training centres exist.
� Difficulty sourcing raw materials : Maintaining a consist-ent supply can be a problem at times, although the re-sponses of interviewees showed that they can now more easily source them locally. One interviewee mentioned Tajikistan and one mentioned that they used to source materials from Pakistan but not anymore.
� Lack of advanced machinery : Some companies inter-viewed mentioned that they outsource the cutting of stones or the making of parts such as rings because they do not have proper tools and machinery to make them in standard sizes.
� Deficient power infrastructure : Electricity supply is erratic ( especially during the winter ) and many rural areas do not have access to the national power grid.
� Transportation : Shipping products to buyers in overseas markets can be difficult.
Photo: ITC
14
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
PROCESSING
For bespoke jewellery orders, the process starts with select-ing the design and materials, such the type of metal and stones. Once the design, materials and quantity are deter-mined, the customer checks the quality of the stones. Then the moulding of the metal and cutting of the stones takes place. Metal is moulded for rings, earrings, bracelets and necklaces, and then the stone is fitted. Usually about half the work is done by machine and the rest, such as carving and designing in a traditional way, takes place by hand. For general retail sales, the artisan will create new designs, copy old jewellery or look for inspiration on the Internet. Then the same process as above is followed.
DISTRIBUTION
The last stage of the value chain is distribution. Small work-shops are also retailers and even the wholesale orders they get are not for large amounts. Jewellery sales in Kabul main-ly take place on Chicken Street. Herat, Mazar-e-Sharif and Kandahar also have well-known hubs for handmade jewel-lery. Regarding exports from Afghanistan, a smaller volume is sold to India, the United States and Tajikistan. Afghan gemstones are also sold in Dubai. In the majority of cases, Afghan jewellery is exported in retail-ready form.
The most popular metal / gemstone combinations are silver with lapis lazuli, kunzite or tourmaline. For precious stones, the combinations are white gold with emerald, ruby and spinel. Afghan traditional designs are highly valued by international consumers. One recent trend is to redesign or modify traditional designs with the help of international designers. This option is not available to all jewellery mak-ers but only to the few who are connected to the Turquoise Mountain Institute.
Photo: ITC
[ AN OVERVIEW OF PRECIOUS STONES AND JEWELLERY IN AFGHANISTAN ]
15
Figure 9 : Current value chain
Inte
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l mar
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Prod
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Proc
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Dom
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[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
POLISHING THE KNOWLEDGE OF KEY COMPETITIVENESS CONSTRAINTS
Key issues constraining the sector’s ability to com-pete / connect / change
The following section analyses sector challenges across three levels – firm compatibilities ; institutional and trade support ; and national environment, policy and regula-tions. For this analysis, the issues that are crucial for the competitiveness of Afghan exports can be sorted into three dimensions.
Compete : Issues limiting the sector’s capacity to com-pete in national and foreign markets. This includes chal-lenges related to access, inputs, productivity, quality management and complying with standards, and na-tional infrastructure.
Connect : Issues restraining connectivity to suppliers, markets and clients. This dimension includes challeng-es related to market information, marketing and trade promotion, branding and trade agreements.
Change : Issues limiting the sector’s capacity to change, innovate and tap into emerging trends. This dimension relates to challenges to access trained / skilled labour, intellectual property, pre-production, institutional sup-port to innovate, investment promotion and protection, corporate social responsibility, and youth / women’s employment.
COMPETE
Limited access to finance to purchase machinery and inputs degrades the competitiveness of the sector
Difficult access to financial resources for sector enterprises limits the availability of adequate technology and machinery for the mining and processing of precious stones and jewel-lery. Financing is a particular burden for Afghan women, as they rarely hold titles to land, which is a requirement for loan collateral. Most machines and tools needed to quarry and process precious stones and jewellery are expensive. There are no ways to access machinery other than purchasing, since lease or rental of machinery and tools does not exist in Afghanistan. Most modern machinery is imported from foreign countries, which further increases costs.
Restricted access to finance also inhibits input supply. In the case of larger orders, producers are not able to pur-chase enough input materials to supply customers. Because repayment periods are very short, many producers are not able to fill orders despite demand. In addition, many input materials are smuggled to Pakistan for processing and then re-exported back to Afghanistan.
Expanding sector enterprises is difficult to fund, as loans from commercial banks in Afghanistan are very ex-pensive. Interest rates tend to fall between 12 % and 25 %, with required collateral ranging from 100 % to 200 % of the value of the loan. Very few producers have the collateral
to apply for loans under these circumstances, which makes precious stone and jewellery producers dependent on sup-port from third parties. The result is that only participants with initial funding sources ( usually networks of family and friends ) can enter the market.
Value chain segment All segments
Severity ● ● ● ● ●
PoA reference Activities 1.3.1., 1.3.2.
Inconsistent supply of critical inputs hinders productivityThe limited availability of necessary equipment and machin-ery hinders productivity. Many producers use simple tools such as hammers to shape metal rather than modern ma-chines. Some producers of items such as rings and bangles do not even have access to basic equipment to measure sizes in order to align with international sizes and standards. Because moulding and melting machines are rare, outdated methods are used, making production inefficient.
Value chain segment Inputs / production
Severity ● ● ● ● ○
PoA reference Activities 1.4.1. to 1.4.3.
[ AN OVERVIEW OF PRECIOUS STONES AND JEWELLERY IN AFGHANISTAN ]
17
Weak awareness of quality management and cer tification creates difficulties for Afghan precious stones and jewellery when competing on international markets
Current substandard mining and gemstone processing techniques limit the ability of sector enterprises to compete in international markets. Mining of precious materials is not adequately regulated ; as a result, unethical practices and unsafe workplace conditions are common in Afghan mines. At the enterprise level, there is a lack of understanding and implementation of quality management, as well as a lack of awareness of international certifications across the value chain.
At the input level, the use of lower-quality materials re-sults from frequent imports of uncertified Pakistani inputs and lack of access to market information on quality pre-miums. There are no effective measures to prevent smug-gling to and from Pakistan. Low awareness of and limited access to quality certification leads to a failure of sector products to align with international standards. According to the International School of Gemology, the Afghan precious stones and jewellery sector has been overwhelmed with fake stones and metals. Because of limited quality control, fake and real precious stones and jewellery cannot be dis-tinguished in the domestic and international end-consumer markets. A specialized lab for quality control, testing and certification is needed to enforce standards and thereby re-habilitate the reputation of the sector.
Moreover, poor on-site quality control results in frequent mixing of similar stone varieties, leading to uncertainties about the quality, size and grade of Afghan products. There are also variations in quality among Afghan regions, due to lack of standardized national control procedures. A par-ticular problem is the uncontrolled and uncertified recycled materials sourced by input collectors. Such materials lower the quality of the end products.
Limited quality management has already limited the ability of sector enterprises to enter developed markets. Awareness of international standards among producers is constrained by the limited availability and quality of certifying institutions. Investment in quality control infrastructure and awareness-raising campaigns is critical to establish Afghan precious stones and jewellery in international markets.
Value chain segment All segments
Severity ● ● ● ● ●
PoA reference 2.5.1. to 2.5.9.
Insufficient availability of skilled workers hinders sector competitivenessThe majority of jewellers need more training in new technol-ogy and design creation, as well as greater exposure to de-sign and fashion trends. Miners and processors lack training in the use of modern machinery and equipment. A few years ago, a limited number of women were trained by American volunteers in jewellery design and production. A few produc-ers have accessed training in Jaipur, India. Nevertheless, they lack the ability to develop products and use new tech-nology. Limited access to training and information on new designs means that only a few varieties of jewellery design are being offered and they are of lower quality than those of regional competitors.
Value chain segment All segments
Severity ● ● ● ● ○
PoA reference Activities 1.2.1., 1.2.2.
High production costs hinder competitiveness in world marketsThe sector’s competitiveness is constrained by high pro-duction costs throughout the value chain. Limited access to electricity necessitates the use of generators, making operating machinery more expensive. Outdated produc-tion methods keep Afghan production costs above regional levels. The use of old machinery leads to higher electricity costs and inefficiencies in mining and processing of stones for jewellery products.
The dominance of handmade, traditional production can add value to Afghan products but it also adds costs com-pared with competitors using machinery. Therefore, whether or not to rely on handmade production methods is a trade-off between value addition through handmade uniqueness and additional costs throughout the production process. In addition, Afghan workers’ wages are higher than those of their Pakistani counterparts, despite the fact that Pakistani workers are more skilled. Pakistani products cost less due to greater access to modern techniques, a stable electricity supply and lower wages.
Other problems in Afghanistan include the lack of secu-rity and access to transportation infrastructure. For these reasons, operations are not systematic and delays occur throughout the value chain. Such delays and security issues translate into additional costs for the whole sector, lowering the competitiveness of Afghan products.
Value chain segment All segments
Severity ● ● ● ● ○
PoA reference Activities 2.6.1., 2.2.3.
18
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Figure 10 : Problem tree – compete
Com
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[ AN OVERVIEW OF PRECIOUS STONES AND JEWELLERY IN AFGHANISTAN ]
19
CONNECTComplicated expor t permit systems hinder smooth trading of precious stones and jewellery products
Ambiguous rules, procedures and forms needed to obtain export permits hinder smooth transactions in international markets. Forms containing unfamiliar terminology are usual-ly too complicated for ordinary Afghans with little, if any, sec-ondary education. Support during the application process is insufficient, due to the lack of trained Customs staff in ports and airports. Lack of coordination among different ministries involved in Customs operations – including the Ministry of Industry and Commerce ( MoIC ), Ministry of Finance ( MoF ) and MoMP – complicates exporter applications for trading permits. Applicants for trading licences need to reach out to multiple organizations for clearance, making the process unnecessarily complicated and time-consuming.
Value chain segment Marketing / distribution
Severity ● ● ● ● ○
PoA reference Activity 2.4.2., 2.3.3., 2.3.4.
The ability of Afghan enterprises to connect directly to international buyers and maintain relationships is inhibited by weak institutional support and market intelligence
Not enough work has been done on developing and main-taining contacts with international buyers. Nor are there any bilateral agreements related to the precious stones and jewellery sector between Afghanistan and target markets. Given that a significant quantity of Afghan precious stones and jewellery is exported under a foreign label, it is crucial for Afghan exporters to introduce their products directly to global markets.
The sector also lacks market intelligence regarding fash-ion trends and consumer preferences in target markets. Such information would make sector stakeholders more respon-sive to buyer requirements and help exporters and producers make informed production decisions. More efforts are need-ed to disseminate market information through sector associa-tions. A working e-payment system for online sales is also needed ; currently Afghan traders ( in all sectors ) cannot re-ceive credit or debit card payments from international buyers.
Many exporters in the precious stones and jewellery sec-tor complain about not receiving any kind of support from the Government or international community to help them maintain trade relationships and access new markets. The number of commercial attachés is limited, and existing ones lack the capacity and training to effectively help traders
connect to international businesses. Additional institutional support is needed to assist producers to connect with in-ternational buyers and maintain commercial relationships.
Value chain segment Marketing / distribution
Severity ● ● ● ● ●
PoA reference Activities 3.1.1., 3.1.2., 3.2.1.
Insufficient in-market support prevents Afghan companies from creating links with international buyers
Sector enterprises struggle to connect with buyers in interna-tional markets, due in part to insufficient in-market support from relevant institutions. Sector enterprises have particular difficulty participating in international exhibitions and fairs and obtaining short-stay visas for business purposes. More pre-exhibition training is needed. There is neither enough participation in exhibitions nor trainings before exhibitions. When such exhibitions and trainings do take place, they are not organized in a systematic way but rather on an ad hoc basis. Furthermore, ministries and sector associations need to provide more information about exhibitions and interna-tional trade fairs.
Value chain segment Marketing / distribution
Severity ● ● ● ○ ○
PoA reference Activities 3.3.1. to 3.3.3.
Limited branding and promotion of products hinders recognition of Afghan precious stones and jewellery products in international markets
Weak marketing skills among sector enterprises constrain the ability of the sector to create brand differentiation through labelling and promotion of Afghan products. Afghanistan is known for high-quality emeralds, rubies and spinels as well as lapis lazuli ; however, many of the stones are smug-gled to Pakistan for further processing and then sold to the end consumer as Pakistani goods. Because of weak Afghan brand recognition, many Afghan products are be-ing confused with Pakistani goods. The majority of jewellery makers and precious stone traders do not have websites, nor do they use digital marketing to promote the Afghan brand. Catalogues and regular sector publications do not exist. Consequently, the Afghan precious stones and jewel-lery sector struggles to build its brand in global markets.
Value chain segment Marketing / distribution
Severity ● ● ● ● ○
PoA reference 3.4.1. to 3.4.5.
20
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Figure 11 : Problem tree – connect
Conn
ect:
the
sect
or h
as a
poo
r abi
lity
to li
nk to
inte
rnat
iona
l mar
kets
Non-
exis
tenc
e of
an
inst
itutio
n at
the
Afgh
an G
over
nmen
t lev
el to
wor
k on
br
andi
ng a
nd m
arke
ting
of p
rodu
cts
unde
r a s
et o
f crit
eria
Prod
ucer
s ar
e aw
are
of
thei
r bra
ndin
g iss
ues
but u
nawa
re o
f how
to
solv
e th
em
Exhi
bitio
ns a
nd tr
ade
fairs
atte
nded
and
hel
d on
an
ad h
oc b
asis
Smal
l pro
duce
rs a
nd
real
cra
ftsm
en/w
omen
ar
e no
t inc
lude
d in
thes
e ad
hoc
exh
ibiti
ons
Prec
ious
sto
nes
and
jewe
llery
with
Af
ghan
trad
ition
al d
esig
ns m
ade
in
Pakis
tan
and
expo
rted
unde
r its
na
me
Lack
of G
over
nmen
t sup
port
and
willi
ngne
ss to
pre
vent
this
and
take
m
easu
res
Neith
er th
e Go
vern
men
t nor
the
priva
te
sect
or h
ave
a st
rate
gic
plan
to p
rom
ote
the
sect
or
Afgh
an e
mba
ssie
s an
d co
mm
erci
al a
ttach
és h
ave
not
so fa
r wor
ked
to in
form
the
Afgh
an G
over
nmen
t or
prod
ucer
s ab
out t
he
requ
irem
ents
of i
nter
natio
nal
mar
kets
No e
fforts
hav
e be
en ta
ken
to p
rom
ote
Afgh
an
prod
ucts
No s
peci
fic tr
ade
agre
emen
ts fo
r the
sec
tor
exis
t
Wom
en p
rodu
cers
do
not h
ave
acce
ss to
a
baza
ar in
Kab
ul fo
r han
dmad
e je
welle
ry a
nd
ston
es
Wom
en c
anno
t run
sho
ps
and
prod
uctio
n ou
tlets
in
the
publ
ic e
xcep
t in
Kabu
l; ot
her p
rovin
ces
are
alm
ost
impo
ssib
le
Wom
en a
re n
ot
welc
ome
to b
e in
pu
blic
, lac
k ac
cess
to
info
rmat
ion,
and
fa
ce d
iffic
u ltie
s wh
en
com
mun
icat
ing
with
ot
her s
ecto
r st
akeh
olde
rs
No p
rope
r tra
ditio
nal o
r dig
ital
mar
ketin
g fo
r bot
h m
ale
and
fem
ale
prod
ucer
s
[ AN OVERVIEW OF PRECIOUS STONES AND JEWELLERY IN AFGHANISTAN ]
21
CHANGEPoor processing knowledge and skills limit the sector’s capacity to upgrade the value and quality of production
There are no concrete data on skilled and unskilled workers in the sector, but the presence of large numbers of unskilled labourers is commonly responsible for irregular and lower-quality products compared with international competitors. Miners of precious stones do not have proper training in ex-tracting stones or distinguishing between varieties. Blasting in mines and application of outdated quarrying methods lowers the quality and market value of extracted stones.
Processors who cut stones into smaller pieces and ex-tract gems from the stone block lack training and have lim-ited access to modern machines and tools. Consequently, stones and metals are cut and polished using outdated methods, which hurts the value of the final product. Using adequate and modern technology would not only enhance productivity but also contribute to environmental sustain-ability. Using explosives in mines and processing stones with outdated methods wastes stones and metals and low-ers quality.
Many workers need skills diversification in order to expand production capacity and variety. Sector growth is hindered by the paucity of institutions helping produc-ers develop new designs and products by applying mod-ern technology. Access to information on new techniques and existing designs is also limited. Some jewellers have received some training from jewellery companies or insti-tutions such as Turquoise Mountain. Currently, training of workers in design and gemstone cutting takes place in India, Turkey, Thailand and Spain. Nevertheless, in an indus-try where the skill of the jeweller is crucial to the quality and design of the piece, further skills development is needed to upgrade the value and quality of products. As the sector employs a number of women, training programmes need to be tailored to women’s needs.
Value chain segment Processing
Severity ● ● ● ● ●
PoA reference Activities 1.2.3. to 1.2.10.
The ability of sector companies to innovate is constrained by weak managerial skills and limited institutional support
Limited managerial skills constrain entrepreneurial and innovative development of the sector, due to low capac-ity to enhance knowledge and facilitate implementation of new ideas. Decentralized production by small household
producers limits knowledge management and information-sharing between stakeholders. Combined with weak com-munication between producers, this means opportunities for development and implementation of innovative ideas are limited.
Weak institutional support hinders innovation. Many firms complain about not receiving any kind of support from the Government and international community to upgrade pro-duction and sales skills. Very few enterprises have received support to upgrade machinery or train staff in improved pro-duction and managerial skills.
Value chain segment All segments
Severity ● ● ● ● ○
PoA reference Activities 1.1.1., 1.1.2., 2.4.1.
Operational obstacles such as limited access to land and weak infrastructure hinder sector expansion
Access to land is a major challenge in Afghanistan, limiting the development of consolidated production sites such as industrial parks. The Government regulates the leasing and renting of land and production spaces. The current system lacks clarity on property rights, and land conflict resolution is weak. Moreover, land ownership is highly informal be-cause there is a virtual absence of authentic title deeds. Such circumstances severely constrain producers when moving workshops from one location to another to access better facilities. They also hinder business expansion into additional processing activities ; for example, establishing workshops equipped with modern technology.
Difficulties with licensing for artisans hinder develop-ment. MoCI provides licences for businesses in all sectors. Municipalities provide licences and permits to shops and outlets selling to the public. Craftsmen / women, such as jewellery makers, tailors and other handicraft producers have no option but to get permits from both MoCI and their municipality, which complicates operations. The majority of sector stakeholders would prefer a separate licensing pro-cedure by sector, so that jewellery producers would not have to deal with municipal governments.
The sector has a high ability to create jobs for wom-en and men in rural and urban areas, thus contributing to higher living standards. Removing operational obstacles to expanding the precious stones and jewellery sector would unlock its capacity to contribute to poverty alleviation, gen-der inclusiveness and regional integration.
Value chain segment All segments
Severity ● ● ● ● ●
PoA referenceActivities 2.1.1., 2.1.2., 2.1.3., 2.2.1.,
2.2.2., 2.2.4., 2.3.1., 2.3.2.
22
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Figure 12 : Problem tree – changeCh
ange
:wea
kin
stitu
tiona
land
infra
stru
ctur
alsu
ppor
tlim
itth
ese
ctor
’sab
ility
toin
nova
tean
dex
pand
Lim
ited
abili
ty o
f pro
duce
rs a
nd
entre
pren
eurs
in th
e se
ctor
to in
nova
te,
dive
rsify
and
exp
and
Lack
of
entre
pren
eursh
ip an
d bu
sines
s man
agem
ent
traini
ng
Limite
d ex
posu
re to
ne
w tec
hnol
ogy i
n th
e sec
tor
Neith
er G
over
nmen
t no
r priv
ate in
stitu
tions
ex
ist to
pro
vide
regu
lar tr
aining
pr
ogram
mes
and
expo
sure
op
portu
nities
Poor
lice
nsin
g sy
stem
No c
oord
inatio
n am
ong
Gove
rnm
ent
agen
cies d
ealin
g wi
th p
rodu
cers
and
expo
rters
of
prec
ious
ston
es an
d jew
eller
y
No li
cenc
es fo
r jew
eller
y-m
aking
ex
ist
War
lord
s’ a
cces
s to
min
es a
nd
smug
glin
g of
pro
duct
s to
Pa
kista
n
Warl
ords
and
powe
rful f
igur
es at
m
ining
sites
hav
e ga
ined
mor
e pow
er
in re
cent
years
Gove
rnm
ent i
s ta
king
a lo
ng ti
me
to p
ass
the
Min
eral
s La
w
Prec
ious
sto
ne
extra
ctio
n is
unet
hica
l an
d br
ings
dow
n th
e qu
ality
of t
he s
tone
s
Secu
rity
issue
s hav
e fu
rther
incr
ease
d sm
uggl
ing an
d we
aken
ed
Gove
rnm
ent c
ontro
l
Corru
ptio
n an
d no
n-tra
nspa
rent
ta
x sys
tem
s
Lack
of a
ware
ness
on
the p
art o
f Gov
ernm
ent
empl
oyee
s abo
ut
mod
ern
syste
ms a
nd
how
to fa
cilita
te im
plem
entat
ion
Addi
ng ta
xes
and
roya
ltypa
ymen
ts m
akes
doi
ng
busin
ess
com
plic
ated
.
Lack
of a
ware
ness
of
prod
ucer
s and
lim
ited
num
ber o
f ex
porte
rs
Lim
ited
avai
labi
lity
of
infra
stru
ctur
e su
ch a
s la
nd,
prod
uctio
n sp
ace,
ele
ctric
ity,
post
offi
ces
and
e-pa
ymen
t
Land
and
Gove
rnm
ent
spac
es ar
e ren
ted
in a c
orru
pt
man
ner
High
cos
t of p
rodu
ctio
n ca
used
by
high
rent
s an
d di
fficu
lty m
ovin
g, p
lus
inst
abili
ty o
f acc
ess
to
land
Poor
func
tiona
lity
of p
ost o
ffice
s an
d e-
paym
ent
limits
onl
ine
sales
Incon
sisten
t and
ex
pens
ive su
pply
of el
ectri
city (
use
of g
ener
ators
is ex
pens
ive to
o)
Thro
ugho
ut th
e va
lue
chai
n, w
ith n
o or
gani
zed
asso
ciat
ion
to lo
bby
for t
his
sect
or, t
he A
fgha
nist
an C
ham
ber o
f Com
mer
ce a
nd In
dust
ries
(ACC
Ihas
pai
d at
tent
ion
to la
rger
pr
oduc
ers
and
expo
rters
of s
tone
s su
ch a
s m
arbl
e, a
nd th
e Fe
dera
tion
of A
fgha
n Cr
afts
men
and
Tra
ders
(FAC
T) d
oes
not h
ave
a st
rate
gic
advo
cacy
pla
n fo
r var
ious
cla
sses
of
craf
tspe
ople
suc
h as
jewe
llery
mak
ers.
AW
CCI i
s ne
wly
esta
blish
ed. T
he P
reci
ous
Ston
e Un
ion
(PSU
) is
as w
ell n
ot w
ell o
rgan
ized.
‘Leg
al p
roce
dure
s ta
ke u
s 10
day
s an
d we
hav
e to
mak
e lo
ts of
pa
ymen
ts to
o, w
here
as if
we
send
it to
Pak
istan
and
it is
shi
pped
fro
m th
ere
it ta
kes
only
4–5
days
and
cos
ts le
ss’
[ MARKETS FOR AFGHANISTAN’S PRECIOUS STONES AND JEWELLERY SECTOR ]
23
MARKETS FOR AFGHANISTAN’S PRECIOUS STONES
AND JEWELLERY SECTOR
SHINY FUTURE FOR THE PRECIOUS STONES AND JEWELLERY INDUSTRY AND TRADE
The global precious stones and jewellery sector has re-mained resilient even with adverse economic conditions. The jewellery subsector experienced the fastest growth of global sales of personal accessories in 2016. Fine jewel-lery accounted for the largest share ( 87 % ) of total jewellery sales in 2016. Increases in global demand for jewellery are driven by growth in consumption in South-East Asian mar-kets, particularly for fine jewellery. Among the principal Asian markets, India and China account for the largest share of regional demand for jewellery. Other emerging markets in South-East Asia should be explored, as they offer significant opportunities for Afghan jewellery because of proximity and growing ties with these markets.
MARKET SEGMENTATION
The jewellery market is highly fragmented at the global level, with 80 % of jewellery sold without a brand. The share of branded jewellery in the total market is expected to increase.
According to the Centre for the Promotion of Imports from Developing Countries ( 2015 ), the jewellery market can be subdivided into three main categories : fine jewel-lery, bridge jewellery and costume jewellery. Fine jewellery, a growing market, refers to jewellery made with precious metals such as gold and precious gemstones such as rubies, emeralds and sapphires – the big three coloured gems. Bridge jewellery is defined as jewellery designed with more affordable materials, such as gold and silver metals and alloys, and lower-priced gemstones, including zirconia and glass. Finally, costume jewellery, the least expensive segment, is made with non-precious and / or semi-precious metals and gemstones, such as synthetic crystal.
Photo: ITC
24
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Figure 13 : Jewellery segmentation and indicative prices
Fine jewellery
Bridge jewellery
Costumejewellery
PPrriiccee RRaannggee: EUR 400–50,000
MMaatteerriiaallss: Gold, platinum, other precious metals and precious gemstones
PPrriiccee Raannggee: EUR 100–400
MMaatteerriiaallss: Gold, silver and their alloys; non-precious metals and alloys, lower-priced gemstones (e.g. zirconia, natural and synthetic crystal, glass, Swarovski Elements)
PPrriiccee Raanggee: up to EUR 100
MMaatteerriiaallss: non-precious, semi-precious materials and gemstones (leather, glass, synthetic crystals, Swarovski Elements)
20% branded
80% unbranded
Source : Centre for the Promotion of Imports from Developing Countries.
FOLLOWING THE LATEST TRENDS
The global jewellery sector is evolving rapidly. Changes in-clude further consolidation of a handful of global players, increasing demand in emerging markets and growth of new distribution channels.
INTERNATIONALIZATION OF BRANDS
Although the jewellery industry is predominantly local, it is expected that a few thriving national or regional brands will further capture and consolidate expansion into global mar-kets. One of the main strategies for jewellery houses will be acquisition of local players. Branded jewellery accounts for roughly 20 % of global jewellery sales. This proportion is expected to continue expanding in the next few years, to as much as 40 % of the global market by 2020. The growth of branded jewellery is driven by emerging-market consumers and young consumers, among others.
E-COMMERCE IS THE FASTEST-GROWING CHANNEL FOR JEWELLERYJewellery distribution channels are also experiencing a reconfiguration as Internet retailing continues to grow. There are substantial variations in the use of e-commerce,
depending on region, brand and type of jewellery. For ex-ample, sales outlets for fine jewellery are expected to remain largely unchanged, as brick-and-mortar stores are consid-ered more reliable for expensive items. Online sales of fash-ion jewellery are expected to increase slightly. Affordable branded jewellery will probably have the largest increase in online sales.
APPEALING TO YOUNG AUDIENCES REQUIRES PRODUCT DEVELOPMENT AND AN ACCELERATION OF SUPPLY CHAIN PROCESSES
As mentioned above, young audiences will be among the main drivers behind the increasing consumption of brand-ed jewellery. ‘Fast fashion’, largely associated with millen-nial shoppers, offers a blueprint for the jewellery industry. In this type of retailing, products can go from concept to store shelves in a month. Firms will have to react to trends quickly and accelerate their product development cycle. In the future, millennials are also expected to be a key target audience for fine jewellery. Innovations in materials and con-temporary design will be important in targeting this cohort within the fine jewellery market segment.
[ MARKETS FOR AFGHANISTAN’S PRECIOUS STONES AND JEWELLERY SECTOR ]
25
PRECIOUS OPPORTUNITIES : CONSOLIDATED AND EMERGING MARKETS
The following analysis is divided into two broad phases : one related to the immediate, short-term perspective and the other to the medium-to-long term outlook, when it is expected that a significant portion of the NES and the sec-tor PoA will have been implemented. This phased approach is aimed at alignment with the evolving capacities of the sector’s trade and investment support institutions and en-terprises as NES implementation moves forward.
SHORT-TERM PRIORITIES ( 1–3 YEARS )
Short-term priorities are product–market combinations which are exporting well but could either : a ) be better per-forming in existing markets with implementation of shorter-term improvements recommended in this Strategy ; or b ) be translated into quick success with promising markets through variations on successful products.
Domestic market
Afghanistan faces fierce competition in its domestic market by – mostly – informally imported jewellery products from neighbouring and international producers. Imported jewel-lery competes on design with locally produced handicrafts, rather than on the authenticity of the semi-precious and precious stones being used. Traditional outlets and Kabul’s famous Chicken street retailers are the main distribution channels in the domestic market.
India
India
Mandatory market requirements
• Permission from the Ministry of Environment, Forest and Climate Change is needed to import precious metals, imita-tion jewellery and gemstones
• Kimberley Process Certificates are issued, mainly to prevent import of conflict diamonds
India presents a highly competitive and fragmented land-scape in the jewellery sector, as a large number of domestic jewellery brands operate and compete in this market. India is a leading player in the global precious stones and jewellery sector. Indian designs are intricate and hence consumers prefer to purchase luxury jewellery products domestically. Sales are led by the Indian company Kalyan Jewellers.
Indian consumers consider luxury goods, including jew-ellery, an investment. For this reason, they place a greater emphasis on the brand name and its heritage when acquir-ing these products. Jewellers’ brands are promoted through
billboards as well as print media such as fashion magazines and local newspapers.
The luxury jewellery segment is expected to continue its strong growth in the Indian market, with sales expected to reach INR 74 billion ( US $ 1.13 billion ) in 2021. The men’s luxury jewellery segment is expected to grow fastest, driven by an increasing focus on jewellery as a fashion statement among Indian men. Indian consumers are expected to shift gradually towards lighter jewellery and away from heavy, bulky items. Indian customers prefer gold jewellery, and India accounts for about 27 % of the global gold jewellery market. However, it should be noted that India imports only modest amounts of gold jewellery – mostly high-end or ma-chine-made – because handmade jewellery is India’s area of expertise. Brick-and-mortar stores will remain the domi-nant outlet for luxury jewellery products, while e-commerce is expected to continue as a niche market over the next few years.
India is currently an important market for exports of Afghan-made jewellery. Certain regions such as South India offer additional opportunities. Because of increasing dis-posable income among consumers in this region, sales of innovative imported products are expected to grow. Indian jewellery makers are proficient in traditional designs but de-sign-led innovations could open opportunities for Afghan exporters.
Photo: ITC
26
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Box 8 : Export potential in India
Export potential in India of selected products
International Trade Centre ( ITC ) analysis on the export potential of Afghan products reveals that India is, by far, the market with the greatest untapped potential. Afghan exporters can benefit from the significant size and expected growth of the Indian market, as well
as tariff preferences. Already existing strong trade links between the two countries will open up further opportunities. More than 95 % of the total export potential in India currently remains unused for worked rubies, sapphires and emeralds, as well as other semi-precious and precious stones, both worked and unworked. The potential additional exports equals US $ 6.6 million.*
India: HS 710391– Rubies, sapphires and emeralds, sorked, whether or not graded, but not strung, mounted or set, rubies, sapphires and emeralds, worked, ungraded, temporarily strung
India: HS 710310 – Precious stones and semi.precious stones, unworked or simply sawn or roughly shaped, whether or not graded
MARKET ENTRY REQUIREMENTS
UNTAPPED EXPORT POTENTIAL DEMAND
USD 3,856 tsdUSD 532.8 mn
2011-2015
2020
53%
APPLIED TARIFF
Afghanistan: 0% Ø other suppliers: 9%
Tariff advantage: 9pp
COMPETITION
Concentrated
equivalent suppliers
Main suppliers: Hong Kong, China, United Arab Emirates, Thailand
• Labelling requirements• Packaging requirements• Registration requirements for importers for TBT reasons
(Original documents available at www.macmap.org)
MARKET ENTRY REQUIREMENTS
UNTAPPED EXPORT POTENTIAL DEMAND
USD 2,748 tsdUSD 205.2 mn
2011-2015
2020
53%
APPLIED TARIFF
Afghanistan: 0% Ø other suppliers: 7%
Tariff advantage: 7pp
COMPETITION
Concentrated
equivalent suppliers
Main suppliers: Hong Kong, China, Zambia, Thailand
• Labelling requirements• Packaging requirements• Registration requirements for importers for TBT reasons
(Original documents available at www.macmap.org)
UNITED VALUERelative index: 0.02
* Source : ITC ( 2017 ).
MEDIUM-TO-LONG TERM ( +3 YEARS )
The markets listed in the short-term section above also have export potential in the medium-to-long term, unless specified otherwise. However, additional market research, product development and Strategy implementation would be required and is unlikely to be completed in less than two years.
United States
United States
Mandatory market requirements
• Commercial imports of diamonds, jewellery, pearls, and pre-cious and semi-precious stones valued at US $ 2,500 or more require additional Customs clearance steps
• A Customs Bond CBP Form 301 is required for all formal entries• Suppliers of children’s plated metal jewellery and other children’s
items ( such as rattles ) must provide proof of the lead-content testing and certification required of manufacturers and direct importers of children’s jewellery
[ MARKETS FOR AFGHANISTAN’S PRECIOUS STONES AND JEWELLERY SECTOR ]
27
The United States jewellery sector is also highly competi-tive, as international and national players, as well as small and large manufacturers, are present in this large market. Estimates indicate that the average American household spends roughly US $ 600 annually on fine jewellery and watches. The top buyers of fine jewellery, excepting watch-es, are millennials, aged 24–35. The fine jewellery segment, paired with technology, offers opportunities to engage mil-lennial consumers.
The costume jewellery sector is expected to follow a ‘fast fashion’ path similar to the apparel sector. Major dis-tribution channels will be multi-brand boutiques, followed by online retailers. Rings and earrings are expected to be the leading segment in the costume jewellery market. Because of its convenience, online retailing will increase
in the coming years in market segments such as costume jewellery. E-commerce will also be driven by the increasing purchasing power of young consumers who are digital na-tives. E-commerce will become more price competitive as more retailers use this buying platform.
The United States offers opportunities for Afghan jewel-lery exporters. Demand for coloured stones has remained stable, particularly in the flourishing fine jewellery segment, which uses high-quality gems as well as unique or rare stones sought by collectors. To tap into opportunities at the lower end, which also presents a healthy outlook, marketing focus should be on gem colour rather than type. Thus, tour-maline, widely used in Afghan jewellery, can be marketed to the more price-conscious segment of the United States market.
Box 9 : Export potential in the United States
Export potential in the United States of selected products
Afghanistan currently exports both precious stones and jewellery to the United States market, but the share of worked jewellery remains comparatively small. ITC analysis predicts a 19 % increase
in demand for jewellery articles in the United States market through 2020. Silver-based jewellery is a feasible option with good pros-pects for export diversification. Afghanistan could also benefit from the United States tariff advantage of 4 % on average over competitors in Thailand, China and India.*
MARKET ENTRY REQUIREMENTS
DEMANDPRODUCT DIVERSIFICATION RANK
USD 2.1 bn2011-2015
2020
19%
157/3,828
APPLIED TARIFF
Afghanistan: 0% Ø other suppliers: 4%
Tariff advantage: 4pp
COMPETITION
Concentrated
equivalent suppliers
Main suppliers: Thailand, China, India
• Various measures apply. For more information, please view http://www.macmap.org/CountryAnalysis/NTM/LinksResults.aspx?country=SCC842
* Source : ITC ( 2017 ).
28
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
EU
EU
Mandatory requirements Non-mandatory requirements
• General product safety – applicable to all products• Chemicals – as jewellery is usually worn on the skin,
the use of hazardous chemicals is restricted• Convention on International Trade in Endangered Species
– applicable to products made from wild plants and animals• Hallmarks – applicable to gold and silver jewellery in some
countries
• Two retail initiatives have gained ground, particularly in western European countries :
• Business Social Compliance Initiative and Ethical Trading Initiative• Others : International Council on Mining and Metals ( sustainable
mining ), Responsible Jewellery Council and the Initiative for Responsible Mining Assurance.
A competitive market, the European jewellery sector is char-acterized by fierce competition from countries with estab-lished reputations, such as France and Italy, particularly for fine jewellery. Nonetheless, the EU offers significant oppor-tunities for costume and bridge jewellery. To tap into these market segments, Afghan exporters will have to compete with manufacturers from other developing countries such as China, Malaysia and Mauritius.
Niche products hold the best opportunities for Afghan jewellery exporters. Although niche products are sold in lower volumes, they offer better margins because the added value and labour intensity are higher. Niche designs that
could be profitable for Afghan jewellery makers include customizable jewellery, storytelling ( socially conscious ) de-signs, and designs with a local or ethnic touch.
Of critical importance are buyer requirements in European markets. In addition to legislative requirements to protect the health and safety of end users, certain European buyers may impose codes of conduct related to jewellery manufacturing conditions or environmental performance across the supply chain. Intellectual property rights are also regarded as crucial in creative sectors such as jewellery. Lastly, European markets hold high standards regarding product consistency from suppliers.
Requirements for jewellery in the EU market
Legal requirements – ‘musts’
• General product safety : all products entering the EU market must be safe to use ( General Product Safety Directive ).
• Chemicals : the EU has restricted a great number of chemicals in products that are marketed in the EU, restricted chemicals are listed in the Registration, Evaluation, Authorization and Restriction of Chemicals Regulation ( European Commission ) 1907/2006.
• Metals : The EU has restricted the use of certain heavy metals to avoid allergic reactions : » Cadmium and its compounds in bracelets, necklaces, rings, piercing jewellery, wrist watches,
wristwear, brooches and cufflinks » Nickel in in earrings, necklaces, bracelets, chains, anklets, finger rings, wristwatch cases, watch
straps and tighteners » Lead and its compounds in bracelets, necklaces, rings, piercing jewellery, wristwatches, wristwear,
brooches, cufflinks and any individual part or component.• Restriction of azo dyes in textiles and leather.• Restriction of chromium VI in leather.• Non-usage of parts of wild plants or animals from endangered species under the restrictions of the
Convention on International Trade in Endangered Species.• Hallmarks for gold and silver jewellery : in some member states of the EU, control and hallmarking of
every article by an independent body is compulsory.• General requirements on packaging and liability.
Non-legal requirements – ‘good to have’
• Sustainable performance : EU buyers appreciate a good story.• Fair trade concept : niche initiative, which supports fair pricing and improved social conditions for
producers and communities.• Fair and responsible practice in the whole jewellery supply chain respecting human rights ( e.g.
Fairgold, Fairmined, Oro Verde ).• Environmental awareness.• Fair wages.• Traceability.• Greenpeace standard – in addition to the Regulation on Registration, Evaluation, Authorization and
Restriction of Chemicals standard – The Detox Campaign for a toxic-free future.
[ MARKETS FOR AFGHANISTAN’S PRECIOUS STONES AND JEWELLERY SECTOR ]
29
UAE
UAE
Mandatory market requirements
• Kimberley Process Certificates are issued, mainly to prevent conflict diamonds
• A duty of 5 % is imposed on gold jewellery
The UAE represents a significant opportunity for the Afghan jewellery sector because of its market proximity and cul-tural affinity. Moreover, the UAE is a major exporter and re-exporter worldwide. Dubai is a supply hub for the Middle Eastern jewellery market. The main suppliers are from Saudi Arabia, India, Pakistan, Thailand and Italy, among others. Major companies operating in this market include Al Ruwais Jewellery, Asia Jewellery, and Motiwalla Jewellery. Several
international fairs and exhibitions are held in the UAE market, including Dubai International Jewellery Week.
In the costume jewellery segment, there are well-estab-lished luxury brands as well as mass-market brands that provide competitively priced products. Costume jewellery suppliers seek to capture increasingly savvy consumers. In fine jewellery, UAE consumers show preferences for solitaire diamonds as well as coloured stones such as emeralds. Consumption of the latter is also driven by young consum-ers who prefer precious stones over gold-based jewellery. Afghanistan emeralds are considered among the finest in the world, and the abundance of this natural resource gives Afghan traders a competitive edge in the market. Precious stones and jewellery are sold through a wide variety of distri-bution channels, including exclusive showrooms, the Dubai Gold Souk and online retail.
Box 10 : Export potential in the UAE
Export potential in the UAE of selected products
Similar to the United States market, the UAE has untapped oppor-tunities in worked jewellery. Afghanistan has already established trade relationships in the UAE but worked jewellery represents
only a small share of its export basket. According to ITC analysis, the UAE market for jewellery is expected to grow by 24 % through 2020. The Emirati market has space for new Afghan suppliers to enter a market currently dominated by Indian exporters.*
DEMANDPRODUCT DIVERSIFICATION RANK
USD 262.3 bn2011-2015
2020
24%
174/3,646
APPLIED TARIFF
Afghanistan: 5% Ø other suppliers: 5%
Tariff advantage: 0pp
COMPETITION
Concentrated
equivalent suppliers
Main suppliers: India, Italy, Pakistan
United Arab Emirates: HS 711311 – Articles of jewellery and parts thereof, of silver, whether or not plated or clad with other precious metal (excluding articles > 100 years old)
• Testing requirement• Inspection requirement• Marking requirements• Product identity requirement• Product quality of performance requirement• Import monitoring and surveillance requirements and other automatic licensing measures• Labelling requirements
(Original documents available at www.macmap.org)
MARKET ENTRY REQUIREMENTS
* Source : ITC ( 2017 ).
Photo: ITC
[ STRATEGIC OPTIONS FOR REVIVING AND PROMOTING AFGHAN PRECIOUS STONES AND JEWELLERY ]
31
STRATEGIC OPTIONS FOR REVIVING AND PROMOTING
AFGHAN PRECIOUS STONES AND JEWELLERY
VISION
This sector is united by the following vision :
“ Precious stones and jewellery : revealing Afghan beauty
to international markets ”In order to achieve this vision, the following main strategic objectives are proposed :
STRATEGIC OBJECTIVE 1 : INCREASE PRODUCTIVE CAPACITY WHILE SUPPORTING DIVERSIFICATION AND ENTREPRENEURSHIP.
To develop production capacity and diversification for in-creased sales in local and international markets, Afghanistan needs to develop skills throughout the value chain. The fol-lowing issues especially must be addressed :
� Miners are completely unprofessional, and in the past 15 years, MoMP has taken no action to improve the situa-tion. There is an urgent need to train miners to stop using explosives and outdated extraction tools that decrease the quality and value of gemstones.
� Entrepreneurs need regular business training and wider exposure in order to feel equipped to operate and expand their businesses.
� At present, production workers are being trained in the traditional way. Each company trains its workers in cut-ting, polishing, moulding and other facets of jewellery making. An institution is needed to provide standard courses and the certification needed to enhance the credibility of the sector.
Access to finance is another critical requirement to enhance production capacity. Lack of financing restricts both men and women in the sector, in different ways. The sector needs to increase advocacy with the Government to provide loans with lower interest rates, decreased or different types of collat-eral and longer repayment periods, including a grace period.
Photo: ITC
32
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Figure 14 : Future value chain – strategic objective 1
Prod
uctio
nAs
sem
bly
Proc
essi
ngDi
strib
utio
nDo
mes
tic m
arke
t
Inpu
t
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e M
ines
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ade
for s
tone
min
ing
Prec
ious
met
als
for j
ewel
lery
pro
duct
ion
Desi
gn
Unsk
illed
labo
ur
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ston
e an
d m
etal
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ting
mac
hine
Mel
ting
and
mou
ldin
g m
achi
ne
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ited
elec
trici
ty /
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r
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ryin
g(M
inin
g)•
Min
ers
are
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rds
and
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gers
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ng c
lose
by
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es•
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rnm
ent l
ack
in c
ontro
l ov
er m
ine
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spor
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nby
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ers
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ties
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rter
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estic
proc
essi
ngfa
ctor
ies
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n re
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th s
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ge a
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work
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/ fa
ctor
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ed
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ng /
refin
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t
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hing
/ Sh
apin
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reat
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ket
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oms
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e(m
inor
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tom
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e pa
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nly
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inor
ity o
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ods
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ectio
n
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ing
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ializ
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rsifi
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•Pr
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emi-p
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ous
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es
•Go
ld•
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tion
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llery
•Di
amon
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Artic
les
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ewel
lery
and
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ts
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ng in
sm
alle
r pie
ces
Old
piec
eco
llect
ors
in K
abul
, Maz
ar-e
-Sh
arif,
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yan,
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nduz
Dom
estic
jewe
llery
prod
ucer
sW
orks
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em
ploy
ing
1-20
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kers
in
Kabu
l, Ba
lkh,
Her
at, K
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ting
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ldin
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ting
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arke
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hine
buy
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pany
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sure
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its
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ning
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kille
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iner
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ficat
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and
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ing
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ning
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tre fo
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sign
and
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ting
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rato
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r qu
ality
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Mac
hine
buy
ing
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pany
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sure
vis
its
Inte
rnat
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l
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dard
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llery
des
ign
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ness
and
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eneu
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p tra
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ncia
l tra
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gfo
r pro
duce
rs a
nd p
roce
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blis
hmen
t of f
inan
cial
pro
gram
mes
and
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s fo
r sec
tor a
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omen
Data
col
lect
ion
(em
ploy
ee, p
rodu
ctio
n, c
ertif
icat
ion,
etc
.)
[ STRATEGIC OPTIONS FOR REVIVING AND PROMOTING AFGHAN PRECIOUS STONES AND JEWELLERY ]
33
STRATEGIC OBJECTIVE 2 : IMPROVE THE REGULATORY FRAMEWORK AND INFRASTRUCTURE SUPPORT
The most complicated problem in this sector is the need for mining regulations and lack of monitoring of existing mining laws, which has led to a tremendous waste of Afghanistan’s mineral resources and to smuggling from Afghanistan to Pakistan. The sector would benefit greatly from simpler processes and rapid implementation of mining laws. The current means of extraction result in large losses for Afghan producers and the Government.
This strategic objective also involves tackling the issues of multiple licensing and multiple taxation. Improving ac-cess to quality testing and certification will also be crucial
for the sector. This will entail establishing standards for this sector and laboratories focusing on the sector, and provid-ing appropriate training to technical staff to support com-pliance with mandatory and buyers’ requirements in target markets.
Overall, there is a need to strengthen the advocacy ca-pacity of sector groups such as AWCCI, the Afghanistan Chamber of Industries and Mines ( ACIM ), ACCI, FACT and PSU. A committee with representatives from each of these entities can use the strategies outlined in this report to guide their advocacy work.
Photo: ITC
34
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Figure 15 : Future value chain – strategic objective 2Pr
oduc
tion
Asse
mbl
yPr
oces
sing
Dist
ribut
ion
Dom
estic
mar
ket
Quar
ryin
g(M
inin
g)•
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ers
are
warlo
rds
and
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ng c
lose
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rnm
entl
ack
in c
ontro
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er m
ine
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spor
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rter
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oms
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e ru
n th
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n
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arts
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icen
ses
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ng in
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ces
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ors
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abul
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estic
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ploy
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kers
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l, Ba
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at, K
anda
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g
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ting
/ mou
ldin
g / c
arvi
ng
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ksho
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hing
/ Sh
apin
g / T
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stan
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oduc
ers
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arke
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ion
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dia
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Esta
blis
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t of
one-
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p
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plifi
catio
n of
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xatio
n an
d fe
e sy
stem
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aisin
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ogra
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n pe
rmits
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ees
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d m
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ace
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essi
onal
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ing
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ces
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ss to
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ctric
ity
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rt su
ppor
t for
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Es
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ymen
t pla
tform
Join
t adv
ocac
y co
mm
ittee
com
pris
ing
sect
or a
ssoc
iatio
ns, F
ACT,
AW
CCI,
ACIM
, ACC
I
Supp
ort w
omen
Stra
tegy
for l
obby
ing
and
advo
cacy
Inpu
t
Ston
e M
ines
Gren
ade
for s
tone
min
ing
Prec
ious
met
als
for j
ewel
lery
pro
duct
ion
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gn
Unsk
illed
labo
ur
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ston
e an
d m
etal
cut
ting
mac
hine
Mel
ting
and
mou
ldin
g m
achi
ne
Lim
ited
elec
trici
ty /
powe
r
[ STRATEGIC OPTIONS FOR REVIVING AND PROMOTING AFGHAN PRECIOUS STONES AND JEWELLERY ]
35
STRATEGIC OBJECTIVE 3 : CREATE AND PROMOTE AN AFGHAN PRECIOUS STONES AND JEWELLERY BRAND
A major requirement to ensure the long-term sustainability of the sector is properly branding and promoting the ‘Made in Afghanistan’ or ‘Product of Afghanistan’ brand on a global scale. Through this strategic objective, long-term marketing and branding strategies will be developed with the full par-ticipation of the private sector.
Individual enterprises with potential to export need help to develop individual marketing and promotion plans and materials. They can also be strategically supported to make connections with buyers and develop long-term relationships.
Women need special assistance to improve access to local and international markets, including long-term training and coaching in export management, financial management and order management. They also need special measures to access local markets, either through outlets or partner-ships with men who would sell for them on a regular basis.
‘I was astonished when a visitor approached me in my stall at an international exhibition and picked up the emerald and asked: “Is this emerald from Panjshir Pakistan?”
‘I felt more determined to work from Afghanistan and for Afghanistan to change this kind of misperception.’
- Nahid Hamidi, a female precious stone and jewellery company owner
Photo: ITC
36
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Figure 16 : Future value chain – strategic objective 3
Quar
ryin
g(M
inin
g)•
Min
ers
are
warlo
rds
and
villa
gers
livi
ng c
lose
by
min
es•
Gove
rnm
ent l
ack
in c
ontro
l ov
er m
ine
Tran
spor
tatio
nby
min
ers
toci
ties
Expo
rter
Dom
estic
proc
essi
ngfa
ctor
ies
Ofte
n re
tail
shop
s wi
th s
tora
ge a
nd
work
shop
/ fa
ctor
y at
tach
ed
Cutti
ng /
refin
emen
t
Polis
hing
/ Sh
apin
g / T
reat
ing
Inte
rnat
iona
l mar
ket
Cust
oms
offic
e
(min
or C
usto
ms
fee
paid
bu
t onl
y a
smal
l min
ority
of
good
s ar
e ru
n th
roug
h)
Site
Sel
ectio
n
Drill
ing
/ Bla
stin
g
Exca
vatio
n, L
oadi
ng, H
aulin
g,
Dred
ging
Tran
spor
tatio
n/sm
uggl
ing
bym
iner
sto
Paki
stan
Inte
rmed
iary
Mid
dlem
en
Spec
ializ
ed R
etai
l
Who
lesa
le
Sam
plin
g
Paki
stan
ipro
cess
ing
fact
orie
s
Cutti
ng /
refin
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t
Expo
rtba
sket
Dive
rsifi
catio
n
•Pr
ecio
us a
nd s
emi-p
reci
ous
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es•
Gold
•Im
itatio
n Je
welle
ry•
Diam
onds
•Ar
ticle
s of
Jew
elle
ry a
nd P
arts
Cons
ider
ed a
s be
st w
ay to
avo
id
AFG
taxe
s /
licen
ses
Cutti
ng in
sm
alle
r pie
ces
Old
piec
eco
llect
ors
in K
abul
, Maz
ar-e
-Sh
arif,
Bam
yan,
Ku
nduz
Dom
estic
jewe
llery
prod
ucer
sW
orks
hops
em
ploy
ing
1-20
wor
kers
in
Kabu
l, Ba
lkh,
Her
at, K
anda
har
Desi
gnin
g
Mel
ting
/ mou
ldin
g / c
arvi
ng
Wor
ksho
pRe
tail
Polis
hing
/ Sh
apin
g / T
reat
ing
Paki
stan
ijew
elle
rypr
oduc
ers
Expo
rtm
arke
tdiv
ersi
ficat
ion
•In
dia
•US
A•
EU•
UAE
Mar
ket a
naly
sis
Mar
ket i
nfor
mat
ion
syst
em
Esta
blis
hmen
t of
show
room
s
Inte
rnat
iona
l st
anda
rds
Mar
ket a
naly
sis
Natio
nal c
ampa
ign
Trad
ition
al a
nd
digi
tal m
arke
ting
plan
s
Targ
et m
arke
t an
alys
is
Esta
blis
hmen
t of
Afgh
an b
rand
Esta
blis
hmen
t of
show
room
sTr
aini
ng fo
r wo
men
on
expo
rting
Mar
ket
info
rmat
ion
syst
em
Info
rmat
ion
colle
ctio
n sy
stem
Inpu
t
Ston
e M
ines
Gren
ade
for s
tone
min
ing
Prec
ious
met
als
for j
ewel
lery
pro
duct
ion
Desi
gn
Unsk
illed
labo
ur
Gem
ston
e an
d m
etal
cut
ting
mac
hine
Mel
ting
and
mou
ldin
g m
achi
ne
Lim
ited
elec
trici
ty /
powe
r
Prod
uctio
nAs
sem
bly
Proc
essi
ngDi
strib
utio
nDo
mes
tic m
arke
t
[ MOVING TO ACTION ]
37
MOVING TO ACTION
KEY REQUIREMENTS FOR EFFECTIVE IMPLEMENTATION
The development of the future value chain for the precious stones and jewellery sector is a five-year project defined through a consultative process between Afghan public and private sector stakeholders. Achieving the strategic objec-tives and realizing the future value chain depends heavily on the ability of sector stakeholders to start implementing and coordinating the activities defined in the Strategy’s PoA.
The Strategy in and of itself will not alone be sufficient to ensure the sector’s sustainable development. Such de-velopment will require the coordination of various activi-ties. While the execution of these activities will allow for the Strategy’s targets to be achieved, success will depend on the ability of stakeholders to plan and coordinate actions in a tactical manner. Apparently unrelated activities must be synchronized across the public sector and private sector, non-governmental organizations and local communities in order to create sustainable results.
To ensure the success of the Strategy, it is necessary to foster an adequate environment and create an appro-priate framework for implementation. The following section presents some of the key success conditions considered necessary for effective implementation.
ESTABLISH AND OPERATIONALIZE A PUBLIC AND PRIVATE COORDINATING BODY AND EXECUTIVE SECRETARIAT
Precious stones and jewellery sector steering committeeA key success criterion for the Strategy is the ability to coor-dinate activities, monitor progress and mobilize resources for implementation. It is recommended that a steering com-mittee comprising the key public and private sector entities be formed or supported ( if such a committee already exists ). This will function as a platform with balanced representation of all major precious stones and jewellery sector stakehold-ers to share information in open communication.
Overall it is proposed that the steering committee be re-sponsible for the following responsibilities related to Strategy implementation :
� Coordinate and monitor the implementation of the Strategy by the Government, private sector, institutions or international organizations to ensure implementation is on track ;
� Identify and recommend allocation of resources neces-sary for the implementation of the Strategy ;
� Assess the effectiveness and the impact of the Strategy ; � Ensure consistency with the Government’s existing
policies, plans and strategies, and align institutions’ and agencies’ internal plans and interventions with the Strategy PoA ;
� Elaborate and recommend revisions and enhancements to the Strategy so that it continues to best respond to the needs and long-term interests of the national business and export community ;
� Propose key policy changes to be undertaken based on Strategy priorities, and promote these policy changes among national decision makers ;
� Guide the sector secretariat for the monitoring, coordi-nation, resource mobilization, and policy advocacy and communication functions to enable effective implementa-tion of the Strategy ; a criterion for success of the Strategy is the ability to coordinate activities, monitor progress and mobilize resources ;
� Provide the sector secretariat with the mandate and the necessary resources to fulfil its functions effectively.
Composition of the steering committee
It is recommended that the steering committee be com-prised of key entities involved in the sector, with a special focus on ensuring equitable involvement of both the public and the private sector.
Secretariat
A secretariat will assist the steering committee by acting as an operational body responsible for the daily coordination, monitoring and mobilization of resources for implementing the PoA. It is proposed that it takes on this role with techni-cal support from key ministries and technical agencies. The secretariat will be composed of 1–2 technical operators.
38
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
The core responsibilities of the sector secretariat should be to :
� Support functioning of the steering committee ; � Collect and manage data to monitor the progress and
impact of Strategy implementation ; � Liaise with and coordinate development partners for
Strategy implementation ; � Elaborate project proposals and build partnerships to
mobilize resources to implement the Strategy ; � Follow up on policy advocacy recommendations from the
steering committee ; � Ensure effective communication and networking for suc-
cessful Strategy implementation.
Both the steering committee and its secretariat will work hand-in-hand with existing entities established to stream-line Government operations and enhance donor operations. These include the NES secretariat and others. It is possible that the secretariat is accommodated as part of an existing entity with an extended mandate and resources allocated to it.
Photo: ITC
STRATEGIC PLAN OF ACTION
40
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Stra
tegi
c ob
ject
ive
1 : In
crea
se p
rodu
ctiv
e ca
paci
ty w
hile
sup
porti
ng d
iver
sific
atio
n an
d en
trepr
eneu
rshi
p.
Oper
atio
nal
obje
ctiv
esAc
tiviti
esPr
iorit
y 1=
high
2=
med
3=
low
Impl
emen
tatio
n pe
riod
Targ
ets*
Lead
and
sup
porti
ng
impl
emen
ters
2017
2018
2019
2020
2021
2022
1.1.
Impr
ove
prod
uc-
ers’
ent
repr
eneu
rshi
p an
d bu
sine
ss m
an-
agem
ent k
nowl
edge
an
d sk
ills.
1.1.
1. O
rgan
ize re
gular
expo
sure
visits
for p
rodu
cers
to in
terna
tiona
lly w
ell-e
stabl
ished
prec
ious
ston
e and
jewe
l-ler
y exp
orter
s, ins
titut
ions
and
prod
ucer
s in
and
outsi
de o
f the
regi
on in
ord
er to
enha
nce A
fgha
n pr
oduc
ers’
view
of
their
bus
iness
es /
prod
ucts
and
learn
how
to d
evelo
p en
trepr
eneu
rial a
nd m
anag
erial
skill
s.
2•
At le
ast 2
5 ex
posu
re vis
its ea
ch ye
ar AW
CCI
Expo
rt Pr
omot
ion
Agen
cy
of A
fgha
nistan
( EPA
A ),
ACIM
, FAC
T and
PSU
1.1.
2. P
rovid
e sup
port
to th
e Gov
ernm
ent t
o es
tablis
h bu
sines
s and
entre
pren
eursh
ip tr
aining
s for
the h
andi
craft
ex
port
secto
r. Tra
ining
s sho
uld
be h
ouse
d in
the E
cono
mics
Fac
ulty
in all
majo
r univ
ersit
ies. E
PAA
coul
d als
o es
-tab
lish
a trai
ning
wing
.
• De
velo
p a b
usine
ss m
anag
emen
t and
entre
pren
eursh
ip tr
aining
curri
culu
m an
d m
ateria
ls.•
Train
traine
rs.•
Crea
te a t
rainin
g ca
lenda
r and
help
relev
ant o
rgan
izatio
ns im
plem
ent i
t.•
Help
org
aniza
tions
impl
emen
t the
agr
eem
ent d
uring
the
first
year
so th
at su
ch tr
aining
pro
gram
mes
will
be
part
of th
eir fu
ture
workp
lans.
1•
Quar
terly
traini
ngs h
eld ev
ery y
ear
Min
istry
of H
ighe
r Ed
ucat
ion
and
MoC
I ( E
PAA )
1.2.
Impr
ove
ac-
cess
to s
kille
d la
bour
th
roug
hout
the
valu
e ch
ain.
1.2.
1. C
ondu
ct an
inde
pend
ent a
sses
smen
t of e
xistin
g tec
hnica
l and
voca
tiona
l edu
catio
n an
d tra
ining
( TVE
T )
cour
ses o
n pr
ecio
us st
ones
and
jewell
ery,
as w
ell as
a ne
eds a
sses
smen
t of T
VET i
nstit
utio
ns.
Deve
lop
partn
ersh
ips w
ith p
recio
us st
ones
and
jewell
ery s
choo
ls an
d ot
her T
VET i
nstit
utio
ns in
Indi
a and
Eur
ope
for e
xcha
nges
of s
tude
nts a
nd te
ache
rs ; t
ransfe
r of k
nowl
edge
and
techn
olog
y ; an
d im
prov
emen
t of t
echn
olog
y and
tea
ching
stan
dard
s and
qua
lifica
tions
.
2•
Asse
ssm
ent o
f sec
tor s
choo
ls•
Traini
ng p
rogr
amm
es an
d sk
ills o
f trai
n-er
s upg
raded
Min
istry
of E
duca
tion
( MoE
)
1.2.
2. Tr
ain sk
illed
labo
ur in
mini
ng an
d pr
oces
sing.
• Es
tablis
h sh
ort-t
erm
cou
rses
at Ka
bul U
niver
sity’s
Geo
logy
Dep
artm
ent o
n ho
w to
extr
act p
recio
us s
tone
s fro
m
mine
s with
out u
sing
hand
gren
ades
.•
Estab
lish
a mem
oran
dum
of u
nder
stand
ing w
ith K
abul
Univ
ersit
y to
inclu
de sh
ort-t
erm
cou
rses o
n a r
egul
ar ba
-sis
in co
ordi
natio
n wi
th M
oMP.
• De
velo
p a s
hort-
term
cou
rse c
urric
ulum
that
build
s mini
ng an
d pr
oces
sing
skill
s, as
well
as ap
plica
tion
of m
od-
ern t
echn
olog
y for
impr
oved
mini
ng an
d so
rting
, by t
each
ing ho
w ou
tdate
d tec
hniq
ues h
arm th
e qua
lity o
f sto
nes.
• Te
ach
prac
tical
use o
f pro
fessio
nal t
ools.
• Co
nnec
t sho
rt-ter
m co
urse
s’ ce
rtific
ation
to m
ining
lice
nces
.•
Train
parti
cipan
ts on
iden
tifica
tion
of m
etals
and
stone
s to
avoi
d m
ixing
up
meta
l and
prec
ious
ston
e vari
eties
.
1•
One
cour
se fo
r eac
h sta
ge o
f the
valu
e ch
ainM
oMP
and
Kabu
l Un
iver
sity
AWCC
I, AC
IM, F
ACT,
Afgh
anite
and
PSU
1.2.
3. E
stabl
ish an
insti
tutio
n fo
cuse
d on
pro
viding
train
ing in
jewe
llery
desig
n an
d cu
tting
ston
es. E
stabl
ishm
ent
base
d on
a pu
blic–
priva
te pa
rtner
ship
with
an ex
isting
insti
tutio
ns is
a po
ssib
le so
lutio
n.
• He
lp th
is ins
titut
ion
estab
lish
stand
ard co
urse
s for
each
valu
e cha
in ste
p.•
Prov
ide
thes
e co
urse
s as t
rainin
g op
portu
nities
for d
esig
ners,
cut
ters,
polis
hers
and
jewell
ery m
aker
s on
a reg
u-lar
bas
is.
1•
One i
nstit
utio
n fu
lly fu
nctio
nal
MoL
SAM
D AW
CCI,
FACT
and
PSU
1.2.
4. D
evelo
p an
ince
ntive
fram
ewor
k as w
ell as
in-h
ouse
train
ing p
rogr
amm
es to
dev
elop
and
enha
nce i
n-ho
use
traini
ng b
y ent
erpr
ises f
or ap
pren
tices
hip, v
ocati
onal
and
on-th
e-jo
b tra
ining
. Inc
eptiv
e typ
es to
be f
urth
er d
efine
d ba
sed
on b
est p
ractic
es p
rom
oted
by t
he In
terna
tiona
l Lab
our O
rgan
izatio
n.
2•
One s
tanda
rdize
d fram
ewor
k for
the s
ec-
tor b
ased
on
best
prac
tices
MoL
SAM
D, M
oE
1.2.
5. C
ondu
ct a r
apid
asse
ssm
ent o
f the
secto
r thr
ough
field
cons
ultat
ions
with
pro
duce
rs, b
uyer
s, yo
ung
peop
le an
d tra
ining
insti
tutio
ns to
:
• Ide
ntify
the s
kills
dem
ande
d by
the m
arket
in th
e diff
erent
stag
es o
f the
secto
r valu
e cha
in.•
Map
the e
xistin
g fo
rmal
traini
ng o
ffer a
s well
as th
e inf
orm
al tra
ining
prac
tices
activ
e in
the s
ecto
r.•
Asse
ss th
e int
erest
of yo
ung
peop
le in
enga
ging
in th
e sec
tor.
1•
One y
outh
asse
ssm
ent in
all m
ain ex
trac-
tion
and
prod
uctio
n hu
bs•
One
repor
t with
resu
lts o
f the
secto
r as-
sess
men
t, inc
luding
form
al an
d info
rmal
traini
ng o
ffered
in th
e sec
tor
• On
e int
erest
surve
y con
ducte
d wi
th 1
00
yout
h int
ereste
d in
worki
ng in
the s
ecto
r
MoL
SAM
D, M
oE
* Ta
rget
s ar
e in
dica
tive
only
and
will
be
the
subj
ect o
f fur
ther
refin
emen
t at b
egin
ning
of t
he im
plem
enta
tion
man
agem
ent s
tage
. Sim
ilarly
, the
lead
an
d su
ppor
ting
impl
emen
ters
col
umn
rem
ains
indi
cativ
e be
caus
e im
plem
enta
tion
will
requ
ire c
olle
ctiv
e ef
forts
, so
addi
tiona
l ins
titut
ions
may
be
adde
d.
[ STRATEGIC PLAN OF ACTION ]
41
Stra
tegi
c ob
ject
ive
1 : In
crea
se p
rodu
ctiv
e ca
paci
ty w
hile
sup
porti
ng d
iver
sific
atio
n an
d en
trepr
eneu
rshi
p.
Oper
atio
nal
obje
ctiv
esAc
tiviti
esPr
iorit
y 1=
high
2=
med
3=
low
Impl
emen
tatio
n pe
riod
Targ
ets*
Lead
and
sup
porti
ng
impl
emen
ters
2017
2018
2019
2020
2021
2022
1.2.
Impr
ove
ac-
cess
to s
kille
d la
bour
th
roug
hout
the
valu
e ch
ain.
1.2.
6. E
nhan
ce yo
ung
peop
le’s (
parti
cular
ly ret
urne
es’ )
aware
ness
of s
kills
deve
lopm
ent a
nd ec
onom
ic op
portu
ni-tie
s ava
ilabl
e in
the s
ecto
r thr
ough
:
• Ra
dio
show
s with
loca
l cha
mpi
ons o
f the
secto
r.•
Exhib
ition
s and
fairs
to p
rom
ote t
he se
ctor a
mon
g yo
ung
peop
le.•
Socia
l med
ia an
d ot
her o
nline
plat
form
s with
hig
h yo
uth
pres
ence
.
2•
One r
adio
show
ever
y thr
ee m
onth
s with
lo
cal c
ham
pion
s of t
he se
ctor
• Tw
o ex
hibiti
ons a
nd fa
irs p
er ye
ar•
One
soci
al m
edia
and
onlin
e pl
atfor
m
for t
he se
ctor
MoL
SAM
D, M
oE, P
SU
1.2.
7. B
ased
on
the f
inding
s of t
he sk
ills g
ap st
udy,
traini
ng in
stitu
tions
for y
outh
will
be s
uppo
rted
to :
• De
velo
p an
d im
prov
e cur
ricul
a rele
vant
to th
e sec
tor i
n are
as su
ch as
artis
anal
mini
ng p
ractic
es, c
uttin
g an
d po
l-ish
ing g
emsto
nes,
jewell
ery d
esig
n an
d jew
eller
y mak
ing.
• Int
egrat
e entr
epren
eursh
ip an
d intr
oduc
tory b
usine
ss m
anag
emen
t mod
ules s
uch a
s acc
ounti
ng, s
ales a
nd m
arketi
ng.
• Al
ign
with
nati
onal
or in
terna
tiona
l stan
dard
s and
certi
ficati
on sc
hem
es to
ensu
re rec
ognit
ion
of th
e qua
lifica
tions
an
d m
eet m
arket
requir
emen
ts.
1•
One
yout
h-tai
lore
d cu
rricu
lum
for e
ach
secto
r-rela
ted fie
ld ( m
ining
, cutt
ing, p
ol-ish
ing, d
esign
and j
ewell
ery m
aking
, en-
trepr
eneu
rship
/ bu
sines
s man
agem
ent )
• Ce
rtific
atio
n sc
hem
es fo
r you
th w
ho
com
plete
the c
ourse
MoL
SAM
D, M
oE, M
oMP,
ACIM
, Afg
hanit
e
1.2.
8. E
nhan
ce an
d ro
ll ou
t tec
hnica
l skil
ls tra
ining
pro
gram
mes
relat
ed to
the s
ecto
r to
Afgh
an yo
uth,
inclu
d-ing
scho
ol d
ropo
uts a
nd re
turn
ees.
The s
kill a
reas w
ill b
e bas
ed o
n th
e sec
tor s
kills
gap
asse
ssm
ent a
nd th
e en-
hanc
ed cu
rricu
la in
orde
r to
ensu
re ali
gnm
ent w
ith m
arket
requir
emen
ts. Th
e trai
ning
prog
ramm
es w
ill b
e dep
loye
d th
roug
h :
• Ex
isting
loca
l trai
ning
instit
utio
ns en
gage
d in
secto
r skil
ls de
velo
pmen
t.•
Com
puter
-bas
ed tr
aining
on
jewell
ery d
esig
n an
d m
aking
, ent
repren
eursh
ip an
d bu
sines
s man
agem
ent.
• Sk
ills c
ompe
titio
ns an
d aw
ard m
echa
nism
s on
jewell
ery d
esig
n an
d m
aking
.•
Stud
y trip
s to
coun
tries
in th
e reg
ion
( suc
h as
Tha
iland
, Ind
ia ) to
expo
se tr
ainee
s to
best
prac
tices
in d
esig
n an
d pr
oduc
tion.
1•
Quar
terly
techn
ical s
kills
and
voca
tion-
al tra
ining
pro
gram
mes
for y
outh
in th
e se
ctor
MoL
SAM
D, M
oE, M
oMP,
ACIM
1.2.
9. E
stabl
ish ar
range
men
ts be
twee
n Af
ghan
train
ing in
stitu
tions
and
regio
nal /
inter
natio
nal t
rainin
g ins
titut
ions
, as
well
as w
ith in
terna
tiona
l com
panie
s, to
:
• Ex
chan
ge te
chnic
al kn
owled
ge o
n pr
ecio
us st
one c
uttin
g an
d po
lishin
g, an
d jew
eller
y des
ign
and
mak
ing.
• Co
nduc
t trai
ning
of tr
ainer
pro
gram
mes
to b
uild
instru
ctor c
apac
ity.
• Ac
cess
firm
-to-fi
rm te
chnic
al as
sistan
ce in
gem
stone
pro
cess
ing an
d jew
eller
y pro
ducti
on.
• Pr
omot
e Afg
han
gem
stone
s and
jewe
llery
desig
ns.
• Fa
cilita
te tec
hnol
ogy a
nd eq
uipm
ent t
ransfe
r.
2•
At le
ast o
ne tr
ainin
g pa
rtner
ship
esta
b-lis
hed
per y
ear
Min
istry
of F
orei
gn
Affa
irs, M
oLSA
MD,
MoE
, M
oMP,
ACIM
1.2.
10. C
reate
a sho
rt-ter
m p
aid ap
pren
tices
hip p
rogr
amm
e for
yout
h wi
th m
aster
craft
speo
ple t
o :
• De
liver
han
ds-o
n sk
ills t
rainin
g in
prec
ious
ston
es p
roce
ssing
, jew
eller
y des
ign
and
mak
ing.
• Pr
ovid
e cer
tifica
tion
on co
mpl
etion
of a
n ap
pren
tices
hip p
rogr
amm
e.
2•
Crea
tion
of o
ne sh
ort-t
erm
paid
appr
en-
tices
hip pr
ogram
me f
or 25
youth
per y
ear
MoL
SAM
D, M
oE, M
oMP,
Mini
stry o
f For
eign
Affai
rs, A
CIM
, Afg
hanit
e
1.3.
Impr
ove
acce
ss
to fi
nanc
e.
1.3.
1. S
uppo
rt pr
oduc
ers o
f this
secto
r to
unde
rstan
d fin
ance
, and
impr
ove a
cces
s to
finan
ce an
d fin
ancia
l und
er-sta
nding
thro
ugh
long
er-ter
m tr
aining
and
coac
hing
prog
ramm
es.
• Inc
orpo
rate t
rainin
gs in
the c
urric
ulum
of th
e bus
iness
man
agem
ent a
nd en
trepr
eneu
rship
capa
city-
build
ing in
itiativ
e.•
Impr
ove f
inanc
ial sy
stem
s and
doc
umen
tatio
n in
orde
r to
enab
le be
tter f
inanc
ial p
lannin
g by
pro
duce
rs.•
Revie
w eli
gibi
lity c
riter
ia fo
r ban
k loa
ns.
2•
Quar
terly
sess
ions
Ex
port
Prom
otio
n Ag
ency
of
Afgh
anis
tan /
AWCC
I, AC
IM
1.3.
2. P
rovid
e sup
port
to p
rivate
secto
r rep
resen
tative
s in
lobb
ying
MoF
and
Da A
fgha
nistan
Ban
k for
easy
and
in-ex
pens
ive lo
ans a
s well
as fo
r fina
ncing
pro
gram
mes
for t
he se
ctor b
y em
phas
izing
the p
oten
tial f
or ex
ports
.Lo
bby e
spec
ially
for w
omen
, as w
omen
’s ac
cess
to fi
nanc
e is l
imite
d. W
omen
also
hav
e lim
ited
abili
ty to
pro
vide
prop
erty
as co
llater
al an
d ne
ed a
long
er g
race p
erio
d.
2•
Num
ber o
f men
and
wom
en in
the
sec-
tor g
etting
loan
s AW
CCI a
nd s
ecto
r lob
-by
ing
com
mitt
ee
42
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Stra
tegi
c ob
ject
ive
1 : In
crea
se p
rodu
ctiv
e ca
paci
ty w
hile
sup
porti
ng d
iver
sific
atio
n an
d en
trepr
eneu
rshi
p.
Oper
atio
nal
obje
ctiv
esAc
tiviti
esPr
iorit
y 1=
high
2=
med
3=
low
Impl
emen
tatio
n pe
riod
Targ
ets*
Lead
and
sup
porti
ng
impl
emen
ters
2017
2018
2019
2020
2021
2022
1.4.
Impr
ove
acce
ss
to in
puts
. 1.
4.1.
Con
duct
a sur
vey o
n ex
isting
and
requir
ed in
put g
oods
, fun
ction
s and
servi
ces f
or th
e ind
ustry
as a
basis
for
plan
ning,
secto
r dev
elopm
ent a
nd in
vestm
ent p
rom
otio
n.Ba
sed
on th
e sur
vey,
cond
uct t
argete
d inv
estm
ent p
rom
otio
n an
d de
sign
affor
dabl
e loa
ns in
ord
er to
incr
ease
ac-
cess
ibili
ty to
expe
nsive
, mod
ern
mac
hiner
y and
tool
s for
:
• Cu
tting
, refi
ning,
pol
ishing
and
finish
ing ra
w m
ateria
l ( i.e
. sem
i and
prec
ious
ston
es an
d m
etals )
• Ge
msto
ne an
d m
etal-c
uttin
g, m
elting
and
mou
lding
mac
hines
• Ba
sed o
n the
surve
y, de
sign a
nd im
plem
ent m
easu
res to
impr
ove d
istrib
ution
of ra
w m
ateria
ls ( e
.g. s
emi-
and p
re-cio
us st
ones
and
meta
ls, su
ch as
gol
d an
d sil
ver )
1•
One s
urve
y in
each
hub
• Inv
estm
ent p
rom
otion
plan
base
d on s
ur-ve
y for
each
valu
e cha
in ste
p
MoC
I, M
oMP
ACIM
1.4.
2. C
ondu
ct a f
easib
ility
study
to as
sess
the e
stabl
ishm
ent o
f a p
recio
us st
ones
pro
cess
ing ar
ea in
Kab
ul ( d
ue to
pr
oxim
ity to
qua
rries
and
air co
rrido
r fac
ilitie
s )1
• On
e fea
sibili
ty stu
dy d
evelo
ped
to e
val-
uate
the
esta
blish
men
t of a
pre
ciou
s sto
nes p
roce
ssing
cent
re in
Kabu
l
MoM
P, M
oCI,
priva
te se
ctor a
ssoc
iatio
ns
1.4.
3. S
ourc
e prec
ious
ston
es an
d m
etals
respo
nsib
ly an
d tra
nspa
rently
.
• Im
prov
e the
trac
eabi
lity o
f prec
ious
mate
rials
sour
cing
thro
ugh
bette
r cer
tifica
tion,
qua
lity c
ontro
l and
mark
eting
.•
Impr
ove e
nfor
cem
ent m
easu
res.
• En
cour
age t
he pr
ivate
secto
r to a
dopt
resp
onsib
le so
urcin
g stan
dard
s and
certi
ficati
ons (
e.g.
Res
pons
ible J
ewell
ery
Coun
cil ce
rtific
ation
) and
adeq
uate
labell
ing fo
r prec
ious
mate
rials
thro
ugh
tailo
red w
orks
hops
.•
Prov
ide
traini
ng a
nd te
chnic
al as
sistan
ce fo
r pro
duce
rs on
resp
onsib
le so
urcin
g sta
ndard
s an
d lab
elling
of p
re-
cious
ston
es an
d jew
eller
y pro
ducts
.
1•
Resp
onsib
le so
urcin
g lab
el int
rodu
ced t
o 10
% o
f ent
erpr
ises c
ertif
ied a
year
ANSA
, MoM
P, AC
IM, p
ri-va
te se
ctor a
ssoc
iatio
ns
1.4.
4. E
ncou
rage a
nd su
ppor
t esta
blish
men
t of c
ompa
nies t
hat b
uy m
achin
ery f
or o
ther
com
panie
s on
a lon
g-ter
m lo
an b
asis.
A p
ublic
–priv
ate p
artn
ersh
ip in
volvi
ng d
onor
s and
priv
ate co
mpa
nies w
ould
supp
ort t
his in
itia-
tive.
Cons
ider
mac
hine r
ental
s in
regio
nal h
ubs a
nd co
rpor
ate o
wner
ship
of e
xpen
sive m
achin
es b
y ass
ociat
ions
or
grou
ps o
f pro
duce
rs.
2•
List o
f com
panie
s tha
t buy
mac
hiner
y for
ot
her c
ompa
nies
MoC
I
[ STRATEGIC PLAN OF ACTION ]
43
Stra
tegi
c ob
ject
ive
2 : Im
prov
e th
e re
gula
tory
fram
ewor
k an
d in
frast
ruct
ural
sup
port.
Oper
atio
nal o
bjec
tives
Activ
ities
Prio
rity
1=hi
gh
2=m
ed
3=lo
w
Impl
emen
tatio
n pe
riod
Targ
ets*
Le
ad a
nd s
uppo
rting
im
plem
ente
rs
2017
2018
2019
2020
2021
2022
2.1.
Impr
ove
the
lega
l pr
oced
ures
for l
icen
sing
an
d pe
rmits
.
2.1.
1. C
oope
rate w
ith G
over
nmen
t ins
titut
ions
in o
rder
to im
prov
e the
ir co
ordi
natio
n.Cl
assif
y prec
ious
ston
es an
d jew
eller
y as a
scarc
ity ar
ea ( s
hort
and
med
ium te
rm ) t
o tri
gger
spec
ial su
ppor
t mea
s-ur
es b
y pub
lic au
thor
ities
. Esta
blish
a on
e-sto
p sh
op fo
r pro
duce
rs an
d ex
porte
rs to
obt
ain an
y per
mit
and
tariff
cle
aranc
es.
2
• On
e-sto
p sh
op is
ser
ving
all th
e pr
oduc
ers
and
expo
rters
of t
his
secto
r
MoC
IM
oMP
and
mun
icipa
li-tie
s, AC
IM
2.1.
2. C
larify
and
simpl
ify ta
xatio
n an
d fee
type
s and
pro
cedu
res.
Publ
ish in
form
ation
bro
chur
es an
d pa
mph
lets f
or re
levan
t stak
ehol
ders
to in
form
them
of l
egal
proc
edur
es.
Prov
ide m
inistr
ies w
ith w
ritten
feed
back
and
recom
men
datio
ns o
n rel
evan
t item
s in
orde
r to
incen
tivize
spec
ific a
c-tio
ns in
resp
onsib
le m
inistr
ies.
1
• Si
mpl
ified
fee
types
and
pro
ce-
dures
are d
ocum
ented
and
used
M
oF a
nd M
oCI
MoM
P, se
ctor a
dvoc
acy
com
mitt
ee, A
CIM
2.1.
3. P
rovid
e trai
ning
and
aware
ness
-raisi
ng in
itiati
ves t
o bo
th G
over
nmen
t and
the p
rivate
secto
r on
perm
its, t
axes
an
d fee
pro
cedu
res.
2•
One t
rainin
g ev
ery q
uarte
rM
oFM
oCI a
nd M
oMP,
ACIM
2.2.
Impl
emen
t the
M
iner
als
Law
and
mon
i-to
ring
of p
reci
ous
ston
es
extra
ctio
n an
d ex
port
( pre
vent
ing
smug
glin
g ).
2.2.
1. R
estri
ct un
prof
essio
nal m
ining
and
stim
ulate
serio
us im
plem
entat
ion
of th
e Mine
rals L
aw b
y the
Gov
ernm
ent.
Ident
ify b
est p
ractic
es to
pro
gres
sively
form
alize
artis
anal
and
small
-sca
le m
ining
in re
gion
al co
untri
es an
d als
o in
coun
tries
with
a sim
ilar c
ontex
t ( e.
g. C
olom
bia,
Mon
golia
and
the D
emoc
ratic
Repu
blic
of C
ongo
). En
gage
gem
stone
mine
rs ( fo
rmal
and
infor
mal )
and
com
mun
ity el
ders
in fu
rther
iden
tifyin
g m
easu
res to
ince
ntivi
ze
form
aliza
tion
of m
ining
, suc
h as
:
• Ec
onom
ic an
d so
cial i
ncen
tives
( e.g
. com
mun
ity p
artic
ipati
on in
reve
nues
, safe
ty fo
r mine
rs )
• As
sistan
ce w
ith n
ew te
chno
logy
• Te
chnic
al as
sistan
ce to
supp
ort f
orm
aliza
tion
Incor
porat
e rele
vant
mea
sures
in th
e Mine
ral La
w, cu
rrent
ly un
der r
evisi
on.
Deve
lop
and
form
alize
allia
nces
with
relev
ant i
nter
natio
nal i
nstit
utio
ns to
share
know
ledge
and
techn
ical a
ssist
ance
on
this
matt
er.
1
• By
202
0 m
ining
is fu
lly le
galiz
ed
MoM
P, AC
IMM
inistr
y of I
nter
ior A
ffairs
, Af
ghan
ite
2.2.
2. S
tream
line m
ining
lice
nces
and
ensu
re th
at all
mine
rs ob
tain
them
. Onl
y mine
rs wi
th li
cenc
es sh
ould
be a
l-lo
wed
to st
art m
ining
.Im
prov
e coo
rdina
tion
betw
een
MoM
P an
d th
e Mini
stry o
f Int
erio
r Affa
irs at
subn
ation
al lev
el.
1
• By
202
0 m
ining
is fu
lly le
galiz
edM
oMP,
sect
or a
dvoc
acy
com
mitt
eeM
inistr
y of I
nter
ior A
ffairs
, AC
IM2.
2.3.
Con
trol t
he b
orde
r to
Pakis
tan in
ord
er to
prev
ent s
mug
gling
and
recor
d nu
mbe
rs of
prec
ious
ston
es an
d jew
el-ler
y fur
ther
pro
cess
ed / w
ith va
lue a
dded
in P
akist
an.
Use i
nter
natio
nal m
edia
outle
ts in
orde
r to
remov
e the
imag
e of f
inanc
ing te
rroris
ts by
gem
stone
s ( es
pecia
lly la
pis )
.2
• Bo
rder
con
trol p
osts
estab
lishe
d on
each
main
rout
e to
Pakis
tanAf
ghan
Bor
der P
olic
e,
Cust
oms,
Mini
stry o
f Int
erio
r Affa
irs
2.2.
4. M
onito
r mine
s with
lice
nces
and
cont
rol q
ualit
y of m
ined
prec
ious
ston
es an
d m
etals
( e.g
. gol
d an
d sil
ver )
in Af
ghan
istan
.
• Inc
lude
civil
socie
ty in
mon
itorin
g th
eir co
ordi
natio
n an
d m
onito
ring
the i
mpl
emen
tatio
n of
the M
ineral
s Law
.•
Strat
egica
lly c
omm
unica
te th
e im
plem
entat
ion
of th
e M
ineral
s La
w an
d its
mon
itorin
g pr
oces
s to
the
inter
natio
nal
com
mun
ity.
1
• An
nual
mon
itorin
g rep
ort
MoM
P, AC
IM, s
ecto
r ad-
voca
cy c
omm
ittee
Mini
stry o
f Int
erio
r Affa
irs
* Ta
rget
s ar
e in
dica
tive
only
and
will
be
the
subj
ect o
f fur
ther
refin
emen
t at b
egin
ning
of t
he im
plem
enta
tion
man
agem
ent s
tage
. Sim
ilarly
, the
lead
an
d su
ppor
ting
impl
emen
ters
col
umn
rem
ains
indi
cativ
e be
caus
e im
plem
enta
tion
will
requ
ire c
olle
ctiv
e ef
forts
, so
addi
tiona
l ins
titut
ions
may
be
adde
d.
44
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Stra
tegi
c ob
ject
ive
2 : Im
prov
e th
e re
gula
tory
fram
ewor
k an
d in
frast
ruct
ural
sup
port.
Oper
atio
nal o
bjec
tives
Activ
ities
Prio
rity
1=hi
gh
2=m
ed
3=lo
w
Impl
emen
tatio
n pe
riod
Targ
ets*
Le
ad a
nd s
uppo
rting
im
plem
ente
rs
2017
2018
2019
2020
2021
2022
2.3.
Impr
ove
acce
ss to
in
frast
ruct
ure.
2.
3.1.
Ena
ble a
cces
s to
land
and
prod
uctio
n sp
ace f
or sm
all p
rodu
cers
who
are n
ot ab
le to
get
bigg
er p
lots
in in-
dustr
ial p
arks.
Cons
ider
allo
catio
n wi
thin
cities
, esp
ecial
ly if
they
hav
e lig
ht in
dustr
ies su
ch as
jewe
llery
mak
ing an
d ge
msto
nes.
• Es
tablis
h a o
ne-s
top
shop
for l
and
and
prod
uctio
n sit
e reg
istrat
ion.
• Tra
in sta
ff at
MoC
I to
supp
ort S
MEs
to ac
cess
land
and
facili
tate t
he re
gistr
ation
pro
cedu
re.•
Publ
ish in
form
ation
on
avail
able
land
and
prod
uctio
n sit
es fo
r SM
Es o
nline
and
offl
ine ( w
ebsit
e, br
ochu
res, i
nfor-
mati
on b
oard
s, rad
io et
c. )
2
• On
e lo
catio
n in
eac
h pr
ovin
ce is
as
signe
d fo
r sec
tor p
rodu
cers
MoC
IPr
esid
ent’s
Offi
ce,
Afgh
anist
an In
depe
nden
t La
nd A
utho
rity,
MoF
2.3.
2. R
aise t
he aw
arene
ss o
f the
Gov
ernm
ent i
n or
der t
o im
prov
e acc
ess t
o ele
ctrici
ty.Co
mm
unica
te th
at er
ratic
acce
ss to
elec
tricit
y is a
seve
re inh
ibito
ry fac
tor f
or th
e sec
tor.
Repo
rt ho
w m
uch
electr
icity
is ne
eded
for e
ach
prod
uctio
n sta
ge.
Track
acce
ssib
ility
thro
ugho
ut a
certa
in pe
riod
to d
ocum
ent h
ow o
ften
acce
ss to
elec
tricit
y has
caus
ed h
urdl
es in
the
prod
uctio
n pr
oces
s.
2
• On
e rep
ort o
n ele
ctrici
ty us
age
of
the s
ecto
r Da
Afg
hani
stan
Bre
shna
Sh
erka
t
2.3.
3. Im
prov
e acc
ess t
o po
st of
fices
and
ing se
rvice
s for
pac
kage
s in
diffe
rent s
izes i
n or
der t
o de
liver
pro
ducts
to
inter
natio
nal m
arkets
.St
rengt
hen
dom
estic
tran
spor
tatio
n m
odes
in o
rder
to su
bstit
ute t
ransp
ortat
ion
from
Pak
istan
as an
easie
r des
tinati
on
for s
hippi
ng o
f goo
ds to
inter
natio
nal m
arkets
.
1
• Fiv
e majo
r pro
vince
s’ po
st of
fices
are
fully
func
tiona
l by 2
020
Min
istry
of
Com
mun
icat
ions
and
In
form
atio
n Te
chno
logy
Pres
iden
t’s O
ffice
2.3.
4. S
uppo
rt th
e Mini
stry o
f Com
mun
icatio
ns an
d Inf
orm
ation
Tech
nolo
gy an
d Da
Afg
hanis
tan B
ank t
o fac
ilitat
e the
es
tablis
hmen
t of a
n e-
paym
ent p
latfo
rm.
• M
obili
ze te
chnic
al an
d fin
ancia
l sup
port
from
don
ors.
• Inv
estig
ate d
onor
and
partn
er co
untri
es fo
r im
plem
entat
ion
of an
e-pa
ymen
t plat
form
.•
Colle
ct be
st pr
actic
es an
d su
cces
sful c
ases
for i
ntro
ducti
on o
f e-p
aym
ent p
latfo
rms.
• De
velo
p th
e plat
form
bas
ed o
n tec
hnica
l sup
port
of p
artn
ers.
• La
unch
the
e-pa
ymen
t plat
form
by a
dver
tising
its o
ppor
tunit
ies an
d av
ailab
ility
to e
xpor
ters a
nd o
ther
stak
ehol
ders
of th
e sec
tor r
each
ing o
ut to
inter
natio
nal m
arkets
.
1
• By
the
end
of 2
018,
an
e-pa
y-m
ent p
latfo
rm is
fully
func
tiona
l in
Afgh
anist
an
Min
istry
of
Com
mun
icat
ions
and
In
form
atio
n Te
chno
logy
an
d Da
Afg
hani
stan
Ban
kM
oCI
2.4.
Sup
port
sect
or a
d-vo
cacy
and
lobb
y gr
oups
.2.
4.1.
Esta
blish
a jo
int ad
voca
cy co
mm
ittee
com
prisi
ng P
SU, F
ACT,
AWCC
I, AC
IM an
d AC
CI.
• Pr
ovid
e adv
ocac
y and
lobb
ying
traini
ng to
PSU
and
the c
omm
ittee
to en
hanc
e skil
ls.•
Orga
nize w
omen
-own
ed g
emsto
nes a
nd je
welle
ry pr
oduc
ers i
n a g
roup
.•
Prov
ide t
rainin
g of
fem
ale le
ader
s in
the s
ecto
r in
orde
r to
stren
gthe
n th
e pos
ition
of w
omen
in th
e sec
tor.
• Tra
in co
ache
s for
wom
en-to
-wom
en tr
aining
s in
leade
rship
and
busin
ess m
anag
emen
t by r
einfo
rcing
wom
en’s
ca-
pacit
ies in
fund
raisin
g an
d res
ourc
e m
obili
zatio
n, d
irecti
ng p
ublic
and
don
or fu
nds
towa
rds
key
issue
s fo
r wom
en
in th
e sec
tor.
1
• On
e full
y fun
ction
al ad
voca
cy co
m-
mitt
ee is
estab
lishe
d for
the s
ecto
r•
Thirt
y wo
men
fro
m K
abul
and
pr
ovin
ces
are
men
tore
d on
how
to
advo
cate
Orga
niza
tions
men
-tio
ned,
led
by A
WCC
IM
oCI
2.4.
2. A
ssig
n a c
omm
ittee
on
inter
natio
nal t
rade a
gree
men
ts an
d ot
her i
ssue
s of t
he S
trateg
y to
lobb
y and
advo
cate
for t
he se
ctor.
• Cr
eate
a stra
tegic
advo
cacy
plan
that
look
s int
o th
e im
plem
entat
ion
of th
e Stra
tegy a
nd re
sour
ce m
obili
zatio
n.•
Deve
lop a
well-
defin
ed do
cum
ent c
over
ing is
sues
cons
idered
in ag
reem
ents
that a
re ac
cept
able
at int
erna
tiona
l leve
ls.•
Star
t a jo
int tr
aining
for s
ecto
r lea
ders
and
MoC
I staf
f on
trade
agr
eem
ents,
in o
rder
to e
nsur
e th
at iss
ues
are fu
lly
unde
rstoo
d.•
Prep
are tr
aining
mate
rials
and
curri
culu
m.
• Ce
rtify
succ
essfu
l par
ticip
ants
in or
der t
o be
com
e foc
al po
ints f
or tr
ade a
gree
men
t iss
ues.
1
• Ac
hiev
emen
t of a
ll th
e str
ategi
c ob
jectiv
es o
f this
secto
r Stra
tegy
Orga
niza
tions
men
tione
d un
der t
he c
omm
ittee
se
ctio
n
[ STRATEGIC PLAN OF ACTION ]
45
Stra
tegi
c ob
ject
ive
2 : Im
prov
e th
e re
gula
tory
fram
ewor
k an
d in
frast
ruct
ural
sup
port.
Oper
atio
nal o
bjec
tives
Activ
ities
Prio
rity
1=hi
gh
2=m
ed
3=lo
w
Impl
emen
tatio
n pe
riod
Targ
ets*
Le
ad a
nd s
uppo
rting
im
plem
ente
rs
2017
2018
2019
2020
2021
2022
2.5.
Impr
ove
acce
ss
to q
ualit
y te
stin
g an
d ce
rtific
atio
n.
2.5.
1. Id
entif
y gap
s and
dev
elop
a plan
to es
tablis
h a l
ab fo
cusin
g on
the p
recio
us st
ones
and
jewell
ery s
ecto
r.
• Co
nduc
t fiel
d vis
its to
labo
rator
ies in
Jaip
ur an
d Sr
i Lan
ka to
abso
rb an
d ad
apt b
est p
ractic
es fo
r the
estab
lishm
ent
of la
borat
ories
in A
fgha
nistan
.•
Cond
uct a
feas
ibili
ty stu
dy fo
r the
estab
lishm
ent o
f lab
orato
ries t
o co
nduc
t qua
lity t
estin
g an
d iss
ue ce
rtific
ation
s.•
Asse
ss th
e inv
estm
ent /
cost
estim
ation
, inf
rastru
cture
and
techn
ical t
rainin
g ne
eded
, am
ong
othe
rs, in
cludi
ng g
eo-
grap
hical
poten
tial f
or o
perat
ions
.
1
• Fo
ur fe
asib
ility
study
repo
rts in
all
main
pro
ducti
on h
ubs
• Tw
o in
tern
atio
nal
field
vis
its
annu
ally
MoM
P, AN
SAAC
IM, M
oCI
2.5.
Impr
ove
acce
ss
to q
ualit
y te
stin
g an
d ce
rtific
atio
n.
2.5.
2. R
eview
the N
ation
al La
borat
ory P
olicy
and
the o
utco
me o
f the
feas
ibili
ty stu
dy / g
ap an
alysis
to ad
just
its sc
ope
to se
ctor-s
pecif
ic req
uirem
ents.
2•
All G
over
nmen
t lab
s co
vere
d by
th
e pol
icyAN
SA, M
oMP,
ACIM
2.5.
Impr
ove
acce
ss
to q
ualit
y te
stin
g an
d ce
rtific
atio
n.
2.5.
3. D
evelo
p a l
ab es
tablis
hmen
t plan
to su
ppor
t com
plian
ce w
ith m
anda
tory
and
buye
rs’ re
quire
men
ts in
targe
t m
arkets
.
• Re
cruit
and
train
staff
for t
he la
bs.
• Inv
estig
ate p
ossib
le lo
catio
ns fo
r lab
s in
main
hub
s.•
Asse
ss se
ctor n
eeds
in te
rms o
f qua
lity c
ontro
l in
orde
r to
deter
mine
the r
equir
ed ca
pacit
y for
lab
estab
lishm
ent.
1
• At
leas
t 20
tech
nica
l sta
ff ar
e tra
ined
for t
he fi
rst e
stabl
ishm
ent
of la
bs in
all f
our m
ain h
ubs
• Fo
ur
sect
or-s
peci
fic
labs
es
tablis
hed
• Pr
ovid
e at
leas
t 80 %
of t
ests
re-
quire
d fo
r prio
rity e
xpor
t pro
ducts
ANSA
, MoM
PAC
CI, A
WCC
I, AC
IM,
Inter
natio
nal C
ham
ber o
f Co
mm
erce
2.5.
4. S
uppo
rt es
tablis
hmen
t of a
nati
onal
labor
atory
netw
ork t
o pr
omot
e int
er-lab
orato
ry co
oper
ation
.3
• M
ost l
abs
( 70 %
) cov
ered
by
the
netw
ork
ANSA
MoM
P, AC
IM2.
5.5.
Esta
blish
inter
natio
nal s
tanda
rds f
or th
is se
ctor w
ith A
NSA.
• Pu
blish
info
rmati
on b
ookle
ts on
stan
dard
s for
pro
duce
rs an
d ex
porte
rs.•
Help
Afg
han
prod
ucer
s get
their
pro
cess
and
man
agem
ent c
ertif
ied b
ased
on
stand
ards.
1•
List o
f stan
dard
s pub
lishe
d AN
SAAW
CCI,
ACIM
, FAC
T and
PS
U
2.5.
6. R
eview
exist
ing se
ctor-s
pecif
ic law
s on
metr
olog
y and
dev
elop
regul
ation
s to
estab
lish
and
enfo
rce s
tanda
rds
of le
gal m
etrol
ogy a
nd re
gulat
e trad
e with
rega
rd to
weig
hts a
nd m
easu
res, a
nd en
forc
e the
legi
slatio
n.1
• Do
cum
ente
d se
t of s
ecto
r-spe
-ci
fic d
omes
tic re
gula
tions
and
sta
ndard
s
ANSA
2.5.
7. C
reate
dom
estic
stan
dard
s for
prec
ious
ston
es an
d jew
eller
y bas
ed o
n ex
isting
secto
r-spe
cific
laws,
regul
ation
s an
d int
erna
tiona
l stan
dard
s and
requ
irem
ents.
1•
Dom
estic
stan
dard
s crea
tedAN
SA
2.5.
8. Tr
ain A
NSA
and
priva
te se
ctor q
ualit
y cer
tifica
tion
com
panie
s’ sta
ff to
be a
ble t
o iss
ue ce
rtific
ates a
nd d
istin-
guish
han
dmad
e and
mac
hine-
mad
e pro
ducts
.1
• Fo
ur a
ware
ness
-raisi
ng in
itiati
ves
and
com
bine
d tra
inin
g se
ssio
ns
annu
ally
in e
ach
of th
e fo
ur m
ain
prod
uctio
n hu
bs
ANSA
, priv
ate se
ctor q
ual-
ity ce
rtific
ation
com
panie
s
2.5.
9. R
aise p
rodu
cers’
and
expo
rters’
aware
ness
of i
nter
natio
nal s
tanda
rds a
nd d
omes
tic st
anda
rds e
stabl
ished
for
the s
ecto
r. 2
• Tw
o qu
arte
rly a
ware
ness
-raisi
ng
works
hops
cond
ucted
AWCC
I, AC
IM, F
ACT
and
PSU
2.6.
Impr
ove
data
for t
he
sect
or.
2.6.
1. C
ollab
orate
with
the C
entra
l Stat
istics
Offi
ce an
d ot
her r
eleva
nt o
rgan
izatio
ns in
ord
er to
capt
ure d
ata o
n pr
o-du
cers,
mine
rs, m
ines,
prod
uctio
n hu
bs, w
orks
hops
, thr
ough
a de
tailed
surve
y of t
he se
ctor o
perat
ions
. This
activ
ity
will
have
the a
im o
f gett
ing a
bette
r pict
ure a
nd g
reater
ove
rview
of t
he p
recio
us st
ones
and
jewell
eries
secto
r.Im
prov
e the
avail
abili
ty of
data
on
the s
ecto
r to
facili
tate g
ap an
alysis
/ nee
ds an
alysis
and
impa
ct m
easu
remen
t of a
c-tiv
ities
thro
ugh
the p
ublic
ation
of a
com
preh
ensiv
e data
base
in th
e MoM
P’s w
ebsit
e.
1
• Co
mpr
ehen
sive d
ataba
se av
ailab
le th
roug
h th
e MoM
P’s w
ebsit
eM
oMP,
MoC
I and
Cen
tral
Stat
istic
s Of
fice
46
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
Stra
tegi
c ob
ject
ive
3 : C
reat
e an
d pr
omot
e an
Afg
han
prec
ious
sto
nes
and
jewe
llery
bra
nd.
Oper
atio
nal o
bjec
tives
Activ
ities
Prio
rity
1=hi
gh
2=m
ed
3=lo
w
Impl
emen
tatio
n pe
riod
Targ
ets*
Lead
and
sup
porti
ng
impl
emen
ters
2017
2018
2019
2020
2021
2022
3.1.
Rei
nfor
ce n
atio
nal
trade
and
inve
stm
ent
supp
ort i
nstit
utio
ns’ a
nd
sect
or a
ssoc
iatio
ns’
mar
ket i
ntel
ligen
ce.
3.1.
1. H
elp P
SU es
tablis
h a s
ystem
that
colle
cts an
d di
ssem
inates
info
rmati
on to
expo
rters
regul
arly.
• Ins
titut
iona
lize
the
use
of d
istan
ce le
arni
ng s
uppo
rt se
rvice
s on
mar
ket a
nalys
is by
trad
e an
d in
vestm
ent
supp
ort i
nstit
utio
ns.
• Co
nduc
t a m
arket
analy
sis o
f targ
et m
arkets
’ pot
entia
l for
Afg
han
prec
ious
ston
es an
d ha
ndm
ade j
ewell
ery.
1•
One r
epor
t per
targ
et m
arket
AWCC
I, AC
IM, F
ACT
and
PSU
MoC
I, an
inter
natio
nal r
esea
rch
com
pany
that
has e
xper
ience
in th
e se
ctor,
the s
ecto
r ass
ociat
ions
3.1.
2. S
treng
then
acce
ss to
the i
nter
natio
nal p
recio
us st
ones
and
jewell
ery n
etwor
k.
• Ro
ll ou
t a ca
pacit
y-bu
ilding
prog
ramm
e aim
ed at
trad
e rep
resen
tative
s, di
plom
ats an
d man
ager
s of o
verse
as
trade
offi
ces t
o en
able
them
to p
rovid
e be
tter a
dvice
to S
MEs
and
to p
repare
a rep
ort o
n op
portu
nities
and
the f
easib
ility
of ex
porti
ng a
selec
ted p
rodu
ct to
a tar
get m
arket.
• Tra
in co
mm
ercial
atta
chés
to b
uild
their
know
ledge
of t
he s
ecto
r so
they
can
pro
vide
nece
ssary
sup
port
to
Afgh
an ex
porte
rs.
2•
One a
nnua
l ses
sion w
ith em
bass
ies
in co
untri
es w
ith po
tentia
l mark
ets
for t
his se
ctor
• Tw
o tra
ining
s per
year
for a
ttach
és
AWCC
I, AC
IM, F
ACT
and
PSU
3.2.
Impr
ove
wom
en
prod
ucer
s’ a
cces
s to
m
arke
ts.
3.2.
1. Tr
ain w
omen
pro
duce
rs to
acce
ss d
omes
tic an
d int
erna
tiona
l mark
ets.
• An
alyse
the
role,
activ
ities
and
reach
of A
fgha
n as
socia
tions
des
igne
d to
enh
ance
the
role
of w
omen
in th
e co
untry
’s ec
onom
ic lif
e.•
Help
wom
en p
rodu
cers
to ru
n pu
blic
shop
s, at
least
in Ka
bul,
and
ensu
re th
eir sa
fety.
• De
velo
p sp
ecifi
c exp
ort-r
eady
capa
city-
build
ing ac
tiviti
es fo
r wom
en.
• En
sure
wom
en’s
parti
cipati
on in
exp
ort-r
eady
pro
gram
mes
by
alloc
ating
a n
umbe
r of s
eats
to w
omen
and
pr
omot
ing th
eir p
artic
ipati
on th
roug
h th
e di
fferen
t bus
iness
ass
ociat
ions
and
by
deve
lopi
ng a
n aw
arene
ss-
raisin
g ca
mpa
ign.
1•
Thirt
y wo
men
bus
ines
ses
from
th
ree
prov
ince
s ar
e ab
le to
ac-
cess
buy
ers
AWCC
Im
unici
palit
ies an
d M
oCI
3.3.
Impr
ove
mar
ket
links
and
vis
ibili
ty ( e
s-pe
cial
ly fo
r han
dmad
e pr
oduc
ts ).
3.3.
1. E
stabl
ish A
fgha
n pr
ecio
us st
ones
and
jewell
ery s
howr
oom
s in
cities
with
pot
entia
l ( ac
cord
ing to
secto
r ac
tors,
in th
e Unit
ed K
ingdo
m, I
taly a
nd G
erm
any )
.
• Co
llect
infor
mati
on o
n ex
isting
inter
natio
nal s
howr
oom
s and
exhib
ition
s.•
Orga
nize p
artic
ipati
on b
ased
on
a mark
eting
plan
.•
Deve
lop
mate
rials
for b
randi
ng an
d ad
verti
sing
of A
fgha
n pr
ecio
us st
ones
and
jewell
ery t
o be
han
ded
out a
t th
e sho
wroo
m /
exhib
ition
s.•
Train
attac
hés f
or ea
ch ex
hibiti
on to
hav
e a g
ood
mark
et un
derst
andi
ng o
f the
hos
t cou
ntry.
1•
Thre
e sh
owro
oms
outs
ide
Afgh
anist
an fu
nctio
nal
PSU,
AW
CCI,
ACIM
MoC
I, M
inistr
y of F
oreig
n Af
fairs
3.3.
2. E
nsur
e grea
ter p
artic
ipati
on in
inter
natio
nal t
rade f
airs t
o en
able
expo
rters
to m
eet i
nter
natio
nal b
uyer
s an
d str
engt
hen
the v
isibi
lity o
f Afg
han
com
panie
s.
• Or
ganiz
e trad
e mee
ts th
at wi
ll be
leve
raged
to p
rom
ote A
fgha
n ex
ports
.•
Prom
ote l
ocal
prod
ucts
thro
ugh
inter
natio
nal t
rade f
airs.
• Or
ganiz
e bila
teral
trade
facil
itatio
n fo
rum
s to
deve
lop
mark
et lin
ks.
• Tra
in M
oCI s
taff t
o ad
voca
te be
tter f
or se
ctor w
hen
nego
tiatin
g ag
reem
ents
at th
e int
erna
tiona
l lev
el
2•
Incre
ased
num
ber o
f int
erna
tiona
l tra
de fa
irs at
tende
d•
Increa
sed
num
ber o
f par
ticip
ating
co
mpa
nies
• M
oCI s
taff t
rain
ed o
n in
terna
tion-
al n
egot
iatio
ns a
nd a
gree
men
ts tw
ice a
year
MoC
I, AC
IM, P
SU, A
WCC
I
3.3.
3. H
elp p
rodu
cers
deve
lop
mark
eting
plan
s, wi
th co
nsid
erati
on o
f ava
ilabl
e too
ls an
d gu
ideli
nes.
• Tra
in fir
ms t
o sus
tain e
xistin
g bu
yer–
selle
r rela
tions
hips /
mut
ual t
rust
and
prov
ide t
rainin
g on
mark
eting
and
after-
sales
servi
ces,
digi
tal m
arketi
ng an
d on
line p
rom
otio
n, p
rom
otio
nal m
ateria
ls, et
c.•
Prov
ide t
rainin
g to b
uild t
he ca
pacit
y of S
MEs
to pr
oduc
e bus
iness
plan
s, fin
ancia
l plan
s, an
d sale
s and
mar-
ketin
g pl
ans i
n or
der t
o ac
cess
inter
natio
nal m
arkets
.
1•
Digi
tal m
arke
ting
plan
tem
plate
, to
ols a
nd g
uideli
nes a
vaila
ble
PSU
AWCC
I, AC
IM
* Ta
rget
s ar
e in
dica
tive
only
and
will
be
the
subj
ect o
f fur
ther
refin
emen
t at b
egin
ning
of t
he im
plem
enta
tion
man
agem
ent s
tage
. Sim
ilarly
, the
lead
an
d su
ppor
ting
impl
emen
ters
col
umn
rem
ains
indi
cativ
e be
caus
e im
plem
enta
tion
will
requ
ire c
olle
ctiv
e ef
forts
, so
addi
tiona
l ins
titut
ions
may
be
adde
d.
[ STRATEGIC PLAN OF ACTION ]
47
Stra
tegi
c ob
ject
ive
3 : C
reat
e an
d pr
omot
e an
Afg
han
prec
ious
sto
nes
and
jewe
llery
bra
nd.
Oper
atio
nal o
bjec
tives
Activ
ities
Prio
rity
1=hi
gh
2=m
ed
3=lo
w
Impl
emen
tatio
n pe
riod
Targ
ets*
Lead
and
sup
porti
ng
impl
emen
ters
2017
2018
2019
2020
2021
2022
3.4.
Impr
ove
Afgh
anis
tan’
s re
puta
-tio
n an
d pr
esen
tatio
n in
in
tern
atio
nal m
arke
ts.
3.4.
1. O
rgan
ize b
rand
aware
ness
wor
ksho
ps o
n ho
w th
e int
erna
tiona
l rep
utati
on o
f a co
mpa
ny o
r sec
tor c
an
be im
prov
ed. L
earn
bes
t prac
tices
on
bran
d str
ategy
, des
ign
and
impl
emen
tatio
n, an
d ad
aptin
g to
the s
ecto
r an
d m
arket.
2•
At le
ast tw
o bran
d awa
renes
s wor
k-sh
ops o
rgan
ized e
ach y
ear i
n main
pr
ovinc
es
MoC
I–EP
AA, A
CIM
, ACC
I, AW
CCI,
ICC,
secto
r ass
ociat
ions
3.4.
2. C
oord
inate
servi
ces o
ffered
by A
fgha
n pr
ecio
us st
one a
nd je
welle
ry tra
de an
d inv
estm
ent s
uppo
rt ins
ti-tu
tions
and
priva
te se
ctor p
rovid
ers t
o es
tablis
h a j
oint
nati
onal
prog
ramm
e on
bran
ding
, pro
mot
ion,
mark
et-ing
and
labell
ing o
f pro
ducts
. The
obj
ectiv
e is t
o rai
se fi
rms’
aware
ness
; pro
vide c
ompl
ete in
form
ation
abou
t av
ailab
le se
rvice
s, ad
vice a
nd su
ppor
t ; an
d inc
rease
the v
isibi
lity a
nd im
prov
e the
visu
al as
pect
of A
fgha
n pr
ecio
us st
ones
and
jewell
ery.
Unive
rsitie
s and
cons
ultin
g fir
ms s
houl
d be
invo
lved.
Deve
lop
mark
eting
and
bran
ding
tool
s, e.g
. web
site,
leafle
ts, b
roch
ures
, cata
logu
es an
d a m
onth
ly m
agaz
ine.
1•
Map
ping s
ervice
prov
ider i
denti
fied
• Ef
fect
ive
use
of b
rand
ing
by
oper
ators
• Jo
int
natio
nal
prog
ram
me
on
bran
ding
estab
lishe
d
MoC
I–EP
AA, A
CIM
, ACC
I, AW
CCI,
ICC,
secto
r ass
ociat
ions
, ent
repre-
neur
s gro
up
3.4.
3. P
rovid
e trai
ning
and
capa
city-
build
ing o
rgan
ized
aroun
d di
fferen
t mod
ules
( cor
porat
e bran
ding
, col
lec-
tive b
rand
man
agem
ent,
labell
ing, p
acka
ging
, qua
lity m
anag
emen
t, tra
ceab
ility,
etc.
). M
odul
es ca
n be
dev
el-op
ed o
n an
incr
emen
tal b
asis
with
new
one
s bein
g ad
ded
over
tim
e, de
pend
ing o
n de
man
d.
1•
At le
ast t
wo tr
ainin
g wo
rksh
ops
orga
nize
d ea
ch y
ear
in m
ain
prov
inces
MoC
I–EP
AA, A
CIM
, ACC
I, AW
CCI,
ICC
3.4.
4. P
rovid
e spe
cific
advis
ory s
ervic
es to
secto
r ass
ociat
ions
and
selec
ted S
ME
cluste
rs in
the p
recio
us
stone
s and
jewe
llery
indus
try.
• As
sess
firm
s’ br
and
com
mun
icatio
ns an
d th
e stre
ngth
of t
heir
valu
e pro
posit
ion
to cu
stom
ers.
• Te
st th
e dem
and
for p
rodu
cts w
ith re
al cu
stom
ers a
nd p
rofes
siona
l buy
ers.
• De
sign
pack
aging
that
corre
spon
ds to
mark
et req
uirem
ents
and
show
s the
pro
duct
to it
s adv
antag
e.•
Bran
d aw
arene
ss : l
earn
bes
t pra
ctice
s on
bra
nd s
trateg
y, de
sign
and
impl
emen
tatio
n, a
dapt
ed to
the
sec-
tor a
nd m
arket.
• Br
and
plan
: stru
cture
a plan
that
is us
ed to
dev
elop
desig
ns, c
omm
unica
tions
and
prod
ucts.
• Br
and
kit : d
esig
n an
d pr
oduc
e the
mark
eting
colla
teral
asso
ciated
with
the b
rand
desig
n.
1•
Sect
or-sp
ecifi
c ad
visor
y se
rvice
s es
tablis
hed
• On
e uniq
ue b
rand
aware
ness
plan
MoC
I–EP
AA, A
CIM
, ACC
I, AW
CCI,
ICC
3.4.
5. D
evelo
p a s
et of
self-
learn
ing co
urse
s and
mate
rials
tailo
red to
the p
recio
us st
ones
and
jewell
ery s
ec-
tor t
hat c
ompa
nies c
an u
se to
educ
ate th
emse
lves o
n th
e im
porta
nce o
f bran
ding
and
how
to ef
fectiv
ely b
rand
their
offe
rings
, esp
ecial
ly in
inter
natio
nal m
arkets
.
2•
Self-
learn
ing co
urse
s and
mate
rials
deve
lope
d an
d us
edM
oCI–
EPAA
, ACI
M, A
CCI,
AWCC
I, IC
C
Photo: ITC
[ REFERENCES ]
49
REFERENCES
ACCI ( 2014 ). Business Policy Recommendations. Afghanistan National Business Forum, 27 February.
Afghanistan, Central Statistics Organization ( 2017 ). Year Book 1395 ( 2016–2017 ).
Afghanistan, Ministry of Commerce and Industries ( 2009 ). Afghanistan SME Development Strategy.
Afghanistan, Ministry of Industry and Commerce and Ministry of Mines and Petroleum ( 2014 ). Implementing the SME Strategy : An Updated Action Plan for Developing Afghanistan’s Gemstone and Jewellery Industry December 2014–November 2017.
Afghanistan, Ministry of Labour, Social Affairs, Martyrs and Disabled ( 2009 ). Baseline Data for the Quality of TVET Provision in Afghanistan. National Skills Development Programme.
Afghanistan, Ministry of Mines and British Geological Survey ( 2007 ). Minerals in Afghanistan – Gemstones of Afghanistan. Available from www.bgs.ac.uk / afghanminerals / docs / gemstones_a4.pdf.
Afghanistan Research and Evaluation Unit ( 2006 ). Going to Market : Trade and Traders in Six Afghan Sectors.
Centre for the Promotion of Imports from Developing Countries. Through what channels can you get jewellery onto the European market? Available from https : / / www.cbi.eu / market-information / jewellery / channels-segments /
Euromonitor International ( 2017 ). Jewellery in China. Available from www.euromonitor.com / .
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Euromonitor International ( 2017 ). Jewellery in Switzerland. Available from www.euromonitor.com / .
Euromonitor International ( 2017 ). Jewellery in the United Kingdom. Available from www.euromonitor.com / .
Euromonitor International ( 2017 ). Jewellery in the United Arab Emirates. Available from www.euromonitor.com / .
Euromonitor International ( 2017 ). Jewellery in the USA. Available from www.euromonitor.com / .
Food and Agricultural Organization of the United Nations ( 2015 ). Empowering Women in Afghanistan – Reducing Gender Gaps through Integrated Dairy Schemes. Rome.
Ghiasy, Richard ; Zhou, Jiayi and Hallgren, Henrik ( 2015 ). Afghanistan’s Private Sector : Status and Ways Forward. Stockholm International Peace Research Institute and International Council of Swedish Industry.
Harakat Investment Climate Organization and ACCI ( 2014 ). Private Sector Priorities for Reform for London Conference.
International Labour Organization ( 2015 ). Selecting the Road to More and Better Jobs : Sector Selection Report of the Road to Jobs Project in Northern Afghanistan.
Islamic Republic of Afghanistan ( 2008 ). Afghanistan National Development Strategy.
ITC ( 2017 ). Reconnecting Afghanistan to global markets – an ITC assessment of export potentials and trade obstacles ( unpublished ).
ITC ( 2016 ). Enhance export capacities of Asia’s least de-veloped countries for intraregional trade – Afghanistan’s exports to China ( unpublished ).
ITC ( 2017 ). Trade Map. Available from www.trademap.org / Index.aspx. Accessed 20 November 2017.
McColm & Company ( 2015 ). Case study : Accelerating value chain development in Afghanistan’s gemstone jewelry sec-tor. Available from www.mccolmandco.com / insights / -accel-erating-quality-jewelry-production-in-kabul.
Turquoise Mountain ( 2017 ). Turquoise Mountain Lookbook. Available from ht tp : / / turquoisemountain.org / up-loads / PDFs / Turquiose-Mountain-Lookbook-copy.pdf.
World Bank ( 2016 ). Afghanistan – Systematic Country Diagnostic. Washington, D.C.
World Bank ( 2016 ). Regional trade & transit : opportunities and challenges for Afghanistan. Background Technical Brief. Washington, D.C.
50
[ AFGHANISTAN’S NATIONAL EXPORT STRATEGY / PRECIOUS STONES AND JEWELLERY SECTOR 2018-2022 ]
World Bank ( 2015 ). Afghanistan – Country Snapshot. Washington, D.C.
World Bank ( 2012 ). Afghanistan Diagnostics Trade Integration Study. Washington, D.C. Available from http : / / documents. worldbank.org / curated / en / 373301467992809220 / Afghanistan-diagnostics-trade-integration-study.
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AFGH
ANISTAN
• NATIO
NAL EXPO
RT STRATEG
Y - PRECIOUS STONES AND JEW
ELLERY SECTOR •
2018-2022