KABUL — In a cramped workshop, reeking of glue and stuffed with piles of plastic straps and rubber soles, half a dozen men and boys hunched over scarred tables last week, scraping and hammering, stitching and gluing. By day’s end, they would produce 70 pairs of women’s sandals, ready to send to street bazaars at a deeply discounted price of $8 each.
Economy
As the Afghan economy crumbles, small businesses struggle to hang on – The Washington Post
“We don’t make men’s shoes anymore. All the men are jobless,” explained Abdul Bashir, 55, the workshop’s owner. He has been making shoes his entire adult life — through a civil war, stints of communist and Islamist rule, a ruinous flood of cheap Chinese footwear, and two decades of conflict between Taliban and U.S.-backed Afghan forces.
Now, eight months after the Taliban takeover of the country, he and other small-business owners are confronting their direst crisis to date. Sales everywhere are down drastically. The new rulers have promised some relief, including partial forgiveness of back taxes and a slight reduction in the income tax. But many are doubtful that token gestures will reverse their plummeting fortunes.
“Reduced taxes will not help us if we cannot sell anything, meet the rent or keep our workers paid,” said Bashir, whose enterprise is one of about 120,000 small businesses in Kabul, ranging from beauty parlors to clay-oven makers. “We are eating all our income,” he lamented.
But Taliban authorities are pursuing more-sweeping changes. With almost all foreign aid, bank business and financial transactions halted, officials say they hope to boost domestic revenue by ending decades of corruption, modernizing government financial systems and creating confidence among local business owners.
Najeeb Ahmadjan, an official at the government’s Revenue and Tax Administration, personifies this vision. If successful, he said, their efforts should help ease the country’s economic crisis — and prove to Afghans and the world that the new rulers are both capable and committed.
“Before the Islamic Emirate came, there was much more economic activity and international support. But there was also a lot of corruption,” Ahmadjan said, using the Taliban’s name for its government. “Now, there is much less support but much less corruption, and much more commitment from the top. Government employees feel more energy, and public taxpayers feel more trust.”
In market stalls, workshops and one-room offices across the capital, the consensus seems to be that the Taliban has good intentions but has not yet figured out how to help small businesses, let alone manage a large, badly ailing economy. Some merchants expressed frustration and anger. Others had almost given up in despair.
At a metal-roofed block of furniture showrooms filled with beds, desks and wardrobe chests, owner Yasin Hamidullah said he had sold only one piece in the past month, a large cabinet that he let go for $60. He had just borrowed money to pay his monthly rent of $150, mostly to have a safe place to store his unsold inventory.
“When we had foreign customers, we could hardly keep up with the demand. Now they have all left and nobody comes to buy,” Hamidullah said. He decided not to pay his last income tax bill of $250, expecting to get the promised tax break, but it never came. “I feel cheated,” he said. “I am still paying the same tax I paid five years ago — and we are selling nothing.”
Several miles away, in a maze of auto parts shops with mufflers and mirrors dangling from the ceilings, Samir Ahady is facing a different problem. The shelves in his store are lined with car batteries from Japan and Thailand. Since the Taliban raised customs fees, he said, his cost per battery has gone up from $90 to $100, while his sales have cratered.
“I have noticed some positive changes. Taxes are faster and easier to pay,” Ahady said. “But the prices are all higher, people have no jobs and they can’t afford to keep their cars fixed.”
“My income is 80 percent down, and my whole life has changed,” he added. “No more family picnics, no more meat with dinner, beggars everywhere. The future is totally unclear.”
Noor Ulhaq Omeri, who heads the capital’s association of small businesses and artisans, has a more patient approach to dealing with the new authorities. He has met repeatedly with Taliban officials and proposed various forms of tax relief. Most have been turned down so far, but he still has hope.
“For many years, the system was bad and there was a lot of corruption. You had to pay bribes for everything,” said Omeri, 55. “The new authorities do seem committed to fixing this problem, and we are happy about that, but they have been far away from governing for a long time. They may be honest, but there is a distance. People want to cooperate, but they are still mistrustful.”
Across the capital, in 22 neighborhood tax offices, daily interactions between small-business owners and new government officials are beginning to bridge that gap. In Khushal Khan, a busy mixed-income district, the tax office director, Obaidullah Omarkhel, has been on the job for just six weeks.
On a recent morning, Omarkhel sat at his desk, which was empty except for a stack of large detailed maps of the district. Every few minutes, another taxpayer entered hesitantly with a sheaf of papers in hand. Omarkhel reviewed the papers carefully, then signed and handed them back with a few pleasantries, sending the customer to a nearby office to pay.
“I want to be sure not to make any mistakes,” Omarkhel said. “We want to encourage people to pay, not to force them.”
While acknowledging the country’s long struggle with official corruption, he said he reassures his customers that things are different now. “I tell them the past is past,” he said. “I am here now, and this is my responsibility.”
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VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
The Canadian Press. All rights reserved.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
The Canadian Press. All rights reserved.
HALIFAX – The Nova Scotia government has introduced a bill that would kick-start the province’s offshore wind industry without federal approval.
Natural Resources Minister Tory Rushton says amendments within a new omnibus bill introduced today will help ensure Nova Scotia meets its goal of launching a first call for offshore wind bids next year.
The province wants to offer project licences by 2030 to develop a total of five gigawatts of power from offshore wind.
Rushton says normally the province would wait for the federal government to adopt legislation establishing a wind industry off Canada’s East Coast, but that process has been “progressing slowly.”
Federal legislation that would enable the development of offshore wind farms in Nova Scotia and Newfoundland and Labrador has passed through the first and second reading in the Senate, and is currently under consideration in committee.
Rushton says the Nova Scotia bill mirrors the federal legislation and would prevent the province’s offshore wind industry from being held up in Ottawa.
This report by The Canadian Press was first published Sept. 10, 2024.
The Canadian Press. All rights reserved.
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