While there are some improvements in Afghanistan’s performance compared to 2018, further steps must be taken to build on the work done. Particular attention should be given to strengthening the country’s regulatory effectiveness.
Breach of State obligations continues to be the lowest risk and is on the same level as last year. It is followed by unpredictable policy and regulatory change and discrimination between foreign and domestic investors. The risk level for these two areas has decreased compared to 2018.
Afghanistan’s performance is moderate on three of the EIRA indicators, and it is good on one indicator. The country has maintained a score of 65 on the indicator rule of law. On management of decision-making processes, it has improved by 7 points and now stands at 56. The scores for foresight of policy and regulatory change (55) and regulatory environment and investment conditions (47) remain unchanged from 2018.
On a more detailed level, Afghanistan’s overall subindicator performance is moderate. Management and settlement of investor-State disputes continues to be the highest-scoring sub-indicator with 80 points. On communication of vision and policies (73) and restrictions on FDI (60), it has received the same scores as in 2018. The performance on institutional governance has improved by 12 points and on transparency by 2 points. The two sub-indicators are at 56. On respect for property rights (50) and robustness of policy goals and commitments (38), no changes have been observed. Regulatory effectiveness is again the lowest-scoring sub-indicator with 33 points.