When it opened, inside huge white sheds that once held PVC piping machinery but is now home to high-tech German injection molding and boot-making equipment, Afghan and U.S. generals were keen to be photographed alongside a local success story.
Saffi's Milli Boot Factory, in Kabul's sprawling industrial hinterland, was a model for Afghanistan, showcasing local manufacturing while giving jobs to hundreds of people who may otherwise have picked up insurgent guns.
But a U.S. decision to hand procurement to the Afghan government has left Saffi with something of a developed world problem - local officials opted for cheaper boots made in China and Pakistan, killing off Milli's contracts after a year.
"The U.S. government told me when I started I would have contracts for five years, until at least 2014," he told Reuters. "The Afghan government gave me only three months notice of cancellation and now I have $30 million worth of raw material I can't use."
Saffi sold his leather boots, which underwent a rigorous quality testing process in the United States, for $62 a pair, while Chinese-made boots with imitation leather cost the Afghan government $22 in a contract for up to 700,000 pairs a year.
"The Afghan government is just looking for the lowest price," he said, surveying a room piled high with rolls of leather and raw material bought from Taiwan.
"They asked me to sell for $15 a pair, but the leather alone cost me $40. The Chinese boots use fake leather and quickly fall apart, but they are cheap."
NATO-led forces, who have mostly handled purchasing for the Afghan security forces in the decade-long war, have since 2010 operated under "Afghan First" rules requiring them to buy where possible from local companies, boosting the economy and employment while underpinning anti-insurgent strategies.
Contracts for Afghan businesses included 100 percent of Afghan uniforms and boots, textiles, furniture, tents, software and transformers, according to NATO data.
Those contracts spawned 15,000 jobs, while making savings on imports for combat-related spending worth $650 million - still a fraction of the estimated $200 million spent on the war a day.
U.S. military officials say the decision to hand a large slice of procurement to the Afghans was made in March, with responsibility handed over to the Defence and Interior Ministries.
Milli is not the only company to fall foul of the switch to local procurement, with several uniform and equipment suppliers either nervously eyeing soon-to-expire contracts, or having already lost orders to cross-border competitors.
A rival company executive, who asked not to be named because his firm fears retribution from Afghan military buyers, said, like Milli, he had invested millions of dollars into his business, but his supply contracts were now in limbo.
The Afghan First Policy backs anti-insurgency efforts by ensuring that people employed locally with better jobs and incomes aren't tempted to join the estimated 25,000 Afghan Taliban fighters in the country, often called the '$10-a-day Talib', referring to the payment offered to would-be fighters.
Workers at the factory earned between $400 and $900 a month, well over the average wage in a country where up to a third of the 30 million population live under the poverty line.
Lieutenant-General Abdul Basir Asafzari, who heads logistics and procurement in the Ministry of Defence, said only 30 percent of supply currently was coming from Afghan companies, and President Hamid Karzai had also ordered the military to choose local firms where possible.
The reason Milli had contracts cancelled was because it was importing low-quality boots from China and other countries and relabeling them, he said.
"Milli boot company did not fulfill its commitments. There were some complaints from soldiers about the quality," Asafzari said.
But Mohammad Akbar Ahmadzai, from the NGO Building Markets, which helps build jobs and investment in developing countries by supporting entrepreneurs, said Milli's boots had been genuine and met U.S.-based quality tests.
Other business experts, who would only comment anonymously, said Milli and others may have fallen foul of Afghanistan's labyrinth of bribe and patronage payments, with better-connected competitors maneuvering to kill them off.
NATO's Kakiel said Milli and others may also have misunderstood complex contract provisions which stipulated only one year of guaranteed sales.
But an audit by the U.S. government's Special Inspector General for Afghanistan Reconstruction, or SIGAR, released in January, said the Afghan First Initiative (AFI) had been marred by inadequate contract solicitation and vetting, while data on claimed employment benefits had been limited.
Read more of the story at the link for the article above.
It seems to me that there is an obvious trade-off in recycling dollars back into a local economy, and labor pool, and buying cheaper products elsewhere. Where along the cost benefit graph the lines exactly cross is unclear, but the basic pattern is too simple to dismiss out of hand.
Of course, I'm not an economist. But, as Bob Dylan sang, you don't need a weatherman to know which way the wind blows.
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