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Business Opportunities in Afghanistan and Central Asia Ambassador Said T. Jawad


U.S. Department of Commerce, Business Information Service for the Newly Independent States (BISNIS)
04/04/2006

Thank you, Good Morning!

Your Excellencies,
Ambassador Zaripov of Tajikistan,
Ambassador Kamilov of Uzbekistan,
Ambassador Saudabayev of Kazakhstan,
Ambassador Sydykova of Kyrgyzstan,
Mrs. Holly Vineyard, Mr. Moore,

Under Secretary Lavin,
Deputy Assistant Secretary Gastright,
Distinguished Guests, Ladies and Gentlemen,

I would like to extend my sincere gratitude to the Director and staff of BISNIS and the U.S. Department of Commerce for organizing this forum today. We are grateful for Secretary Gutierrez and Ambassador Lavin’s leadership.

I am honored to be here with you this morning to discuss business opportunities in Afghanistan and Greater Central Asia.

Ladies and Gentlemen,

There are two key factors to facilitate trade: first market oriented investment and trade policies; and second physical infrastructure.

In our region, we usually have one of them in place; not both at the same time. In some of our countries, trade and investment policies are reformed; but the physical infrastructure needs further investment. In other countries, relatively adequate physical infrastructure is in place, however restrictive policies and outdated procedures hinder trade and investment to flourish to its full potential.

Today, trade within Central Asian countries continues to be a small fraction of the total region’s trade. Comparing to our potential, we are under trading with each other. The ratio of the actual to potential trade among Central Asian countries is 0.3% or less than one third. The reason includes underdeveloped infrastructure; but we need to work together to remove restrictive policies and adopt a coordinated investment and trade strategy based on free market economy principles.

To achieve the tremendous potential of trade and commerce in our region, we must overcome two types of challenges: first, political challenges due to geopolitical legacies, regional uncertainties, terrorism and narcotics. Second, economic challenges of adopting better and transparent policies to provide for a lower cost of doing business, especially in transport and transit costs; access to trade finance and insurance; and harmonizing our trade, custom and banking procedures.

By further reforming our trade and investment policies to provide for a secure investment environment and guaranteed return on investment, we will also insure further investment by donors and investors in improving the physical infrastructure.

Historically, and as late as the 19th century, some of the largest volume of commerce in the world was conducted in our greater region. In the 20th century the Soviet policy of building the Iron Curtain destroyed trade and commerce in our region. Wrong policies can destroy trade and investment.

In Afghanistan today, we are completing the process of adopting new laws, reforming our trade and investment procedures; and rebuilding our roads and highways to facilitate trade in the region.

Due to our partnership with the United States of America and the international community, and adopting free market-friendly policies, in the past four years, we have reached double digit economic growth rates. We have introduced a new constitution, a liberal investment law allowing for 100% foreign direct ownership and full repatriation of profits, as well as new laws on Banking, Customs, Anti-Money Laundering, Taxation, Minerals and Hydrocarbons to name a few.

We have created the Afghan Investment Support Agency (AISA) as a one-stop shop to facilitate and promote investment in Afghanistan, and have also established three new industrial parks. We issue a business license within three days.

The World Bank’s Investment Climate Survey of Afghanistan in December 2005 shows that the registration process in Afghanistan is one of the quickest in the world. The U.S. Trade & Development Agency awarded Afghanistan as the country of the year this year for reforming and enhancing the business environment in Afghanistan. We provide fast business registration, favorable taxation, and opportunities for investment in all sectors of our economy.

Afghanistan has re-entered the global marketplace and is quickly becoming reintegrated with the private sector as the driver. More than 3,000 new investment projects have been registered in the country, totaling $1.3 billion with almost half coming from foreign investment. Today, 13 foreign banks are operating in the country.

Building our physical infrastructure and roads has been the first priority of President Karzai. Thanks to United States of America and our friends in Europe, Japan and the region, funding is in place and work is under way to rebuild our 3300km of national highways. With the completion of the reconstruction of our roads, all Central Asian capital cities will be less than 32 hours from the Persian Gulf and the Indian Ocean. We think that all roads in Central and South Asia lead to Afghanistan.

Today, Afghanistan is once more playing its historic role in bridging cultures, countries and civilizations. Afghanistan is uniquely located at the heart of Central Asia connecting the region’s resourceful countries with profitable emerging markets. We are in favor of creating trust funds, such as the “Central- South Asian Transport Corridor Fund” to finance regional infrastructure projects and ask our neighbors to consider “Border Trading Zones” with Afghanistan.

Our next greatest priority is in Energy and we look forward to investment in energy generation and energy transit.

The US Geological Survey has recently completed an assessment of Oil & Gas resources of Afghanistan indicating that our resource base is significantly greater than previously understood. These new estimates increase our oil resources at the north by 18 times to 3.6 million barrels, and more than triple our natural gas resources.

Other investment opportunities include minerals, cement, construction materials, carpets, textiles, food processing and agri-business, as well as cold storage, transport and insurance services.

We believe that trade and investment not only provides for the much needed economic growth in the region, but also is key to regional stability.

We have signed onto numerous agreements and entered into a number of new partnerships with our friends in Central Asia.

In 2002, the “Kabul Declaration on Good Neighborly Relations” was signed. Our membership to the Economic Cooperation Organization was further enhanced when we hosted the annual conference of ECO last year in Kabul. We also held the Regional Conference on Economic Cooperation in Kabul in December 2005, where the “Kabul Declaration on Regional Economic Cooperation” was signed by eleven regional countries.

This week, a two-day international conference is being held in Kabul in partnership with Johns Hopkins University on “Cooperation, Trade and Development in the Greater Central Asia”.

Furthermore, we are parties to several forums and initiatives to address regional trade barriers and integration including the Central Asian Cooperation Organization, the Shanghai Cooperation Organization, and the Central Asian Regional Economic Cooperation.

Last November we joint SAARC or South Asian Association for Regional Cooperation, and have started our accession to World Trade Organization or WTO.

We have excellent relations with our Central Asian friends and are pursuing further economic cooperation. For example, our trade with Pakistan has increased by 2000% as compared to the Taliban period. Similar potentials exist with our neighbors to the North.

We are working with Turkmenistan on the Turkmenistan-Afghanistan-Pakistan and India energy pipeline.

The potential for trade with Uzbekistan is much larger due to the good infrastructure in place between our countries. We are working closely with the government of Tajikistan on power transmission and building bridges over the Amu River.

There is a great potential for expanding our trade relations with Kazakhstan, as well as Kyrgyzstan. Though we do not share a border, we share many common values and interests with Kazakhstan.

In sum there are many investment opportunities in Afghanistan and our region today. Our Embassy’s Economic, Trade & Investment Department published a Business & Investment Resource Guide for Afghanistan. Copies are available. We have also created a website called Afghanistan Business Gateway to provide you with a wealth of information online on trade & investment opportunities. Please join us in this exciting time of our history. While the extremists are trying to build walls, we are building bridges. The Afghan people welcome you very warmly, and value your friendship and partnership. Investment in Afghanistan is investment in global security.

Thank you.