Investors head for Afghanistan
By Mike Patterson
KABUL: Foreign investors are preparing to pour billions of dollars into Afghanistan as the country struggles to regain its place in the global economy, according to Commerce Minister Sayed Mustafa Kazemi.
While US Defense Secretary Donald Rumsfeld just declared an end to major combat operations in Afghanistan, foreign businessmen have already been sounding out opportunities in the war-ravaged country.
“Since the fall of the Taliban we have been focusing on attracting foreign investors and businessmen,” Kazemi told AFP in an interview.
Entrepreneurs, however, have complained of the weak rule of law, excessive bureaucracy and corruption. The minister said Kabul had cut red tape to make it easier to obtain business licences. “We have done some work but we still have more to do.”
While security problems deterred some investors, Kazemi said there were plenty of “brave” ones. “In a country like Afghanistan — which has been a war zone for 23 years — minor clashes between the different groups are not unusual but in general itit’s not that much of a concern,” he said.
“There are those investors or businessmen who are afraid they don’t have the capability or courage, but there are many brave businessmen who are doing business with Afghanistan and they are still doing it.” One US firm was planning to build four cement factories with an initial investment of 400 million dollars, which would rise to as much as 1.5 billion badly-needed dollars, he said.
Details are expected to be announced shortly. Afghanistan’s 2002 gross domestic product (GDP) was an estimated 4.4 billion dollars, according to an Asian Development Bank report last week, with per capita GDP just 170 dollars.
Chinese, Turkish and Iranian firms have also expressed interest in the cement business, which is vital to reconstruction.
In the past three months, 3,500 investment proposals were registered, ranging from 20,000 dollars to 180 million, he said.
A Hyatt hotel project carried a tag of about 50 million dollars while construction of the Kabul Hotel is estimated at 27 million dollars. Kazemi said he had earlier in the week received proposals from Afghan-US joint ventures to invest in the air transport, energy and agriculture sectors. Other investors were looking to funnel 160 million dollars into the repair of 12 gas wells in the northwest and extending a pipeline from Shebergan near the Turkmenistan border to the main northern city of Mazar-i-Sharif.
While Afghanistan was working to attract investment, Kazemi said the landlocked country was also looking beyond its traditional Pakistan gateway to international markets. “We’re trying to open all the gates, all the ways to do business,” said the minister.
To this end, Afghanistan has started negotiations to develop export markets for its carpets, handicrafts, dried fruit and nuts and medicinal herbs.
In January, the United States eliminated tariffs on 5,700 Afghan products and is due to extend duty-free status to carpets and textiles in June. Afghan exports have been boosted by the return of hundreds of thousands of refugees from Pakistan who had been in the carpet business, he said.
In 2002 Afghanistan exported 60,000-70,000 square metres of carpet, “but last month we were able to export the same amount as in the whole of last year,” he said.
New Delhi, a firm friend of the new Afghan government, has also waived duty on 11 goods and halved it on a further 27. “India is the best market for exporting Afghan goods,” he said, pointing to the long relationship between the two countries.
The minister said Afghanistan had major plans for trade with India. “We will be able to kick our competitors out of the Indian market very soon,” he said. While Afghanistan’s plans sound ambitious for a country reeling from decades of conflict, Kazemi points out how modest they really are.
“We want to regain the place we had 30 years ago. We’re working very hard to get to the place we had in world markets 30 years ago.” —AFP