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restrictive policies and outdated procedures hinder trade and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.
