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President Karzai's Opening Address at the Afghanistan Development Forum
Released by Office of the Spokesperson to the President


Distinguished guests,

May I extend a warm welcome to the participants in this year's Afghanistan Development Forum, the third to take place since the historic Bonn Agreement, and the first to be hosted by Afghanistan's newly elected Government. I thank the team of organisers, including the various ministries of our Government, and their colleagues from international institutions.

Ladies and gentlemen,

For more than two decades, a combination of factional conflict, interference from abroad, and neglect from the international community had reduced Afghanistan to a failed State, a haven for international terrorism, and a centre for poppy cultivation and drug production. When we began three years ago the task of rebuilding a country that had suffered more destruction than any other in the 20th century, we were aware all too well that the journey was going to be long and arduous. Nonetheless, we took heart in our people's determination, as well as in the wholehearted support from the international community.

Over the last three years, in partnership with the international community, we have made significant progress. Security, a precondition for our accomplishments in other areas, has greatly improved. As part of the international coalition against terrorism, we have fought and diminished terrorist forces in Afghanistan. The training and development of the Afghan National Army and the National Police is progressing smoothly. The collection of heavy weapons is almost complete; about 45,000 former combatants have been disarmed; and illegal armed militias around the country are being decommissioned.

Over the last three years, some 3.8 million Afghan refugees returned home. Two Loya Jirgas were convened; Afghanistan's new Constitution was adopted; our first Presidential election was held with a popular turnout of men and women across the country. As our independent election commission recently announced, our parliamentary elections will be held in September this year. Today in Afghanistan, democracy is taking roots; our media is free and a growing sense of freedom after decades of suppression is evident.

Afghanistan's economic growth was 29 percent, 16 percent and 8 percent successively over the last three years. This growth was facilitated, among other things, by fiscal reforms, including the introduction of a new currency, institutional reform, and improving the regulatory framework for investment and private sector growth. The Afghanistan Investment Support Agency (AISA), created almost two years ago, has proven itself a valuable asset to prospective investors exploring opportunities in Afghanistan. Employment has risen, as has the average labour wage. Our trade, especially with our neighbouring countries, has grown substantially. For example, the value of trade with Pakistan, which stood at under 50 million dollars three years ago, is currently around one billion dollars.

We have improved and expanded the delivery of health, education and other services to the population. Through the National Solidarity Programme, the government has reached 7,500 villages, covering over a quarter of our population, including for the first time very remote areas of the country. Over 6 million children throughout the country received polio vaccinations last year. A Basic Package of Health Services has been extended to over half of the country. School enrollment has risen to the highest in history of Afghanistan. Today, close to six million children are attending classes at more than 7,000 schools across the country. Enrolment in higher education institutions also increased from 4,000 in 2001 to 40,000 today, of which 19 percent are women.

We have prioritised the rebuilding of infrastructure and institutions. Roads are being rebuilt throughout Afghanistan. In addition to the primary roads, consisting of Afghanistan's national ring-road, and roads connecting us to our neighbouring countries, over 2,500 km of secondary or provincial roads are also being rebuilt. The communication sector has made considerable progress, with Afghanistan being the largest and the fastest growing market for the mobile phone industry in the region. Since creating the infrastructure for power generation within Afghanistan requires more time, we have responded to needs of our people by importing electricity from our neighbouring countries.

Despite these accomplishments, the challenges still facing Afghanistan are immense. Human development indicators for Afghanistan remain among the worst in the world. Poppy cultivation is threatening Afghanistan's potential to prosper through a legitimate economy. We have expanded education and health services, but improving the quality of these services remains a substantial challenge. The job market in Afghanistan has grown substantially, but much of the market for skilled and semi-skilled labour has been filled by labour imported from abroad. The scale of foreign investment has remained very small, largely hampered by the absence of infrastructure, such as roads and electricity, and a lingering legacy of corruption and red-tape.

Ladies and gentlemen,

In my election manifesto, I presented to the Afghan people my vision of a stable, democratic and prosperous Afghanistan, and gave a promise that I will lead Afghanistan towards that vision. I promised that, over the next five years, Afghanistan's income per capita will rise from today's $200, to at least $500; that the present level of poverty will be reduced by half, and that education, health and clean drinking water will be made available to a much greater number of Afghanistan's citizens. Today, we are keenly aware of our people's expectations, and our responsibility towards them.

In pursuing a more aggressive agenda for economic growth, we must accelerate the process of rebuilding Afghanistan by focusing primarily on two spheres: First, rebuilding the infrastructure, and second, developing human and institutional capacity. Over the next few months, my government will update and improve its National Development Strategy in collaboration with our partners in the international community. In the meantime, in the context of the above two priority spheres, allow me to outline a number of specific focus areas:

First: In the Sphere of Rebuilding the Infrastructure:

1. We need to expedite and accelerate building of the physical infrastructure of the country that will provide the foundation for economic activity. Roads will continue to be a priority. However, now that our major roads are either being, or planned to be, rebuilt, our emphasis will shift to an equally vital field: water and electricity. We need to focus on energy generation and transmission, as well as irrigation and management of water to ensure that scarce water resources are used more productively.

2. In order to strengthen the economic base of the country, fight poppy cultivation and enhance rural livelihoods, we will continue to focus on developing rural infrastructure. Our rural development programmes will continue to grow, and will be complemented by a national agricultural programme, aimed at increasing agricultural productivity, and a programme of providing alternative livelihoods to the poppy affected communities. To capture the competitive advantage of our agricultural output and commercialise the agriculture sector, we must speedily lay the foundation for a strong agribusiness.

3. To enhance Afghanistan's potential as a trade and transit route in the region, it is vital that we improve our transport capacity, including the aviation industry, and our telecommunications facilities.

4. Housing in urban areas of the country is totally inadequate. We will continue to address this need. The implementation of our plans will lead to a substantial increase in economic activity and growth of the overall economy.

5. To ensure that adequate attention and resources are secured in a timely and efficient manner for priority projects, we will work with donors to establish a National Programme Support Office. The NPSO will provide responsible Ministries with the necessary expertise to follow up on priority projects.

Second: In the Sphere of Human and Institutional Capacity Building:

1. We need to invest further in the development of our human capital. Our people are our greatest asset, and must become able to engage in modern economic activity. We need to continue to invest heavily in education and health and improve the quality of these services. At present our institutional efficiency is hampered by human capacity constraints, which we must overcome by utilising Afghan expatriates and employing international expertise when necessary. However, our main focus should be on training our present and future labour force using a variety of experiential and university-based education methods. We also need to develop the managerial skills needed to plan, organise and execute economic activities.

2. We will intensify our work to reform and strengthen institutional capacity of the state. We must draw on international best practice to reshape our public institutions and to meet the needs of economic development. The creation of the Civil Service Reform Commission has been an important achievement, but more work is required to reform the administration, as well as the judiciary. Combating corruption, nepotism and red-tape will continue to be our priority. These are the factors that hinder foreign investment and growth of a vibrant private sector. We also need to strengthen our administration at the provincial, district and village levels so that the government works coherently to serve the needs of our people.

3. We will adopt pro -active policies to diversify the Afghan economy and strengthen the private sector as the engine of economic growth. We will continue to improve the regulatory framework, improving the already existing legislation for promoting investment security, and substantially simplifying the government procedures.

4. Generating domestic revenue is crucial. Over the past couple of years, we have achieved our domestic revenue generation targets, but we must do more. With increased trade and continued taxation reform we can ensure that, over time, we will generate sufficient revenue to meet the operating expenses of government.

5. And last but not least, we will remain focused on developing the capabilities of the Afghan National Army and our police force to ensure that our people live in safety and peace. We will complete the existing programmes such as Disarmament, Demobilisation and Reintegration and the expansion of government's effective presence in the provinces. In the coming six months, we will concentrate on providing a safe, secure and conducive environment for parliamentary elections to be held in September.

These priorities do not exhaust the list of what needs to be done in Afghanistan, but they do represent the best reasons why Afghanistan needs to continue on the path we have chosen. Our priorities must also be seen in the context of Afghanistan's place in the region, and the essential contribution that Afghanistan's economic development will make to this region. Afghanistan's unique position as the crossroads of southern and central Asia can be exploited to trigger better economic relations across the region. We facilitate trade among our northern, eastern and western neighbours, acting both as a transit country as well as a participant in areas where we can develop a competitive advantage.

Let me also emphasise that our strategy for economic growth and political stability will continue to be informed and complemented by the fight against narcotics. The recent report about the reduction in poppy cultivation following our pronouncements shows that Afghans have decided to eradicate the cultivation of poppy, but the Afghan people must be helped in practical ways. My government and I are committed to a total eradication of illicit poppy cultivation and drug production in Afghanistan. However, we all must recognise that the poppy-based economy represents nearly half of the real economy in this country. To prevent a new humanitarian crisis, it is imperative that measures to eradicate poppy production are accompanied by measures to offer alternative livelihoods and economic opportunities to farmers and rural communities.

Ladies and gentlemen,

Today's forum is an excellent opportunity for us in the Government, together with our partners in the international community who have supported us wholeheartedly over the past three years, to review our priorities for taking forward the task of Afghanistan's reconstruction and development. I hope that this forum will also enable us to move towards addressing these priorities, by building on our existing accomplishments, learning our lessons from our successes and failures, and continuing to work together.

Today, I thank the international community once more for its support to Afghanistan, and request them to invest even further in accelerating Afghanistan's reconstruction and development. The Afghan people and the international community have collaborated successfully in the past three years to establish the basis of an open and democratic society. We must now work together to overcome chronic poverty, and build Afghanistan into a stable and thriving economy in the region. We must also definitely ensure that the economic benefits of an open and democratic society with a market-based economy reach all Afghans.

I also encourage our partners in the international community to work with us in making the development process more accountable to the Afghan people, and in making sure that the hard-earned money paid by tax-payers in their own countries is not wasted. Together, we need to develop a clear and robust process for monitoring and follow up of reconstruction programmes aimed at ensuring effectiveness and minimising wastage. It is our strategy to enable the private sector to lead Afghanistan's development. However, the Afghan Government, as the ultimate body accountable to the Afghan people, must also be better informed about, and play its due role in steering the development process. The Government must become the anchor for a more integrated, transparent and accountable development effort.

Afghanistan's success, ladies and gentlemen, is owed primarily to two factors: the Afghan people's determination, and the international community's support. Today, Afghanistan illustrates how best can international cooperation be utilised to fight a global challenge, such as terrorism, and help rebuild a nation once devastated by foreign interference and violence. If we recall where we were three years ago, our accomplishments to date are truly significant. Together we have steered Afghanistan rather successfully through a tortuous journey over the last three years. Today we celebrate together not the end of our journey, but a very good beginning.

Thank you.

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