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Albania

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  AFGHANISTAN

REPUBLICAN REFERENCE

Area (sq.km)
647,500

Population
26,813,057

Capital
Kabul

Currency
afghani (AFA)

President
Hamid Karzai

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Afghanistan

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Background:
Afghanistan was invaded and occupied by the Soviet Union in 1979, in the attempt to rescue and consolidate the pro-Soviet regime in place. It took 10 years before the USSR could withdraw its forces, having been delayed by the fierce resistance of anti-communist mujahidin forces, supplied and trained by the US, Saudi Arabia, Pakistan, and others. The pro-soviet regime survived for two years and a half, contrary to the expectations of many, and then fell in April 1992, having outlived its own mentor, the USSR. Fighting subsequently continued among the various mujahidin factions, but the fundamentalist Islamic Taliban movement had been able to seize most of the country. In addition to the continuing civil strife, the country suffers from enormous poverty, a crumbling infrastructure, and widespread land mines.

Update No: 04 - (26/03/02)

While the internal situation of Afghanistan cannot be said to be completely stagnant, the pace of improvement continues on the whole to be judged disappointing by many of those involved. In particular, the security situation still leaves a lot to be desired. The fighting in Sharin Kot highlighted that much remains to be done in terms of securing south-eastern and eastern Afghanistan from the remnants of the Taliban, especially since the US are not willing to use ground troops aggressively enough, due to fear of casualties. 
However much the fighting against the Taliban might have dominated the press headlines, Afghan internal politics in February and March was increasingly centred around the upcoming Loya Jirgah, the tribal assembly now planned for June, which is supposed to establish and legitimise a new government. The outcome of the Loya Jirgah elections will be decisive in establishing the balance of power between the different factions in the future government and this is why tensions have been increasing on the ground. In particular, the faction which is at present the strongest within the Karzai government, Jamiat-i Islami, would probably not be able to count on much more than the support of 15% of the members of the Jirgah, if the present situation is maintained. The party, which is dominated by Tajik islamists and opposes the re-establishment of a monarchy, is trying hard to expand its influence among Pashtun tribal chiefs and warlords of southern Afghanistan, especially those known for being anti-monarchist. At the same time, Jamiat-i Islami is trying to expand its presence in Northern Afghanistan, where the majority of the population is Uzbek, but where a large minority of Tajiks also lives. Jamiat's expansionism has led to clashes with the party which at present dominates Northern Afghanistan, Jumbesh-i Milli of General Dostum, and there is a danger that this could escalate into a major conflict before the Loya Jirgah elections. It appears obvious that the armed factions in control of the countryside will be in a strong position to influence the outcome of those elections.
Jamiat's activities have been arousing hostility even among the Pashtun monarchist factions, especially due to its monopolising of top positions in the Army and bureaucracy. The assassination of the Minister of Civilian Aviation in February highlighted the factional struggle. The Minister of Defence, General Fahim, is a member of Jamiat-i Islami and over 97% of the new generals he appointed to lead the new Afghan army which is being established, are Tajiks belonging to anti-monarchist Jamiat.
The international politics of the Afghan crisis are no less complicated. The row between Iran and the US over the alleged attempt of the former to destabilise the Karzai government continued during March, as some of the monarchist warlords who support Karzai claimed to have arrested an Iranian general inside Afghanistan, on a mission to buy the support of local chiefs. Iran opposes the establishment of a monarchist government in Afghanistan and supports all the factions that share this goal, not only the largest ones such as Jamiat, but also big and small warlords in western and southern Afghanistan. 
While Russia is rather more indifferent than Iran to the form of government in Afghanistan, its strongest links are with Jamiat-i Islami again, which it supported during the war against the Taliban. The former Soviet republic of Tajikistan is a Russian de-facto protectorate, a fact which also favours Russia's alignment with Afghanistan's Tajiks. Moreover, some of the top generals in the Jamiat-led new Afghan national army, including defence minister Fahim, are former generals of the old communist regime, and they still have good contacts in Moscow.
While Pakistan and Uzbekistan continue to keep a low profile, the role of the US in affecting events in Afghanistan is undoubtedly dominant, but continues to meet limits to its action. The Bush administration did exercise considerable pressure on ministers of the Karzai government on several occasions, especially Defence Minister Fahim, whose strongly pro-Russian tendencies are not appreciated. Perhaps more importantly, the US have been building their own "party" among Pashtun warlords in Southern and Eastern Afghanistan, whose help they want to enlist in the hunt for the remnants of Al-Qaida. Not even the US, however, have been entirely successful in steering Afghanistan in the desired direction. These warlords, for example, are now exploiting their privileged access to funds and resources to try to establish their own hegemony over entire regions, but are facing a growing local opposition. Moreover, even Karzai himself has openly refused to endorse American allegations against Iran.
In this context, the prospects for a quick recovery of the Afghan economy do not look very good. Even the USAID administrator, Andrew Natsios, acknowledged in early March that reconstruction will be more difficult than originally thought. International organisations have decided that the Afghan government will be in charge of the reconstruction process, not the UN or any other donor. However, the demand for a properly scrutinised process of allocation of resources is mounting, stimulated among other things by the signs that political factions are trying to occupy the state administration for their own purposes. In the meanwhile, in early March the first UN-sponsored reconstruction project started. This is still a comparatively small, US$3m project funded by Japan, and is aimed mainly to create jobs, but is at least a sign that money is beginning to find its way through. USAID also started its first two reconstruction projects, for a total value of US$13.5m.
From these early investments, the focus is expected to shift towards more ambitious projects, mostly dealing with the transport infrastructure. Iran is expected to be at the forefront of those in 2002, in part also due to the greater economic dynamism shown so far by western Afghanistan, and has already budgeted the necessary resources, especially for a railroad leading from Iran to the Afghan city of Herat. Longer-term projects are also beginning to be discussed. For example, in mid-February the President of Turkmenistan, Nyazov, and Afghan minister of energy and water resources met to discuss the plan of a pipeline crossing Afghanistan. The Karzai administration expressed its support for the project, which would also allow it to restart exporting Afghanistan's own gas production. However, defining the details of such a deal is certainly going to take a long time and it cannot be assumed that any discussions would end successfully.
The Karzai government, on the other hand, is still busy trying to rehabilitate the administrative infrastructure. Government revenue from domestic sources is still minimal, covering only 3-4% of the requirements. In part this is due to the fact that the provinces do not deliver to the centre the income deriving from local taxes and duties.
The difficult short-term economic prospects are favouring a new increase in the production of opium, despite the government ban. In March, Karzai called once again for the provincial governors to enforce the ban, but despite the fact that the governors of the Southern provinces, where most production takes place, are those more strongly aligned with the government, production is actually estimated to be on the rise. The increase in the opium trade is also likely to be contributing to the rising tension between the monarchist provincial governors of southern Afghanistan, who have a lot to earn from this trade, and Iran, which is energetically trying to prevent opium and its derivatives from entering its territory. The ban on opium poppy cultivation is especially difficult to enforce since the provincial governors concerned are also among those more closely aligned with the US, which at present does seem to have other priorities than fighting the production of drugs.

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AVIATION

Kabul eyes air transport cooperation with Tehran 

The interim government in Afghanistan has announced the establishment of a Tehran-Kabul air route as a priority, Afghan Minister of Air Trasportation and Tourism Zelmi Rasoul told IRNA on 27th February. 
The official expressed the hope the Afghan government will reach an agreement with Iranian officials in this regard. "Establishment of the air route is an exigency for Kabul and it is trying to do its best to launch the project in the near future," the Afghan minister observed. Rasoul went on to say that an Afghan delegation will be arriving in Iran to discuss the matter further, but gave no details of time and other matters. 
Zelmi Rasoul is the new Afghan transportation and tourism minister who took over from Abdul Rahman, who was killed during a riot in Kabul airport.

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BANKING

HBL to open branch in Kabul 


State-run Habib Bank has got the State Bank's permission for setting up a branch in Kabul, bank's president Zakir Mahmood told the Dawn Group of newspapers. "We have got the permission from SBP and now we have to seek the consent of the central bank of Afghanistan," he said. "We have requested the ministry of finance to help us get permission from Bank Milli (Afghanistan's central bank)." 
An SBP official said HBL was allowed in principle to open a branch in Kabul but the specifics are yet to be presented and approved. 
Pakistan has decided to open at least three bank branches in Afghanistan-one each in Herat, Jalalabad and Kabul - and Afghanistan is to reciprocate by opening three bank branches-one each in Karachi, Quetta and Peshawar. An understanding to this regard was reached between Finance Minister Shaukat Aziz and his Afghan counterpart Hidayat Amin Arsala at a recent meeting in Washington. 
Zakir Mahmood said if his bank got the permission for Kabul branch and the new branch worked satisfactorily, HBL would also like to open branches in Herat and Jalalabad. 
The state-run HBL has a network of 52 branches and two representative offices in 25 countries. 

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CONSTRUCTION

Afghan jobs project begins 

The United Nations Development programme has launched a new scheme in Afghanistan aimed at providing some 20,000 new jobs over the next six months, the BBC world Service has reported. 
The first work project has already begun, with a rebuilding of a primary school for boys and girls in a village Chehelsotune some 5km outside Kabul. 
It marks the start of a US$3m project funded by Japan, which will include road repairs, sanitation and water supplies, the building of schools and hospitals, and the removal of rubble. Workers will be paid an average of $2 a day. 

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ENERGY

Bold Turkmen project in the pipeline again 

Endemic volatility in Afghanistan has long stalled Turkmenistan's plans to build a potentially lucrative gas pipeline to Pakistan. In recent weeks, however, with the demise of the Taliban, talk of a new pipeline has begun to resurface, Asia Times Online has reported. 
Turkmenistan's authoritarian President Saparmurat Niyazov has long advocated construction of a new gas export pipeline through neighbouring Afghanistan. Even Niyazov's opponents concede that such a pipeline would serve Turkmenistan's best interests. 
The trans-Afghan gas pipeline from Turkmenistan to Pakistan, if realized, would surely come as a positive development, former Turkmen foreign minister and opposition leade,r Avdy Kuliyev said. It would contribute to regional stability as it would benefit all parties in Central Asia, said Kuliyev, who is currently based in Moscow. 
An increasing number of former Turkmen officials are now based in Russia and Western Europe, lobbying for democratic changes in their native land. However, their criticism of Niyazov's dictatorial ways has fallen on deaf ears so far. 
In the meantime, Niyazov is pursuing his pipeline dream. As peace is being installed in Afghanistan, it is now possible to build a pipeline to Pakistan, Turkmen state television quoted Niyazov as saying on February 8th. Niyazov met Afghanistan's interim minister of energy and water resources, Muhammad Shaker Kargar, to discuss energy cooperation. Kargar reportedly confirmed that the interim administration supports the pipeline plans - also in order to export Afghan gas. 
It has been understood that Niyazov plans to raise the pipeline issue with Afghanistan's interim leader Hamid Karzai in the near future. Niyazov has held telephone talks Karzai and invited him to visit Turkmenistan. Moreover, on February 8th Karzai announced that he and Pakistani President General Pervez Musharraf had agreed to revive a plan for a trans-Afghan gas pipeline from Turkmenistan. Karzai described the project as "very essential" and "beneficial for the entire region." 

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FOREIGN ECONOMIC RELATIONS 

Sweeping economic concessions offered to Afghanistan 

In sweeping economic concessions, Pakistan on 26th February completely deregulated its trade with Afghanistan and abolished permit and quota system with zero duties and tariffs barring six imported duty extensive items, the Pakistan Observer has reported. The two sides while fully acknowledging the importance of regional cooperation, also agreed to reactivate the dormant ECO for the optimum economic activity in the region. 
Pakistan and Afghanistan also unanimously agreed that peace between India and Pakistan alone could lay the foundation of a strong economic infrastructure in Afghanistan and the Central Asian States. 
This was stated by the Finance Minister, Shaukat Aziz, at a joint news conference with the Afghan Finance Minister, Hidayat Amin Arsala. 
He said exports to Afghanistan could be made either in rupees or dollars. However, there will be no rebate for export of six items namely cigarettes, dyes and chemicals, yarn of all types, PVC material, polyester and ball-bearings. 
The Finance Minister said the Government would facilitate the private sector in every possible way and it was for them to compete in price, quality, timeliness and reliability. Pakistan is considering the opening of another trade route at Miran Shah beside the existing points at Torkham and Chaman, he revealed. 
The Minister said volume of trade between Pakistan and Afghanistan was picking up daily as presently, around 80 to 120 trucks were leaving daily for Afghanistan with goods worth 25 to 30 million rupees. 
Pakistan will be releasing US$10m to the Afghan Interim Government as per instructions of President Pervez Musharraf to meet urgent needs of the neighbouring country. This amount is being paid from US$100m pledged by Pakistan in Tokyo for the next five years, Shaukat Aziz added. 
He said the visiting Vice Chairman and Finance Minister of Afghanistan met the President and held a brain-storming session with several federal ministers discussing various areas of cooperation such as training in banking and finance, resumption of commercial flights, opening of financial institutions, and visas. He said Pakistan was fully supportive of the reconstruction in Afghanistan as the two countries had a long multi-faceted relations covering religious, historical, cultural, social, geographic and economic ties. 
He said they also talked about regional cooperation in the context of ECO as Afghanistan was the nucleus in trade relationship between Central Asia and rest of the ECO countries as Afghanistan could serve as a transit route for oil and gas pipelines, electricity grids and roads and railways. 
The Afghan Finance Minister, Hidayat Amin Arsala hoped that a stable Afghanistan would serve as a transit route between Central Asia and South Asia. 
Replying to a question, he said the potential of the region could not be realised unless there was improvement in relations between Pakistan and India. He hoped that both the countries would sit down and resolve the issue of Kashmir to the satisfaction of the Kashmiri people. 
Arsala said relations between Pakistan and Afghanistan were important and people of his country had always been grateful for the assistance that Pakistan provided during Afghan Jehad. He said Pakistan has also been host to over three million Afghan refugees. He was confident that this positive relationship would not only continue but further strengthen the mutual benefit. 
The Afghan Finance Minister said because of proximity factor, Pakistan was better placed to compete for the reconstruction work in Afghanistan. 
To another question, he said on his return to Kabul he would discuss with other members of the Government matters relating to economic cooperation with Pakistan and resumption of flights by PIA and Ariana. 

Afghan Minister: Iran safe for transit of goods to Afghanistan 

Afghanistan's commerce minister believes Iran is a safe and economical transit route for goods needed from various origins in the West, Asia Pulse has reported. The minister of commerce of the Interim Afghan government evaluated the results of negotiations of the high ranking Afghan delegation with the Islamic Republic of Iran authorities as "advantageous" and said that owing to the special geographic situation, also due to long common borders with Afghanistan, Iran is a sure and safe location for transit of goods to Afghanistan. 
At the inauguration ceremonies of the special meeting for participation in reconstruction of Afghanistan, Mostafa Kazemi told IRNA in Tehran that the Islamic Republic of Iran has significant capabilities and capacities for participating in reconstruction of Afghanistan. 
He also assessed the results of his negotiations with his Iranian counterpart as "positive" and added that it was agreed on a codified commercial plan to be drawn up between the two countries to enable businessmen on both sides to engage in trade without any worries. He added that a delegation would be soon assigned to Iran for drawing up the above-mentioned plan. 

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FOREIGN LOANS & AID 

India offers Afghanistan US$10m

India has pledged immediate assistance worth $10m to Afghanistan following a meeting between the leaders of the two countries. It follows an earlier Indian grant of US$100m pledged during the Afghan donors' conference in Japan, BBC News has reported. 
Hamid Karzai, the head of Afghanistan's interim administration, met Indian Prime Minister Atal Behari Vajpayee during his first visit to the country since taking charge in Kabul. The last time Mr Karzai was in India was more than three decades ago when he was a student in the northern Indian city of Simla. This time he is seeking urgent assistance to help rebuild Afghanistan. Assistance 
The Indian prime minister told Mr Karzai he would do everything to help. "India stands shoulder-to-shoulder with Afghanistan and its friendly people in their hour of need," Mr Vajpayee said. 
Earlier, Mr Karzai received a ceremonial welcome at India's presidential palace where he was greeted by Mr Vajpayee. "India and all other neighbours can contribute towards stability and peace in Afghanistan so that the people of the country are able to get a responsible government," he told journalists there. Mr Karzai also pledged to continue fighting terrorism "until it is finished". 
"Afghanistan has suffered unbelievably due to the two twin forces of terrorism and extremism," he said. 
Mr Karzai's delegation includes Foreign Minister Abdullah Abdullah and other key ministers from planning, information, rehabilitation and reconstruction, commerce and other areas where Afghanistan has been seeking India's help. 
Mr Karzai was hosted by the Confederation of Indian Industry, where he urged India's leading industrialists to invest in his country. Two decades of war had done nothing to dim the Afghan entrepreneurial spirit, he said. 
Apart from a team of Indian doctors stationed in Kabul for the last three months, a delegation of Indian businessmen has also visited Afghanistan with an eye on investment opportunities. 
India has historical ties to Afghanistan and is home to some 30,000 Afghan refugees. But during the five-year Taleban regime, India backed its opponent, the Tajik-dominated Northern Alliance. 
Since the fall of the Taleban, Delhi has moved swiftly to re-establish its relationship by re-opening its embassy and offering financial and material help. 

EU releases first instalment of aid package for Afghanistan 

The European Union has released 57.5 million euros (US$50m) in aid to Afghanistan to meet emergency needs and assist in the setting up of the country's interim government, AFP has reported. 
The money would go to rural sectors in the country and to mining clearance operations as well as for rebuilding infrastructure, according to a statement from the European Commission. 
The fledgling administration in Kabul and Afghanistan's information sector would also benefit from the package. 
The aid is the first instalment in a total of 200 million euros programmed by the Commission for Afghan reconstruction this year following the fall of the ruling Taliban regime. 
At a donors conference for Afghan reconstruction in Tokyo, the EU pledged a total of 600 million euros this year, including 200 million from the Commission and 400 million from member states. 

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TRANSPORT

Germany to build road from Pakistan to Jalalabad

Germany will build a highway from the Pakistan border to the eastern Afghan city of Jalalabad to help improve the war-ravaged country's infrastructure, Berlin's ambassador to Islamabad, Christoph Brummer, said recently, The News International, Pakistan has reported. A feasibility report was being prepared on constructing the 70 kilometre road between the border post of Torkham and Jalalabad, Brummer told a function at the Lahore Chamber of Commerce and Industry. 
"We will float tenders and Pakistani companies can take part in this construction and come forward," he said, adding "neighbouring countries always have the edge over other countries' companies." However he said the recent deterioration in security could postpone the start of work on the road. 
"After the killing of the Afghan government minister at Kabul airport the situation does not seem satisfactory and we are checking whether work can be started or not," he said. "The situation in Afghanistan is not satisfactory and we are gauging the conditions." Afghan interim leader Hamid Karzai had been due to discuss German relief and reconstruction aid during a meeting in Berlin with Chancellor Gerhard Schroeder this week but the trip was cancelled due to bad weather.
The News International, Pakistan

New bridge linking Afghanistan with Tajikistan planned 

Preparations have been made for the construction of a new bridge over the Amu River linking southern Tajikistan with northern Afghanistan, The Frontier Post has reported quoting Tajik Radio. 
The former Soviet socialist republic is already linked with Afghanistan by four bridges, three built during the rule of the Taleban and the fourth after their fall, facilitating trade between Tajikistan and the areas controlled by the then opposition United National Islamic Front for the Liberation of Afghanistan. 
Quoting the Press Office of the Presidency, the report said the cabinet has ratified the agreement signed last year, for the construction of the bridge, between Tajikistan, Afghanistan and US NGO FOCUS for further facilitation of the ever-increasing aid the world community is sending to Afghanistan. 
FOCUS, run by the Ismailite leader Prince Karim Aqa Khan, is active in Ismailite-inhabited belt of Tajikistan, Afghanistan and Pakistan with the construction of the road between Faizabad, capital of northern Afghan province of Badakhshan, with Eshkashem district. Tajiks Ministry for Emergency Affairs, said President's Spokesman Nazar Saeedov, reviewed the project in early February and selected Aibag in Shartoot region situated in southern Tajikistan as the site for the bridge, due to its adjacency to the railroad network and a better access to the northern Afghan province of Qunduz. 
In the wake of the establishment of peace in Afghanistan and the reconstruction process kick-started in this war-ravaged country, humanitarian aids to Afghanistan would increase significantly and this fifth bridge over the Lower Panj River will prove greatly useful, observed First Deputy in Tajek Ministry of Emergency Affairs Abdur-Rahim Rajabov. 
The idea has been supported by Russian Ministry of Emergency Affairs and international relief agencies, it was claimed in the report which also quoted Tajik officials as mulling over the date to be fixed for laying the groundwork for building the bridge.

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