FREE GEOPOLITICAL NEWSLETTER

Albania

For current reports go to EASY FINDER

  AFGHANISTAN

REPUBLICAN REFERENCE

Area (sq.km)
647,500

Population
26,813,057

Capital
Kabul

Currency
afghani (AFA)

President
Hamid Karzai

SPECIAL REPORTS

"Special Shi'a Report"

Afghanistan

Axis-of-Evil



NEW BUSINESS
OPPORTUNITIES

a free service

FREE World audit country reports on democracy, corruption, human rights and press freedom
democracy
check


CNN.COM
ELECTION WATCH


Currency converter
currency
converter


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: 01

Contrary to what many feared, the latest Afghan crisis has been far from being a disaster for the country and might well turn out to be a blessing. The looming humanitarian disaster, due to the drought in the northern half of Afghanistan, has now been largely averted, while a new government, led by Hamid Karzai, has been sworn in on 22 December. The new government will be able to count on international support, as its role in stabilising the country and rooting out the last remnants of the Taliban and Al-Qaida is crucial.

The only threat to the new government comes from within. Several factions of the United Front, which holds most power within the government, have expressed their dissatisfaction with the present distribution of ministerial posts, of which the main faction, Jamiat-i Islami, has taken the largest slice at the  expense of other factions, such as Jumbesh-i Milli, led by Rashid Dostum. After a revolt against Jamiat-i Islami in the town of Pul-i Khumri in mid-December, apparently supported by Dostum himself, Jumbesh-i Milli was appeased by Prime Minister Karzai with the nomination of Dostum as Deputy-Minister of Defence.

Many factions are now wrestling for power, in the expectation that soon international aid will start flowing in, providing key resources to be used in the consolidation of their often tenuous hold on many parts of the country. Controlling positions in the government and the state bureucracy becomes crucial in re-directing international aid towards the “right people” in the “right places.” Unsurprisingly, one of the first acts of Jamiat-i Islami after it seized Kabul, over which it still has almost exclusive control, has been to staff as many positions as possible in the state administration with its own people.

Assuming the new government succeeds in remaining cohesive and in maintaining a degree of control over the country, it is expected that the UN rehabilitation and reconstruction effort will involve the expenditure of US$6.5 billion over five years, mainly with the aim of rebuilding the basic infrastructure and services, train new cadres for the state administration,  and kick-start agricultural production again. While the state of agriculture is very crucial to the welfare of the Afghan population, international investment will be focused on transport, telecommunications and natural resources.

The transport network is in a very depleted state and requires large-scale investments to be repaired and updated. Little is left of both Afghanistan’s internal and external airlines, Ariana and Bakhtar, which will need new equipment. The probable source of much of this equipment is likely to be Russia, which has plenty of second-hand turbo-prop cargo planes and helicopters to offer. Airports, which will play an important role in the future, due to the undedeveloped road network and to the presence of large numbers of personnel from the UN and the various peace-keeping armies, will also need repairs and upgrades. At present, 35 out of 45 of them have unpaved runaways.

Important efforts will also be needed for repairing and possibly expanding the road network, the role of which is crucial to the consolidation of hold of the central government over the country. The existing 24,000 kilometers of road need comprehensive reconstruction work, while UN analysts estimate than an extra 6,000 kilometers will have to be built to complete the network, especially in the most remote regions, such as Hazarajat (Central Afghanistan) and Badakhshan (North-east Afghanistan). These regions are home to two important factions of the United Front and they are likely to push for new roads to be built.

The telecommunications system in Afghanistan also badly needs investment. At present only the main cities are linked by a telephone network, while an Afghan/British joint venture was busy developing national, international telecommunications, GSM mobile and internet facilities until in 1999 its activities were stopped by international sanctions against the Taliban regime. The UN appear inclined to leave the development of telecommunications to commercial organisations, in cooperation with the government. 

Prospects of economic development in Afghanistan are linked to the expansion of natural gas production, presently limited to just 2 billion cubic meters per year, almost entirely exported to Uzbekistan, despite reserves estimated at 1,100 billion. The gas fields are located mostly around Shiberghan, very close to the northern border, but presence of natural gas is also reported in Sar-i Pul, Central Afghanistan. The price paid for this gas is below international prices, due to the strong competition coming from other Central Asian fields. Increasing gas exports in the short term would be conditional on negotiating agreements with Central Asian states and Russia, in order to be allowed to use their networks. Prospects for oil and gas pipelines from either Afghanistan itself or from Turkmenistan and Uzbekistan running through Afghanistan towards Pakistan and the sea look still rather remote at present, despite the enthusiasm of some Western businessmen. The government will need to establish a disciplined central army and disarm the tribal and party militias, before anybody actually starts making the large-scale resources required available.

« Top

 

CUSTOMISED REPORTS

 

INVESTMENT BACKGROUND REPORTS

Our analysts and editorial staff have many years experience in analysing and reporting events in these nations. This knowledge is available in the form of geopolitical and/or economic country reports on any individual or grouping of countries. Such reports may be bespoke to the specification of clients or by access to one of our existing specialised reports. 

For further information email:

reports@newnations.com

Considering an investment or a trip to any newnation? First order our Investment Pack which will give you by e-mail the last three monthly newnation reports and the complete worldaudit democracy check for the low price of US$12. The print-out would be a good companion to take with you. Having read it, you might even decide not to go!

To order please click here:
Investment background report

« Top

« Back




Published by 
International Industrial Information Ltd.
PO Box 12 Monmouth 
United Kingdom NP25 3UW 
Fax: UK +44 (0)1600 890774
enquiries@newnations.com