The Problems of Creating a New Afghan army -
and the critical dangers of failure!

The essential companion to follow the complex events in Afghanistan - as they unfold - includes reports on the main warlords and a map of the territory held by them, as well as other key descriptive material.

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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.

Internal politics
During the first half of 2002, the interim administration led by Hamid Karzai was mostly busy preparing the ground for re-establishing a government structure and getting reconstruction help from the international community. Perceived as an honest and well-intentioned man, but at the same time as a weak ruler, Karzai faced the resistance of the warlords who rule the various regions of the country, but also the difficulty of keeping his own coalition together. The interim government was an alliance between Pashtun monarchists of secularist tendencies and the various factions of the United Front, mostly composed of moderate Islamists from the ethnic minorities, who favour an Islamic republic. The coexistence between these radically different approaches would have been difficult in any case, but the situation was made worse by the fact that one of those factions, the so-called Panjsheris, quickly monopolised the real power by getting not just three of the most important ministries (defence, interior and foreign affairs), but also most top positions in the bureaucracy and in the army. The resentment caused by the attitude of the Panjsheris led to rising political tensions within the interim government, while the return of the former king Zaher Shah in April emboldened the monarchists to become more assertive. Other political factions, apart from the monarchists and the moderate Islamists, mostly opted to keep a low profile during 2002, siding with either faction depending on their own interests, but might become more active in the future.
The watermark in the consolidation of the regime in Afghanistan was expected to be the Loya Jirgah (June), which was to select a new transitional administration and a parliament. However, in many regards the Loya Jirgah turned out to be disappointing, although it did elect Karzai as President. The government was not subjected to approval by the Jirgah and no parliament was selected. A significant opposition emerged from the ranks of the Loya Jirgah, showing how the monarchists were increasingly divided between moderates favourable to Karzai and more assertive elements, who resented the relatively marginal role played by the Pashtuns in the new regime. As a result, Hamid Karzai, had to slightly increase the weight of the Pashtuns within the new government, succeeding in enlisting the cooperation of some groups previously opposed to him. 
Starting from August, there were also signs that he was trying to reduce the power of the Tajik Panjsheri faction within army and the state administration, causing a deterioration of his relationship with them. Nonetheless, opposition to his government continued to rise in the following months, especially among Pashtun monarchists, who felt that remnants of the Taliban and other fundamentalist groups might gain from the inability of the monarchists to defend the interests of the Pashtuns.
The "Jihadi" alliance of mostly moderate fundamentalists, led by former president B. Rabbani, emerged on the other hand as an important force and ended up supporting to some extent the pro-Karzai coalition, being then rewarded with some ministerial positions and a vice-presidency, but at the same time continuing to work for Karzai's replacement. Meanwhile, the central government tried to increase the pressure on the regional warlords, to force them to come to terms with it, but only achieved moderate success. In November Karzai took his boldest step yet, dismissing about 20 officials across the country on charges ranging from negligence to corruption, extortion and drug trafficking. The move was widely welcomed, especially in Kabul, although many were quick to point out how the 20 officials were just the tip of an iceberg of wrongdoing. Karzai also tried to weaken the total control exercised by the warlords over whole regions, confining them to specific institutional roles. However, the credibility of the central government's campaign against the abuses of governors and local officials suffered a severe blow in mid-November, when Kabul's policemen repressed with extreme violence a student demonstration in favour of better living conditions in their dormitories, leaving as many as seven dead. By the year's end the discussion about the legal system began to heat up, with tensions arising between those who want the Sharia (Islamic law) confirmed as a basis for the legal system and those who want a more secular approach. A similar split was emerging within the commission working on the new constitution of Afghanistan, with the debate focusing on issues such as equality between men and women and the separation of religion and the state.

International politics 
The row between the US and Iran, which is being accused of meddling in Afghanistan, with the aim of destabilising the interim administration of Hamid Karzai, faded away from the centre stage over the summer and autumn, after having attracted much attention during the first half of the year. Russia remained relatively indifferent to the internal politics of Afghanistan, but clearly wanted to ensure the presence of a government compatible with its geopolitical aims. Its strongest links were with Jamiat-i Islami, a party mostly composed of Tajiks, which it supported during the war against the Taliban. The former Soviet republic of Tajikistan is a Russian 'de-facto' protectorate, a fact that also favoured Russia's alignment with Afghanistan's Tajiks.
While Pakistan and Uzbekistan kept a low profile, the role of the US in affecting events in Afghanistan was undoubtedly dominant. The debate was mostly centred on the scope of military operations and the extent of US involvement in the consolidation of the new regime in Kabul. The relationship of the US armed forces with private militias remained controversial and one of their allied warlords even ended up fighting against government militias. During autumn 2002, the scale of American military operations was cut down, although this might well be more due to lack of suitable targets than to political considerations. 
By the end of 2002, the international politics of Afghanistan was characterised by renewed efforts to secure its freedom from the interference of neighbouring states, in the wake of the forthcoming war in Iraq. The fear was that the presence of Americans and ISAF forces in Afghanistan might weaken after the start of a war in the Middle East. On 22 December China, Iran, Pakistan, Uzbekistan and Turkmenistan pledged not to interfere again in the internal affairs of Afghanistan. However, such agreements took place amid reports that Iran continued to support Ismail Khan, the warlord who rules over most of Western Afghanistan, that Russia continued to provide arms for the Panjsheri faction of Jamiat-i Islami and the Pakistani intelligence service was helping the radical Pashtun groups in the East of the country.

The return of the old King Zahir Shah at the end of April was interpreted by many Afghans as a further sign that peace might really be at hand, a feeling that was already prompting hundreds of thousands of Afghans to come back to their native country from Pakistan or Iran. By mid-November, 1,870,000 had already done so. However, this development, while welcome in itself, added a further strain to an already difficult economic situation. By the autumn there were clear signs that scratching a living was a major challenge for most Kabulis, while in the countryside the population was often still at risk of starvation.
The economic situation was compounded by the slow start of the reconstruction. International donors pledged US$4.5bn in March and another US$600 million before that, of which a total of US$2.3 billion was for the current year. However, only US$1.7 billion has been confirmed in the form of actual commitments and by the end of August just about US$1.2 billion had been received. Of this amount, the largest part ($840 million) went to humanitarian relief, while US$160 million were spent on staff salaries and the armed forces, with just US$200 million going to actual reconstruction and development. Between the end of the summer and the beginning of autumn, however, there started to be signs of a growing willingness of donors, including the US, to make more funds available. On the other hand, the interim government was unable to raise funds on its own until the end of the summer, when some of the provincial warlords started paying in at least some of the income deriving from taxes and customs. The government itself expected to be able to raise just US$83 million in 2002. 
Apart from merely trying to start to reconstruct the country, the government had to keep international donors happy. For example, the international organisations decided that the Afghan government would be in charge of the reconstruction process, but demanded a properly scrutinised process of allocation of resources. They also expected the interim government to act towards the eradication of the poppy fields in several regions of the country, but during 2002 the Karzai administration has had only a very limited success in this regard. The UN estimated the 2002 harvest at 3,400 tons of opium this year, short of the peak of 4,600 tonnes reached in 1999, but still much more than 74 tons of 2001 under the Taleban, and higher than previous estimates. Even discounting the many allegations of fraud that have been surrounding the operation, it appeared obvious that a great deal more has to be done in order to reduce the impact of the Afghan opium on the European markets. Many of the warlords and military leaders of both Northern and Southern Afghanistan were reportedly involved at least indirectly in the trade, which made the eradication of the crop all the more difficult.
The focus of the reconstruction effort during 2002 was on investment on transport infrastructure, which is in extremely bad shape. Iran was at the forefront of such efforts in 2002, in part also due to its willingness to exercise some influence on its Eastern neighbour. During the autumn, a number of other projects, funded by a variety of donor countries and the Asian Development Bank, also kicked off, but the rebuilding of the highway network is not expected to be completed before two years. Longer-term projects were discussed at length during 2002, mostly the plan for a 850 km pipeline crossing Afghanistan, which could provide the Afghan government with as much as US$205m in transit fees every year. By the end of the year the plan was slowly progressing towards a detailed feasibility study, funded by the Asian Development Bank, but it still looked likely to struggle to find suitable funding, despite the support of the Turkmen, Pakistani, Afghan and US governments, and of the Asian Development Bank. Many international financiers would regard it as the highest of high risk investments.
During the whole of 2002, the government struggled to bring the money supply under control yet and as a consequence the local currency (Afghani) fluctuated wildly. This negatively affected whatever economic life was left in the country, with traders and state employees being hit especially badly. A first serious currency crisis took place in April, when the Afghani hit a new low of 45,000 to a dollar, the Afghan central bank for a while succeeded in stabilising the Afghani at around 36,000 to a dollar. However, the currency continued a slow decline during the following months, until a new crisis developed in November, when the Afghani slipped to a new low of 58,000 to a dollar in November. The introduction of a new currency starting from 7 October, which was key to the stabilisation plans of the government, proceeded too slowly to appease a population which, wary of being left with worthless notes, rushed to the money changers to convert their savings. However, when the transition to the new currency was completed in January, its value stabilised at 43 for a dollar. 
Despite the slow start, in Kabul and other main cities, by the autumn there were already clear signs of a new economic vitality, as small trades were re-opening or being created ex-novo, although most of the rural areas had seen little improvement yet. After some initial enthusiasm, the various communities of Afghans in exile, who were expected to play a key role in the economic recovery, are now showing signs of losing faith. Many who returned from exile in the West are already reported to have left the country again. More than the slow pace of reconstruction, these potential investors were scared off by the high level of corruption and red tape in the Afghan state administration. 

Forecast for 2003
If the consolidation of a central state in Afghanistan succeeds, in the longer term those countries will be rewarded which invested in befriending the Kabul government rather than regional factions. In this regard, a potentially very important development was in early January the signing of an agreement for the routing through Iran of Indian goods aimed for Afghanistan and Central Asia, with the concession of preferential treatment and tariff reductions. At about the same time, Afghanistan and Iran signed an agreement which allowed Afghanistan to trade with the rest of the world through the Iranian port of Chabahar, where it would enjoy a 90% customs discount. Taken together, the two agreements represented a massive blow for Pakistan's aspirations in Afghanistan and a resounding victory for both India and most of all Iran. Most commentators agreed that Pakistan courted disaster in recent months, by exercising pressure on the Afghan government through raising the costs of Afghan imports and exports though the Pakistan territory and increasing the restrictions on Afghan goods. The choosing of Iran as a leading trade partner for Afghanistan might even have contributed to President Bush's decision to grant Afghanistan preferential trading status in mid-January. 
Assuming that the international community will maintain a strong presence in Afghanistan in 2003, the transitional government appears likely to survive without major crises for another year, continuing slowly to push the reconstruction of Afghanistan forward. The institutional debate is likely to contribute to gradually shaping the political landscape of the country. While the Taleban and their allies will probably cling on to some bases of support in remote areas of Central and Eastern Afghanistan, carrying out a low-level guerrilla warfare against the government and international troops, they will find extremely difficult to mount any major military offensive. Given the very limited presence of international troops and government structures on the ground, this guerrilla strategy will not be able to inflict major casualties. However, the growing signs that the Pakistani intelligence is supporting the guerrilla mean that it has the potential to develop into something rather more serious. Among the political forces which support the transitional government, the increasingly heated debate about secularism and religion will begin to challenge the ethnic divide as a major factor in deciding political alliances. A large part of Afghan popular opinion appears opposed to the fundamentalists desire to maintain a strict code of behaviour in the country, but the conservatives are well entrenched in the judiciary and within the government and state administration. President Karzai will continue in his weak efforts to to improve the ethnic and political balance within the state administration, as shown in January by the appointment of a new and younger interior minister, Ahmad Ali Jalali. In February, then, Defence Minister Fahim appeared to give way to pressures and announced a spate of new appointments to his ministry, which were supposed to break the virtual monopoly of Tajiks belonging to the Panjsheri faction. It is unclear, however, whether these changes will be enough to appease the critics. Federalism will also be a matter of a heated debate. Key efforts like poppy eradication and the disarmament of the private militias will continue to see the government struggling.
During 2003 Afghanistan will continue to be kept afloat mainly by international help. Towards the end of 2002, the Oslo meeting of the donors to Afghanistan indicated that the level of international support will be maintained in 2003 at roughly the same levels of 2002, that is US$1.7bn. The government appears considerably less optimistic and stated that it would be happy to receive half that amount, perhaps trying to prevent the negative impact that a drop in the levels of help actually received might have among the population.
The growing presence of foreign personnel, both military and civilian, will stimulate the economy, but any recovery that will take place will be limited to the services. The bad state of the roads will contribute to feed inflation and the government's efforts to contain it will not be very effective, as shown in January, when it tried to introduce price controls and cut prices of consumer goods by an average of 20%. Even the agriculture will need to wait for much reconstruction work to be done before starting to climb out of its present depressed condition. 
In other terms, 2003 will still be a year of transition in Afghanistan. At the end of it, the country will still not be able to function on its own, even if all the current plans are accomplished. No viable independent army is expected to be deployed before 2004, that is about the same time when the highway network should be completed. Even the repatriation of Afghan refugees should be mostly complete only by 2004. The United Nations expect another 1.2 million refugees to return to Afghanistan in 2003. 
During 2003, however, the first elements of a banking system should be re-established in Afghanistan, contributing to create a somewhat more favourable business climate. The government will likely continue to be short of cash, much to the chagrin of officials, soldiers and policemen, who will continue to be underpaid (if at all). Attempts to reform what is left of the Afghan economic system will intensify. In January, a privatisation commission was launched, with the purpose of handing over to private businessmen what is left of Afghanistan's state industries. Only about 74 state-run business are still in existence and those active in the transport, construction and agricultural sectors will be targeted for privatisation, while the energy and water sectors are expected to remain under state control. Social tensions might mount as some elements of the middle class, involved in trade or working for the international community, will increasingly lift themselves above the mass of the population, who will by contrast continue to scratch for a living. Despite a much better harvest than in previous years, many areas of the countryside, on the other hand, far from recovering are still at risk of starvation. International aid agencies estimated in December that between 2 and 4 million Afghans will be at risk during the 2002-2003 winter. 

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Update No: 16 - (27/03/03)

Little impact of Iraq war, yet
The start of the war in Iraq on 19 March did not have much direct impact on Afghanistan, but its potential consequences were very clear to all local players from the beginning. Significantly, the US contingent in Afghanistan launched a large offensive in Eastern Afghanistan to coincide with the beginning of the Iraqi campaign. Although the offensive was officially meant to capture members of Al-Qaida (which it failed to do), it appears obvious that it was also meant to send the signal that the US are not about to forget Afghanistan. The war in Iraq also represents another test of the solidity of the coalition in power in Kabul. The Islamists of Jamiat-i Islami, the most powerful member of the coalition, are clearly unhappy about the war and one of their leaders, Defence Minister Fahim, stated just days before the beginning of the war in Iraq, that the government opposed the use of force without the consent of the UN. However, the moderate monarchists who represent the second largest faction within the government and are much more pro-US carried the day. Not long after Fahim's speech, Foreign Minister Abdullah, another leader of Jamiat, issued a statement saying that the use of force against Iraq is justified.
The most direct potential danger deriving from the war in Iraq, namely a withdrawal of German peacekeepers, failed to materialise after the Germans backtracked on their previous declarations. Despite the sense of uncertainty deriving from the threat of war, the Karzai administration continued to cast its web of trade and political relations around the region and beyond it. At the beginning of March it signed a preferential trade agreement with India, in line with the decision of turning India into a major political and economic partner. At the same time, efforts to improve the relations with Pakistan continued to lag. There appears to be contrasts within the Karzai administration with regard to how to deal with Pakistan, especially since its intelligence service is widely believed to be helping insurgent groups along the border shared by the two countries. The Pakistanis were apparently promised in mid-March that their countrymen still held prisoners in Afghanistan would soon be freed, but in the end only a small minority was released, the remaining ones held because "suspected to have links with Al-Qaida". On the other hand, Pakistan approved better transit facilities for Afghan goods through its territory. While this is far from fully meeting Afghan demands, it still represents an improvement.
The main concern of the Karzai administration remained however to gather enough resources to keep the government going and get the reconstruction really started. The mid-March Brussels conference of donor countries ended with the promise of another US$2 billion of help to Afghanistan, an outcome judged a "success" by Finance Minister Ghani. 

Government seeks scapegoats for economic stagnation
While Afghanistan continues to wait for more incoming aid, the economic situation remains volatile. Between the end of February and the beginning of March the Afghani suffered yet another crisis, this time due to the large flux of Afghan pilgrims towards Saudi Arabia for the Hajj, and its exchange rate against the dollar dropped. Soon, however, the central bank managed to stabilise it around the January exchange rate, that is 43 for a dollar. Progress towards reconstruction continued to be very slow. The main concrete achievement in March was that grants from a number of countries allowed Afghanistan to clear its arrears with the IMF, which will now make it possible to apply for new loans. The government continues to approve business licenses and by March the number has reached 2,600, a very high number by Afghan standards, but in practice few of these firms have started their activities, due to the state of services and the continuing lack of security. These licences are mainly released to foreign firms and Afghan expatriates who plan to start a business in Afghanistan, while internal operators largely work without licenses. 
The slowness of the reconstruction continues to feed a feud between the Afghan government and the many NGOs active within the country. The war of words escalated in March, when the Karzai administration asked the Indian government to route its assistance directly to the government and not through NGOs. At the end of March the government even approved a new regulatory framework for NGOs, which tightens the controls to which they are subjected. Needless to say, the NGOs complained.

"Democrats" get organised
The internal political situation was mainly characterised by the forthcoming publication of the draft of the new constitution. The heated debate between secularists and fundamentalists sparked the creation in March of an alliance of "democratic" groups. The National Democratic Front, as it is called, regroups 45 organisations ranging from parties to trade unions and associations, mostly small ones, given that the claimed total membership is 40,000. However, in the Afghan context, an organised force of thousands might have an impact on the political situation. In part because of this, the Afghan intelligence service immediately started to harass and arrest members of the NDF, trying to discourage people and organisations from joining. The influence of the NDF in the main cities appears to be real. The fundamentalists, on the other hand, prefer to act through the judiciary, which they dominate, especially since many judges who had been appointed by the Taliban remain in charge. In March, another decree confirmed the ban on foreign television broadcasts, while in Herat (Western Afghanistan) restrictions were imposed on the sale of movies and music "contrary to Islamic regulations".

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Perini Corporation Awarded Contract for Design/Build Facilities in Afghanistan 

Perini Corporation (AMEX:PCR) has been awarded a contract by the U.S. Army Corps of Engineers, Transatlantic Programs Centre, for design/build construction of facilities to support the First Brigade of the Afghan National Army, located near the capital city of Kabul. 
Perini will be the prime contractor for this US$25 million, fast-track project, providing overall program management, design management, construction, construction management, construction supervision, and quality control Business Wire has reported. The Perini team includes Tetra Tech, Azad Architects, and POWER Engineers. 
The project will consist of three phases to allow occupancy of some facilities beginning in May, with a final completion date of August, 2003. The facilities consist of barracks, dining facilities and infrastructure, including a power plant, a water treatment facility and a wastewater treatment plant. Construction was started on January 19th, 2003, less than two weeks after the project kick-off meeting in the US. 
Since the Corps of Engineers encourages contractors working on its Afghanistan projects to involve Afghan professionals and labourers, Perini is pleased to partner with the Corps to maximize Afghan participation in this work. They intend to apply their experience of working in developing countries to assist local Afghan construction companies to develop up-to-date construction skills and techniques. 

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Russian foreign minister discusses assistance to Afghanistan

Russian Foreign Minister Igor Ivanov visited in Kabul to discuss Russia's assistance to state and economic construction in Afghanistan.
On the eve of the visit to Afghanistan the Russian foreign minister and his Iranian counterpart, Kamal Kharrazi, came out for the development of a comprehensive strategy of rebuff to the threat of drugs spread from Afghan territory. Both the Russian and Iranian ministers expressed concern over efforts made by former members of the Taleban and Al-Qa'idah to restore their structures and contacts with foreign sponsors. Both ministers came out for continuing the support to the Afghan interim administration that makes efforts to establish peace and safeguard security in Afghanistan.
Aleksandr Yakovenko, spokesman for the Russian Foreign Ministry, told ITAR-TASS News Agency that Igor Ivanov, at a meeting with head of the Afghan interim
administration Hamed Karzai, intended to reaffirm Russia's readiness to promote the creation of the armed forces in Afghanistan and discuss problems related to the participation of Russian companies in the recovery of the Afghan economy.
Ivanov will reiterate general support to the revival of an integrated, independent and prosperous Afghanistan that aspires for peace and stability. Igor Ivanov also intends to unveil a memorial plaque heralding restoration of a complex of buildings of the Russian embassy in Kabul.
The threat of drugs trafficking that comes from the Afghan territory will dominate the talks between Igor Ivanov and his Afghan counterpart, Abdollah Abdollah. The two ministers are also planning to discuss the situation around Iraq and regional problems, Yakovenko said.
Igor Ivanov was also planning to meet Afghan Defence Minister Mohammad Qasem Fahim to discuss security problems in Afghanistan and Afghan Finance Minister Ashraf Ghani Ahmadzai to negotiate a problem of granting most-favoured status to Russian companies in Afghanistan.

US$22.62m in Afghan aid planned 

Japan will provide Afghanistan with $22.62 million in grants in aid for its reconstruction, Foreign Minister Yoriko Kawaguchi said 25th March, the Japan Times has reported.
Of the total, US$21.85m will be extended through the Office of the U.N. High Commissioner for Refugees to create jobs and promote education, while US$770,000 will be provided through the U.N. Development Program to help Afghanistan establish a constitution, ministry officials said.
The aid is part of US$500m in assistance pledged by Prime Minister Junichiro Koizumi at an international conference in January 2002 on rebuilding Afghanistan.

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Afghanistan's GSM network upgrades

The US-based Telephone Systems International (TSI) has agreed to purchase US$4.3 million worth of GSM switching equipment from Siemens Mobile, Siemens web-site reported. The equipment, including a Siemens switch, will support TSI's subsidiary, the Afghan Wireless Communication Company (AWCC), which operates the first commercial mobile phone system in Afghanistan. The switch will be installed in Kabul and will be integrated into the existing AWCC network, which currently supports up to 40,000 users. 
The purchase agreement marks a significant step forward for Afghan Wireless and the nation of Afghanistan. The Siemens switch and related equipment will support up to 100,000 simultaneous users, which is five times the original capacity of the AWCC network in Kabul. Siemens also will assist in the installation and configuration of the switch.
Since its public launch in April 2002, the AWCC network has expanded dramatically, attracting between 4,000 and 5,000 new subscribers a month. "This purchase represents our commitment to provide high quality communications services to the people of Afghanistan," said Tom Bosley, Chief Operating Officer of TSI. "Working with Siemens, we are creating a GSM system that will meet the needs of subscribers now and well into the future." 

Siemens re-establishes presence in Afghanistan 

German electronics and engineering group Siemens AG (SI) has re-established a presence in Afghanistan in hopes of profiting from the rebuilding of the war-torn country, Siemens web-site reported. 
Siemens said it has established a permanent office in Kabul, appointing Gholam Hassanzadah, a 53-year-old Afghani who has studied in Germany, as its head. 
The office, which will employ fewer than 10 people, marks Siemens' return to the country after an absence of over 20 years. Siemens' activity in Afghanistan dates back to 1925. 
The company has received its first contracts in the central Asian country, supplying a 110-kilovolt-power transformer for Kabul, the electrical system for Kabul's water purification facility and medical equipment for Afghani clinics. 
Siemens also made a donation to UNICEF of €20,000 to help rebuild the country's education system. 
In fiscal 2002, Siemens posted a net profit of €2.6bn on sales of €84bn. 
Siemens is four times larger than the Afghan economy, which had an estimated gross domestic product of US$21bn in 2000.

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