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AFGHANISTAN

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


  
   

REPUBLICAN REFERENCE

Area (sq.km)
647,500

Population
26,813,057

Capital
Kabul 

Currency
afghani (AFA)

President
Hamid Karzai
 

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.

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.

Economy
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. 


Summary and 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 during the previous 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. After touching their lowest level in mid-April, Afghanistan's relations with Pakistan showed some sign of improvement in late April and May, after president Bush's envoy to Afghanistan Khalilzad issued a veiled warning to Pakistan, saying that a threat to stability in Afghanistan is a threat to us interests. After the Karzai visit to Islamabad, the two countries agreed on upgrading the trade levels, improving banking links and facilitating travel between them. Trade with Pakistan is up on last year, but has not yet reached the peak level of the Taliban period, when Pakistan was by far the main source of imports.
At the beginning of May the departing commander of US forces in Afghanistan Mcneill hinted at the possibility of the beginning of the withdrawal of US troops starting from summer 2004. Assurances that this is not going to be the case routinely followed, but it is likely that president bush will want to start some sort of withdrawal, however slow, before next year's elections. As long as 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 showed signs of recovering some operational capability by spring 2003, they are unlikely to go beyond a low-level guerrilla warfare against the government and international troops. However, the growing signs that the Pakistani intelligence is supporting the guerrilla, together with rising discontent at the behaviour of the government troops, mean that the insurgency 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. Anti-fundamentalist groups tried to organise a National Democratic Front in March 2003, but were immediately targeted by the security services with threats and arrests. President Karzai will continue in his weak efforts 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. In June Karzai finally succeeded in getting the regional power holders to contribute some more money to the state coffers, while efforts to seize control of the custom posts were intensified. Modest signs of progress were being noticed by June at the Ministry of Interior too, the power of some of the more controversial characters was being reduced. 
Key efforts like poppy eradication and the disarmament of the private militias will continue to see the government struggling. In International politics, tensions are being caused within the government by the situation in the Middle East and especially the war in Iraq, with the Islamist elements within the government opposing US policies and the moderate monarchists being more inclined to approve them. There are also contrasts 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. Again, the moderate monarchists headed by Karzai favour a rapprochement with Pakistan, which is however opposed by the Islamists of Jamiat.
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 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. However, even if help was forthcoming, there is increasingly an issue of delivering it to the rural areas, where the lack of security is hampering reconstruction efforts.
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 the first half of 2003 the reform and reconstruction of the Afghan state proceeded slowly as in 2002. The bureaucracy is reported to be becoming somewhat more efficient, although admittedly starting from a very low level, while communication between regions has increased and improvements in the tax-collection system have also been reported. The Afghan state is still building up capacity in most sectors. 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. A draft of the new commercial law, prepared by US and European attorneys and expected to encourage foreign investment to flow in, is also ready. 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). The central Bank will continue to struggle to stabilise the currency. 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 businesses 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. In April, the National Solidarity Program was launched, a US$95 million program to provide village leaders with cash to spend locally in improvements and rebuilding activities. In some regards the government efforts to maintain the economy under control appear clumsy. The attempts to impose price and to increase its control over the NGOs that operate in the country are unlikely to deliver any good, given the inability of the country's bureaucracy to work with any degree of efficacy. Plans to cut the state bureaucracy staff by 20%, announced in April, might contribute to increase social tensions, which might also be stimulated 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. On the other hand, donors are also becoming louder in their demand that the Afghan state bureaucracy be brought under control. Harassment and corruption are not only discouraging foreign investors from becoming active in Afghanistan, but are also contributing to frustrate the reconstruction effort. Karzai issued on 10 June a decree aimed at reforming the state administration. A commission will be established, with powers to appoint and dismiss state bureaucrats. It remains to be seen whether this will be enough to tame the multitude of 262,000 underpaid state employees, who are often forced to seek bribes to feed their families.
The economic recovery is not proceeding any faster than institution-building and administrative reforms. Electricity supply is still precarious or missing in large parts of Kabul, mainly because the dams have not been repaired, which affects agriculture negatively too, due to lack of irrigation. Even in Kabul most roads have not been repaired yet. The land phone system is still waiting for repair, while the new mobile system is already running into trouble due to oversubscribing. On the positive side, many shops have been opening throughout the country, however, deeper signs of actual economic recovery are still scant. The carpet industry is enjoying a revival and an estimated 200 carpet workshops have opened over the last 18 months, employing 40,000 people, but otherwise industrial activities have lagged. Good news is coming from the agricultural sector, at least. Good rains after years of drought are expected to lead to a record harvest this year. Unfortunately, they will also lead to a record poppy harvest, especially since the harvest area has been expanding during 2003, reaching provinces previously never affected by the opium business.
This year's budget has been set at US$500 million, plus US$1.2 billion which are expected to be spent on reconstruction. Of last year's US$460 million budget, only US$380 million could be spent, due to lower-than-expected tax and custom revenues. Since the government had planned to receive US$83 million from that source in 2002/2003, it can be seen that very little of that money entered the coffers of the state. Hence the growing political pressure to improve revenue collection. Moreover, this year, like in 2002/2003, international funding is coming through slowly. 

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Update No: 20 - (24/07/03)

Tension with Pakistan erupts
After having been simmering for some time, tension between Afghanistan and Pakistan erupted during July. During his trip to Europe at the beginning of July, Pakistani President Musharraf criticised Karzai and his administration on a number of points, including the ethnic imbalance of the government. Karzai protested at the criticism, but some components of his coalition took it more seriously. The ransacking of the Pakistani embassy in Kabul by a crowd of angry Afghans on 8 July appeared in fact to have been instigated by anti-Pakistani elements in the Karzai administration. President Karzai himself promptly issued an apology, but the damage was done. Moreover, throughout most of July, Pakistan and Afghan troops were trading fire across the border in the East and went on doing so for several days. Although the dynamic of the incident is not clear, the Afghan commander in the area is very close to the anti-Pakistani faction in the Kabul government, led by Defence Minister Fahim. Musharraf's critical remarks were likely seen by some as an opportunity to try to delay the launch of the disarmament of the warlord militias, scheduled for the end of July, and to block the slowly moving dialogue between Karzai and some moderate elements of the Taleban opposition, sponsored by the Pakistanis. During June and July, the Karzai administration had come under growing pressure to start reforming some ministries and in particular the defence one, in order to make it possible to start the disarmament plan. Karzai obliged and announced a reform of that ministry, to address the ethnic imbalance among the senior officials. However, the dominant faction within the government, Jamiat-i Islami, to which Defence Minister Fahim belongs, is trying to hold on to as much power as possible within the ministry. The leaders of Jamiat also fear that an agreement with elements of the Taleban could hamper their attempt to expand their influence throughout the country. 

Elections in doubt, constitution on track?
The lack of progress in the security situation, together with delays in the registration of voters, led during July to growing speculation that the political election scheduled for the coming year might have to be postponed, although the US maintain that the election date will not be allowed to slip. While many NGOs and international observers had raised the issue before July, this is the first time that both the Karzai administration and UN envoy Brahimi hinted that this might be inevitable. On the other hand, the government appears to be happy about how the public consultation process on the new constitution is developing. However, the fact that the consultation process was started without even making available the draft of the constitution to the public has led to accusations that the whole process is a farce. The only official indications about the character of the constitution are that the judicial and religious powers are separated and that it provides for a constitutional court, which would take precedence over Islamic courts. These reassurances have been issued in part because the constitutional commission is dominated by Islamic fundamentalists. In July, four more clerics have been added to the constitutional review commission, further strengthening the fundamentalist dominance. The strength of Islamic fundamentalist within the existing state structure was confirmed by the arrest of two journalists in July, guilty of having published an article which sounded offensive to some of the leaders of the Islamic parties. Initially, even Karzai had appeared to support their imprisonment, but following an international outcry the two were released. The paper which published the article has been banned.
There is speculation that the Bush administration is about to relaunch its involvement in Afghanistan, supporting an expansion of the size and an extension of the mandate of the international military contingent there. However, nothing has been officially announced yet and internal discussion seem to be continuing in Washington.

The economy grows, but few noticed it
Finance minister Ashraf Ghani declared at the end of June that the government is targeting economic growth of 12-14% over the next five years, after the 10% that it estimates was achieved in 2002/2003. 2003/2004 is already expected to represent an improvement over the previous year, mainly because of the end of the drought. From the point of view of the average Afghan, the achievements of 2002/2003 appear much less exciting. The return of two million refugees in 2002 meant that in per capita terms the economy was virtually stagnant. If the projected growth for the current year was actually achieved, it might be more easily perceived as real by the population, because the influx of returning refugees is much slower this year. During the first half of 2003, the number of returning refugees had reached 224,000 and is not expected to exceed half a million by the end of the year. International investment has so far remained very limited, with just two hotel projects in development, although the government expects that soon some banks will start activities in Afghanistan. Extraction and mining activity is the most promising sector for foreign investment, with gas, some oil, and large deposits of copper and iron. However, until security is firmly established, foreign investment will be lagging and no major initiative is expected for the rest of 2003.
There is also some hope that the reconstruction process might accelerate during the second half of the year, although recent signs were not very positive. Members of the Karzai administration reported to the press that their solicitation of the pledged financial help from international donors meets increasingly evasive responses, no doubt in part because of the lack of success in reforming the ministries and in reducing the level of corruption. Lack of coordination among national and international agencies is also to blame, as pointed out by former US ambassador Tomsen in July. 

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FOREIGN LOANS & AID

US helps open Afghan girls' school


A girls' school opened in conservative eastern Afghanistan with help from a US$12,000 grant from the U. military, an official said recently, Associated Press has reported .
The Niswan Girls' School opened in Gardez in Paktia province for some 800 students, said US military spokesman, Lt. Col. Douglas Lefforge.
Many schools for girls in the south and east of the country have been targeted by Islamic fundamentalists opposed to female education. The radical Taliban regime had banned girls from school and work during its control of Afghanistan. Those restrictions were lifted when the Taliban government was toppled in late 2001 by the US-led anti-terror coalition.

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INDUSTRIAL DEVELOPMENT

Godrej launches cosmetic range in Afghanistan

Godrej Consumer Products Ltd (GPCL) has forayed into Afghanistan with hair colour and fairness cream range, as part of its effort to scout new markets worldwide for its soap and personal care portfolio, Economic Times India reported. 
"The company has launched its hair colour and fairness cream range in the virgin markets of Afghanistan, Somalia and South Africa," GPCL said in its annual report for 2002-03. It has also identified Latin America and African region as key growth markets for its products.
In order to bring down costs, GPCL has tied-up on third party manufacturing in Bangladesh which would offer significant cost efficiencies and logistical benefits, it said. 
Exports of the company in fiscal 2002-03 amounted to Rs 8.3 crore of which about 37 per cent was from the soap segment and 63 per cent from the personal care segment. 
GCPL, which claims 44 per cent market share in the hair colour segment, said the category accounted for 25 per cent of its total sales and 27 per cent of branded sales during 2002-03.
The company's offerings in the talcum powder and deodorant categories showed declining growth rates while the fairness cream Godrej FairGlow's sales were witnessing a longer gestation period, the report added. 
Through consumer-centric initiatives, Godrej was confident of minimising sector sensitivities and driving growth in toilet soaps category during 2003-04.
"Higher efficiencies driven by Economic Value Addition (EVA), increased sales and distribution thrust, a focused communications strategy and an international market and acquisition outlook would be the key drivers towards business growth and profitability," it said.
GPCL, which offers its manufacturing facilities to leading FMCG companies to outsource part of their production, said, the contract manufacturing business was on decline with marketers preferring to put up their own facilities in tax-efficient areas. 
Its income from contract manufacturing in 2002-03 stood Rs 17.5 crore by sales and Rs 5.9 crore by way of processing charges, the report added.

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INTERNATIONAL COOPERATION

Iranian, EU envoys confer on Afghan developments 

Iranian Ambassador to Kabul, Mohammad-Ebrahim Taherian and the EU Special Representative for Afghanistan, Francesco Vendrell in a meeting in Kabul, have discussed Afghan developments, IRNA News Agency has reported. 
According to Iran's Embassy in Afghanistan, during the meeting, Taherian stressed the need for Iran's active and constructive presence in the reconstruction of Afghanistan. 
He referred to Iran's practical presence in different projects in Afghanistan including the electricity supply in Herat, establishment of the Silk bridge and the Eslam Qala-Herat road, and said that Iran will continue its efforts in the reconstruction of the neighbouring country. 
Vendrell, in response, termed as 'positive and important' the role of Iran in the Afghanistan developments. 

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RECONSTRUCTION

Afghan FM wants pace of reconstruction sped up 

Afghanistan's Foreign Minister, Abdullah Abdullah, has called for the pace of reconstruction to be stepped up before next year's general election, ABC Radio Australia reported. 
Some 19 months after the toppling of the Taliban, Afghanistan faces a security crisis, which is hampering reconstruction efforts in the war-ravaged country. 
Speaking on his return from Europe and the US, Abdullah was positive about receiving resources and other support after meeting with US Secretary of State Colin Powell and other US and Italian officials. 
Kabul's efforts to fund reconstruction have been hampered by governors and warlords withholding revenue from the central government. 

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