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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
 

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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.

Internal politics 
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, the return of the former king has also caused tensions within the interim administration between royalists and anti-royalists. Despite all the talk about the return of the king, Afghan internal politics since the fall of the Taleban regime has been dominated by the Loya Jirgah elections, which were widely expected to be decisive in establishing the balance of power between the different factions in the future government. Despite all the assurances by the interim government that the warlords will not be allowed to interfere, the military factions in control of the various areas of the country determined the outcome to a fair extent. All attempts to pre-determine the outcome notwithstanding, a significant opposition emerged from its ranks to prevent a completely smooth transition from the interim government to the provisional one, especially among Pashtun delegates. As a result, Hamid Karzai, who was elected president, had to slightly increase the weight of the Pashtuns within the new government, succeeding in bringing over to his side (reluctantly) 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 the state administration. Nonetheless, opposition to his government continued to rise in the following months, especially among Pashtun monarchists. Among the main factions vying for power, the Panjsheris proved unable to match their power in the armed forces with anything similar in terms of influence among the delegates. Subsequently, Karzai attempted to reduce their power in the army and the state administration, causing a deterioration of his relationship with them. 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. The task of rebuilding political institutions is also being pursued slowly, as the drafting of a new constitution started in October, but the appointment of members of parliament out of the Loya Jirgah, originally expected in June, has not taken place yet.

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 is rather indifferent to the internal politics of Afghanistan, but wants to ensure the presence of a government compatible with its geopolitical aims. Its strongest links are 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 favours Russia's alignment with Afghanistan's Tajiks.
While Pakistan and Uzbekistan continue to keep a low profile, the role of the US in affecting events in Afghanistan is undoubtedly dominant. The debate has increasingly been 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 continues to be 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.

Economy
The prospects for a quick recovery of the Afghan economy do not look very good. 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) is going to humanitarian relief, while US$160 million are being 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 have been signs of a growing willingness of donors, including the US, to make more funds available. On the other hand, the interim government is unable to raise funds on its own, as the provincial governors withhold most if not all income deriving from taxes and customs. The government itself expects to be able to raise just US$83 million this year. The international organisations have decided that the Afghan government will be in charge of the reconstruction process, but now demand a properly scrutinised process of allocation of resources. They also appear to expect the interim government to act towards the eradication of the poppy fields in several regions of the country, but so far the Karzai administration has had only a very limited success in this regard. The UN estimates this year's 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 and higher than previous estimates. Even discounting the many allegations of fraud that have been surrounding the operation, it is 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 are reportedly involved at least indirectly in the trade, which makes the eradication of the crop all the more difficult.
The focus of the reconstruction effort is expected to be initially in investment on transport infrastructure, which is in extremely bad shape. 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 neighbouring 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, but 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, is likely to struggle to find suitable funding, despite the support of the Turkmen, Pakistani and Afghan governments, of the Asian Development Bank and of the US government. The project also features the export of Afghan gas through the main pipeline and smaller pipelines from the Afghan gas fields of the North to Kabul and some other areas, where it could be used to provide energy for industrial and mining activities. However, Afghan gas, or at least that from previously exploited fields, is of low quality and could have difficulties in finding a buyer in a market that is soon going to be awash with gas from Dubai and Iran. 
In the meanwhile, the government has been struggling to bring the money supply under control yet and as a consequence the local currency (Afghani) has fluctuated wildly. This has negatively affected whatever economic life is left in the country, with traders and state employees being hit especially badly. After the April currency crisis, the Afghan central bank succeeded in stabilising the Afghani at around 36,000 to a dollar, a far cry from the high of 11,000 recorded in December 2001, but still significantly better than the low of 45,000 of April, although the currency continued a slow decline in the following months. The end of the Loya Jirgah selection campaign contributed to this achievement, as warlords and politicians stopped paying off large sums of money to buy support. The focus is now on the replacement of the old Afghani with a new currency, which started on 7 October and is expected to greatly contribute to the stabilisation of the economy. The government is also negotiating a free-trade agreement with Pakistan and working for the re-establishment of a banking system. Despite the slow start, in Kabul and other main cities, there are already clear signs of a new economic vitality, as small trades have been re-opening or are being created, although most of the rural areas have seen little improvement yet.

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Summary of developments in 2002

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 a 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. 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. 

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.

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. 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. 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. 

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Forecast for 2003

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. 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. 
During 2003 Afghanistan will continue to be kept afloat mainly by international help. 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. 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). 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. 

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Update No: 013 - (01/01/03)

Debate about secularism picks up
December in Afghanistan was characterised by the same tug-of-war that had already affected developments during the first 11 months of 2002. President Karzai continued to follow a pattern of institutional reconstruction, officially launching the new Afghan army and establishing a new commission with the task of reforming the legal system. However, even in this field, more congenial to Karzai than dealing with warlords, Karzai is facing serious problems. While after much debate the strength of the army has been agreed upon and is now fixed at 70,000, appointments remain a matter of heated debate. The discussion about the legal system is starting just now, but tensions are already 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. The final outcome is likely to be some sort of compromise, but arguments can be expected to flourish. Already in December the police commander of Hilmand province announced the re-establishment of the corporal punishments of the Sharia, in order to tackle the rising level of crime. A similar split is emerging within the commission working on the new constitution of Afghanistan, with the debate focusing on issues such as equality between man and woman and the separation of religion and the state. 

Warlords opt for soft resistance
At the same time, Karzai is clearly trying to exploit the presence of international troops in Afghanistan to expand his authority outside Kabul, probably aware that such help might not last forever. The adoption by Karzai of a more confrontational attitude with the warlords ruling most of the country has however wielded little result so far. While none of them has openly challenged Karzai's authority, several of the warlord-appointed officials that he had dismissed in November refused to go, with others being replaced by their deputies or in any case other individuals loyal to the same warlord. During December, in any case, Karzai continued his offensive, aimed at reducing the power of warlords and establishing the principle that the central government has authority over the whole country. The first deployment of the newly trained Afghan army, with 200 men sent to assist international troops in Patkya province, can be read as a signal sent to the warlords. Karzai's main aim appears to be breaking up the total control exercised by the warlords over whole regions, confining them to specific institutional roles. For example, rather than controlling every aspect of power in the regions where they are established, the warlords will have to choose between being a governor, a general, a minister, etc. Aiming at this, in December Karzai banned warlords from occupying both military and political positions at the same time. Again, however, it remains to be seen how successful this is going to be in the long run. Only one of the warlords, Ismail Khan of Herat, did not voice his acceptance of Karzai's decree, but others might still well be able to exercise indirect influence over parties and political groups, even if not formally in charge.

More promises from the rest of the world
International activity around Afghanistan in December focused on getting pledges for the funding of reconstruction in 2003 and on a new role for the ISAF, which is now going to be increasingly deployed beyond Kabul. The argument between Iran and the US, in which Afghanistan appeared at some point to be risking to be dragged in, has now been defused, even if Afghanistan continues to benefit from some fall-out. In December, for example, the Iranian government closed down the offices of Hizbollah, a small Shia group opposed to the Karzai government. 
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.

Slow reconstruction, hostile bureaucracy hamper recovery
Despite a renewed focus on it, reconstruction continues to lag. The long-awaited rebuilding of the highway network has now started, but it is not expected to be completed before two years. In the meanwhile, there will be clear limits to economic recovery, due to the high cost and danger of transport. After some initial enthusiasm, the various communities of Afghan in exile, who are 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. 
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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CARPET INDUSTRY

Afghan carpet makers find industry at crossroads

Afghan carpet makers say they have had the rug pulled from under their feet with the demise of the Taliban and the return of over one million refugees from Pakistan this year alone, David Fox reported for Reuters News Agency. 
Ironically, the rebuilding of Afghanistan has deprived them of their workforce, as parents raise their aspirations for the boys who used to do much of the weaving. 
"The industry is going through a very difficult time at the moment," said Ghulam Yahia, who runs a factory with 15 looms in the western suburbs of Kabul. 
"The next year is going to be a make or break one for the industry. I think it will get through, but there will definitely be some companies that do not make it." 
Afghanistan has been famous for centuries for the beauty and durability of its hand-woven rugs and carpets. Alexander the Great was said to have hired a counsellor to advise him specifically on what sort of carpets he should take back with him on his world-conquering travels. 
But, ironically, very few Afghan carpets have been made in Afghanistan in the last two decades. Most, while made with Afghan wools, on Afghan looms by Afghan weavers, have been woven in the vast refugee camps that sprouted in Pakistan and Iran after the Soviet invasion of 1979. 
"It made sense," Yahia told Reuters. "Most of the weavers left Afghanistan to become refugees, so the carpet factory owners moved the looms to Pakistan. That is where the labour force was." 
But since the overthrow of the Taliban in December, over 1.3 million refugees have returned home, carpet weavers among them, and the loom owners have moved their equipment back to Afghanistan. 
Nevertheless, factory owners say they are still in the grip of Pakistan carpet dealers who they say take the lion's share of the mark-ups in price that an Afghan carpet experiences from workshop to showroom floor. 
"We have got to get control of the industry in Afghanistan rather than allow the Pakistanis to run our affairs in Lahore," said Mohammad Faizal, head of a Kabul carpet cooperative. "At the moment we are hostages ... we have no say in the market. Buyers simply will not come here, so we have to go to them." 
At Yahia's factory, around 75 boys, teenagers and young men are engaged daily in making carpets. The looms are made of steel, the only bow to modernity in the process, but everything else is done the same way as it was centuries ago. 
Far from the stereotypical image of a Dickensian sweatshop, Yahia's is a cheerful place with the boys teasing each other and constantly playing pranks. Some of the boys are as young as nine, but they all go to school and work after hours in the factory. 
"Most parents have greater aspirations for their children these days," said Yahia. "In the city, most parents would prefer for their children to go to school than work in the factory. We really are running out of labour." He said if the trend continued, most carpet makers would move their looms to the rural areas and try to find women and girls to do the work. 

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ENERGY

Afghanistan plans gas pipeline

Afghanistan hopes to strike a deal shortly to build a US$2bn pipeline through the country to take gas from energy-rich Turkmenistan to Pakistan and India. 
Afghan interim ruler, Hamid Karzai, is to hold talks with his Pakistani and Turkmenistan counterparts on Afghanistan's biggest foreign investment project, Mohammad Alim Razim, minister for Mines and Industries told Reuters. 
"The work on the project will start after an agreement is expected to be struck at the coming summit," Mr Razim said. 
The construction of the 850-kilometre pipeline had been previously discussed between Afghanistan's former Taliban regime, US oil company, Unocal, and Bridas of Argentina. The project was abandoned after the US launched missile attacks on Afghanistan in 1999. 
Mr Razim said US energy company, Unocal, was the "lead company" among those that would build the pipeline, which would bring 30bn cubic meters of Turkmen gas to market annually. 
Unocal - which led a consortium of companies from Saudi Arabia, Pakistan, Turkmenistan, Japan and South Korea - has maintained the project is both economically and technically feasible once Afghan stability was secured. 
"Unocal is not involved in any projects (including pipelines) in Afghanistan, nor do we have any plans to become involved, nor are we discussing any such projects," a spokesman told BBC News Online. The US company formally withdrew from the consortium in 1998. 
"The Afghan side assures all sides about the security of the pipeline and will take all responsibilities for it," Mr Razim said. 
Afghanistan plans to build a road linking Turkmenistan with Pakistan parallel to the pipeline, to supply nearby villages with gas, and also to pump Afghan gas for export, Mr Razim said. 
The government would also earn transit fees from the export of gas and oil and hoped to take over ownership of the pipeline after 30 years, he said. 
The Asian Development Bank (ADB) has been surveying routes for transferring local gas from northern Afghan areas to Kabul, and to iron ore mines at the Haji Gak pass further west. "ADB will announce its conclusion soon," Mr Razim said. 
The pipeline is expected to be built with funds from donor countries for the reconstruction of Afghanistan as well as ADB loans, he said. 

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FOREIGN ECONOMIC RELATIONS

Iran to hold first exclusive trade fair in Kabul 

The Islamic Republic of Iran will hold its first exclusive trade fair in Afghanistan called 'Kabul 2003', officials in charge of export department for foodstuff, Mohammad Bisotoni, said on 9th November. 
In an exclusive interview with IRNA News Agency, he said the agreement to this effect was signed between the Iranian private sector and the Afghan commerce ministry following a year of market survey and negotiations. 
The first exclusive trade fair 'Kabul 2003' is slated for January 30th for a ten-day period in which foodstuff and industrial products will be put on display, he said. 
The second exclusive trade fair dubbed as 'Norouz-e Kabul' is to be held on March 1st for a ten-day period in which foodstuff as well as industrial products will be put on public display, he said. 
The fairs will prepare grounds for about 1,000 Iranian companies to present their products and services in four phases at the fairs, he pointed out. 
UN representatives in Afghanistan, active non-governmental organizations (NGO's) as well as foreign embassies in Afghanistan have cooperated in organizing such events, he said. 

Pakistani products demand increasing in Afghan market 

As the process of reconstruction and rehabilitation in Afghanistan continues, demand for Pakistani products is increasing in the country, offering great opportunities for trade and investment for Pakistani businessmen and exporters, PakNews has reported.
This is the right time for Pakistani businessmen and exporters to benefit from the opportunity of reconstruction in Afghanistan as Pakistani products are well recognized for their quality and competitiveness there, the Commercial Councillor of Pakistan Embassy in Kabul, S.M Tahir, told APP News Agency during his recent visit to Pakistan. 
He said Pakistan has also established a Commercial Wing at its Embassy in Kabul to facilitate exports and promote trade between the two countries. Tahir said this step would help both countries to further cement bilateral relations especially in the field of trade and investment. 
He said there was a great demand for the construction materials in Afghanistan, adding, that Pakistani companies can take advantage of the opportunity by exporting construction materials to the country. 
The Commercial Councillor said that Afghanistan has now started imports of PVC and GSP pipes, cement, panes of glass used in houses and buildings, bathroom tiles, aluminium and steel utensils from Pakistan, adding, in the past these products were being imported from China and other countries. 
S.M Tahir disclosed that an agreement between Pakistani Courier Services (OCS) and Bakhtar courier service Afghanistan had been reached under which they can send samples of Pakistani products to Pakistan's Commercial Council Wing Kabul for exporting the commodities to Afghanistan. He expressed the hope that as a result of these measures the annual balance of trade between the two countries would reach to US$200m. During his visit, S.M Tahir had a meeting with the Minister for Commerce, Industries and Production, Abdul Razak Dawood, and briefed the Minister about the potentials and opportunities of trade and investment for Pakistani business community and exporters in Afghanistan. 

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TELECOMMUNICATIONS

Afghan telecom risk paying off - Internet cafes will open across Afghanistan next year 

The telecom sector has been a precarious place to make money over the past couple of years, CNN's Diana Muriel has reported. 
The failure of Global Crossing, trouble at WorldCom and the massive debt burdens of the European telecom operators have all contributed to a negative investment climate. But perhaps taking some of the biggest risks of all is Afghan Wireless Communications Company (AWCC). 
After more than two decades of conflict in the region, AWCC is building a mobile phone and Internet network throughout Afghanistan with a growth rate that would put many of its Western competitors to shame. 
The Afghan capital of Kabul is not known for a proliferation of mobile phones, but AWCC - the only company granted a mobile licence in Afghanistan - has been working to change that. 
It has invested US$60m to build a mobile network and it has committed another US$45m to expand service over the next 12 months. AWCC, the country's biggest private employer with almost 500 staff, provides services in four other major Afghan cities. 
"An investment of this nature will always be a compromise between pure commercial interest and, emotional may not be the right word, but emotional interest and the president of TSI telephone system international, the major shareholder, is an Afghan émigré and I know that both these factors play a large part," said Gavin Jeffrey, managing director of AWCC. 
Despite the difficulties of operating in a war-torn country, such as housing telecoms equipment in walled compounds with round-the-clock guards, AWCC is adding customers at a rate of between 1,500 and 2,000 a month. 
Still, Afghan customers are not exactly spoiled for choice. They can buy either one brand of Nokia handset for US$290 or one of a range of three by Motorola, which cost as much as US$350. 
Given the fact mobile phones have become a status symbol, Afghans are tending to choose the most expensive models. "It's good to have one. I've never had a phone," said one mobile handset owner said through a translator. 
"In order to keep in touch with my son who lives in England, I asked him to send me money to buy a phone. I am very grateful to the Afghan Wireless Company for providing this service." 
Internet access is the next challenge facing Afghanistan's fledgling telecom industry. AWCC operates just one Internet cafe in Kabul but has plans open outlets across the country next year. 
However, the company's monopoly in the mobile phone market will not last for long. The Afghan Government is preparing to award a second licence soon. 

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TRANSPORT

Tajik-Afghan bridge gives Kabul new trade route

The Central Asian state of Tajikistan has opened a bridge that provides a new route for vehicles carrying humanitarian aid and goods in and out of war-ravaged Afghanistan, Roman Kzhevnikov has reported for Reuters News Agency.
The bridge, opened by Tajik President Imomali Rakhmonov and Prince Aga Khan IV, leader of Shi'ite Ismaili Muslims, is the first vehicle bridge spanning the Pyandzh river between the countries.
Vehicles can now be driven from the Afghan capital Kabul through north-eastern Afghanistan to Khorog in Tajikistan, then on to Kyrgyzstan and Russia.
"The opening of this new bridge is a significant step forward," the prince, who represents more than 20 million Ismailis around the world, told Reuters in Dushanbe, before leaving for the bridge.
Goods can now be driven "through Kyrgyzstan and Khorog south to Afghanistan," he said. "That is, you will have a direct route from north to south which previously did not exist."
The bridge has been largely funded by the philanthropic prince, the 49th direct descendant of the Prophet Mohammed, who has given more than US$30m in aid to various projects in Tajikistan since 1994.
No cost estimate for the new bridge was available from the Aga Khan Foundation.
A bridge already crosses the Pyandzh river at Termez in Uzbekistan, which gives access to the Afghan city of Mazar-i-Sharif. The Soviet army fled Afghanistan via that route after its 10-year occupation in 1989.
Much of the traffic between Afghanistan and the outside world had up to now moved across the Khyber Pass to Pakistan.
Tajikistan, the poorest of the former Soviet republics, was plunged into civil war from 1992 to 1997, shortly after the Soviet Union collapsed. Its average wages are still about US$9 per month.

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