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AFGHANISTAN

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Area (sq.km)
647,500

Population
26,813,057

Capital
Kabul 

Currency
afghani (AFA)

President
Hamid Karzai
 

Update No: 035 - (26/10/04)

Presidential elections without surprises
The month of October was dominated by the last days of the electoral campaign and then by the wait for the results of the presidential elections. As the end of the month approached, counting had not been completed yet, but it appeared clear that Karzai was firmly in the lead and that he would win at the first round with around 55%. Only three other candidates appeared likely to reach double digit figures. Yunis Qanuni, the Tajik leader of a moderate fundamentalist party, who resigned as Education Minister to challenge Karzai, capitalised on the discontent among former jihadi commanders for the removal of one of their leaders, Ismail Khan, from the position of governor of Herat. With about 15% of the votes, he emerged as Karzai's main rival and faces now the choice of pushing for a ministerial position or establishing himself as the leader of the opposition. Rashid Dostum, the former militia commander, obtained more than 10% of the votes and succeeded in confirming himself as the "leader of the north", by getting many more votes than anybody else in that region. He attracted the Uzbek and most of the Turkmen vote, with some Tajiks opting for him as well. With almost 10% of the votes, Mohaqqeq achieved an overwhelming victory among the Hazaras, establishing himself as the new, legitimate leader of the community and sidelining Khalili, an ally of President Karzai. The country, therefore, appears as ethnically divided as ever. Only the Tajik community is rather evenly split between supporters of Yunis Qanuni and those who oppose him. The Pashtuns largely voted for Karzai, with just a few of them opting for some minor candidates. 

Implications and next steps
The fact that all the leading players can, at least to some extent, claim to have done well should favour stability in the short term. It will give an incentive for them to seek integration in the political process. The two main losers in the election were Ismail Khan, whose Herat province gave almost 60% of the votes to Karzai, and Prof. Rabbani, the leader of the conservative Jamiat-i Islami, whose support for Karzai in his supposed stronghold of Badakhshan failed to deliver more than 20% to Karzai. The focus of the attention now will shift towards the formation of a new government. Karzai declared in public that he will no longer distribute positions on the basis of striking a balance among factions and ethnic groups, but rather according to merit. It remains to be seen whether he will be able to do so, especially since the margin of his victory, while comfortable, was still far short of the 70% wished by his circle and indicated as the landslide which would represent a complete endorsement of his policies. After the formation of the new government, the focus will shift further towards the forthcoming parliamentary elections, expected for spring 2005. 

A love-hate relationship with Pakistan
The recent decision by the Sindh government to levy goods travelling to Afghanistan led once again to tension between Afghanistan and Pakistan. The Kabul government threatened in response to levy US$3,000 on every truck carrying Pakistani goods to Afghanistan. An Afghan delegation travelled to Islamabad and convinced the Pakistani Prime Minister to force the Sindh government to remove the. In reality, the Pakistani central government appears keen to improve relations with Afghanistan, not least because Karzai in recent months increasingly emancipated himself from the tutelage of anti-Pakistani factions, such as the one led by Yunis Qanuni. The Pakistani government probably also hopes that some sort of deal by the Afghan government with the mainstream Taleban might be within reach and that finally pro-Pakistani elements would be incorporated into the Kabul government. 
In the meanwhile, trade with Iran continued to grow faster than with Pakistan. In the first 6 months of the current Afghan year (April-October) the increase was 63%. This can also be taken as a further confirmation that some sectors of the Afghan economy are indeed growing very quickly. At the end of September the National Bank also established for the first time a capital market in Afghanistan, with the launch of an auction of capital notes. The fact that the Afghani currency has been strengthening in recent months, falling to 44-45 to a dollar from a high of 53 earlier this year is also a sign that confidence in the short-term economic prospects is growing. In remote areas, though, the picture which emerges is quite different. The government itself acknowledges that about 6.3 million Afghans are being affected by the drought and depend on international help for survival. In many cases the need for water is so bad that even international help organisations believe they cannot cope and are advising the farmers to leave their village and resettle. 

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ENERGY

Russian electricity in Afghanistan via Tajikistan

Unified Energy Systems of Russian (EES Rossii) could enter Afghanistan's energy system via Tajikistan, the chief of the national electricity utility, Anatoly Chubais, said recently. During a news conference held recently he said stated: "This will be possible in case of the implementation of our projects in Tajikistan, to which three to ten years are given."
Chubais stressed that "Afghanistan is even now receiving electric energy from Tajikistan" that is in turn connected to Russia. "We are seriously analysing grid projects for Afghanistan," he said, Itar-Tass News Agency reported.
Chubais did not rule out that the EES Rossii could join China's energy system in prospect. "At present this topic sounds hypothetical, but it could become a reason for serious talks," Chubais said.
"China is now present in our discussions, even though Iran is in them more often," Chubais said.
He added that he could probably hold talks in Iran soon. As for other operations of EES Rossii abroad, Chubais said: "Large-scale projects could appear in the nearest time in Tajikistan and Kyrgyzstan." He admitted that talks on the Russian company's buying a 50 per cent stake in Kazakstan's Ekibastuz hydroelectric station were difficult, but were nearing completion. Besides, "we have got positive results in Georgia," he added.
"Despite the most acute political events, our business in this country is developing positively, and the Georgian leadership on the whole has been able to find a sound approach to solving these issues," Chubais said. He expressed hope that the coming winter in Georgia, whose energy system EES Rossii owns, would go without failures of the energy and heat supply. 

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