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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: 040 - (21/03/05)

A change of the guard in Kabul
The announcement that US Ambassador Khalilzad will be transferred to Iraq was not unexpected, but its impact on Afghan politics is still likely to be a major one. Khalilzad is known to have been the driving force behind many of the Presidential decisions and it is not clear whether the new Ambassador will play a similar role. While many disagreed with Khalilzad's approach, most agree that President Karzai needs somebody to push him to take decisions and move in a certain direction. Without Khalilzad, Karzai might fall prey to lobbies of all kinds and lose even the limited degree of decisiveness which he had managed to achieve during 2004. 
Among the Afghan population disenchantment with Karzai seem to be growing. He has so far been unable to fulfil the many promises made during the electoral campaign and the multitude of groups, factions and notables which make up Afghan politics seem now intentioned to make sure that they will each have their own representation in the future parliament, which they will use to extract concessions from Karzai. As a result, the formation of a wide pro-Karzai or pro-government front does not look likely before the elections. Karzai, on the other hand, is once again playing divide and rule with the opposition. Fearful that northern groups might create a united front against him, and pushed by Khalilzad, he offered a job in Kabul to northern warlord and Uzbek leader Rashid Dostum. Because the post is mainly ceremonial, it is not clear whether Dostum will accept or not. On the Taleban front, a deal seems to be coming closer and closer. Some commanders already gave up the fight, but at the top level it has not been decided yet Military activity remained at very low levels in March, including during the second half of the month when the weather improved dramatically and the winter came to an end. 

An unbalanced economic development
On the economic front, most of what can be described as genuine development continues to take place in Herat, in western Afghanistan. A new industrial bread factory was recently launched there, arousing opposition among traditional bakers, who fear losing their business. This highlights a wider problem of distribution of the benefits of growth. According to the World Bank, 15% of the population receives 80% of the benefits. The government, however, does not seem too concerned with stimulating endogenous economic growth. The focus of government activity still rests on negotiating trade deals with the neighbouring countries. Karzai, who visited India during February, is pushing for the establishment of a trading corridor between India and Afghanistan through Pakistan. An agreement with Iran was also signed recently, which is expected to pave the way for a further increase in trade between the two countries. Iran has been one of the few countries which has timely implemented its projects within the Afghan reconstruction process and trade transactions between Iran and Afghanistan are reaching US$260 million this year. India is also beginning to show a greater interest in the gas pipeline from Turkmenistan, but the doubts on the political feasibility of the project are far from having been removed. The recent trouble in Pakistani Baluchistan highlights the security risks with a gas pipeline crossing territories where state power is weak and tribes are armed. Moreover, Turkmenistan's ranking as a trustworthy trade partner is in marked decline since its government imposed price hikes on Ukraine and is trying to do the same with Russia, in violation of existing agreements, a fact that will further discourage prospective investors in the US$3 billion pipeline project. 

 

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