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Update No: 071 - (22/10/07)

Spots of economic development
Some sign of economic development are surfacing in several parts of the country. The soft drinks sector seems to be particularly dynamic, with several companies now producing mineral water and fizzy drinks. Demand for both is high in a country which is both hot and often deprived of clean drinking water. High transport costs favour local production over imports, while mineral water is available in large quantities in this mountainous country. Bottling plants have sprung up in Kabul, Herat, Mazar-i Sharif and Kandahar, that is, most of Afghanistan's cities. Some developments can be noted in a number of other sectors too. For example, a factory for mattresses appeared in Kabul, while a manufacturer of paper tissue operates in Mazar-i Sharif. It is not clear whether the government's current policy of limiting imports from Pakistan through administrative controls (rather than high custom rates), is dictated by undeclared protectionist desires or by the desire to retaliate against the Pakistani government for its attitude towards the insurgency. One of the results has however been a sharp rise in the price of foodstuffs, sometimes by 30% from the beginning of the year. While this increase will, if it lasts, stimulate internal agricultural production, it is at the same time making life even more difficult for the poorer strata of the population. The price of oil is also 10-15% up from the beginning of the year, after a peak at the end of the summer when it had almost doubled, and the government was forced to step in and impose price controls. 
If some industrial sectors are beginning to take off, traditional craftsmanship is in steady decline. The latest news is that the silk weaver craft of Western Afghanistan is under threat because of cheap imports from China, Pakistan and Iran.

Tourism is back!
Although it might be difficult to believe, tourism is picking up in Afghanistan. This year too, arrivals are up on last year's, even if overall numbers are still puny at under 20,000 per year. Some travel companies market Afghanistan as an adventure travel destination, with some success. Even Afghans increasingly travel abroad and the Kabul-Dubai route is increasingly busy. A third airline (Pamir Airways) following Ariana and Kam Air, has started operating on this route, while a fourth one is starting operations soon (Safi Airways) and at least two more planned for the next several months. 

Chaos and corruption mar reconstruction effort
The growing confusion within the international community's effort in Afghanistan was highlighted in October by the departure from Afghanistan after only 3 months of Friedrich Eichele, the German police officer who had been despatched to command the European Union police mission to Afghanistan. Eichele, who has a weak command of English, alienated support among fellow Europeans, because of his habit of imposing his views despite having just arrived to the country. The EU police mission had been touted as a great hope for the reform of the troubled Ministry of Interior. 
The various efforts to reform the Ministry have so far failed to stem the spread of corruption, which in any case is increasingly affecting every ministry and contributing largely to the discredit of the government. 

Presidential hopefuls emerging
This is not preventing various political players from positioning themselves for the 2009 presidential elections. Apart for the incumbent Karzai, a likely candidate is Mustafa Zahir, grandson of the deceased king. He might run with the support of the opposition rooted among the ethnic minorities, hoping to carry at least a significant share of Pashtun vote which he would need to secure a majority. Some ministers of the existing cabinet are also said to be ventilating the possibility of a candidature, including Finance Minister Ahady and Education Minister Atmar. Opposition leader and former presidential candidate Qanuni also quite clearly appears to be preparing himself for a rerun.

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