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Afghanistan: Karzai Explains Kabul's Economic Goals During U.S. Visit

Hamid Karzai (file photo) Much of Afghan President Hamid Karzai's four-day visit to the United States this week was dominated by talk about security issues and Kabul's strategic partnership with America. But Karzai also used the occasion to discuss his government's economic goals -- including the dream of becoming a regional trade hub by building transit routes linking ports in Pakistan and Iran with the former Soviet republics of Central Asia.

Prague, 26 May 2005 (RFE/RL) -- Afghan President Hamid Karzai wrapped up his four-day visit to the United States yesterday with a visit to the central state of Nebraska. He stopped at a cattle farm to see how agriculture in his own country might be strengthened as farmers are weaned off opium production.

It was one of several events during Karzai's U.S. visit that focused on how Afghanistan might achieve its goals of economic reconstruction.

On 24 May, at Johns Hopkins University in Washington, Karzai said the development of a reliable trade network is central to his vision of a prosperous Afghanistan.

"Afghanistan is now thinking of evolving a regional cooperation between the countries in that part of the world -- in terms of linking infrastructure, in terms of linking trade, in terms of also developing mechanisms that would foster this cooperative environment. We are in the early stages. [Afghan Foreign Minister] Dr. Abdullah is working on it with the foreign ministers of the neighboring countries. I believe a formalized structure of cooperation would take us a long way forward toward a secure psychological environment for all of us. That's what we need," Karzai said.

He said building roads is particularly important so that Afghanistan can become a link between Central Asia and key ports in Pakistan and Iran.

"The money that we get, we plan to spend on major reconstruction projects. Afghanistan wants to be the hub of trade and transit in that part of the world. Afghanistan's highways and roads will [shorten] journeys by weeks for that part of the world. The journey from Tashkent [Uzbekistan] to [Pakistan's] port of Karachi will be less than 32 hours -- for cargo, for transportation of goods. The same will be to [the Iranian port city of] Bandar-Abbas. And that is the future we are seeking," Karzai said.

Karzai noted that Afghanistan currently produces enough electricity for about 6 percent of its population. He said his country has the potential to produce much more by using hydroelectric dams, wind power, and untapped coal resources:

"It's the biggest need in that part of the world. Right now, we are buying electricity from Iran, from Turkmenistan, from Tajikistan, from Uzbekistan. We have tremendous hydro-capabilities, and coal and windmills and all of that. So [the funds also are] going to build the infrastructure for Afghanistan on which this machine will move towards a better future," Karzai said.

Karzai received new pledges of economic support from U.S. President George W. Bush. One is a promise to help Afghanistan become integrated into regional and international trade organizations. Another is to help develop the legal framework for a thriving private business sector. Bush also promised to encourage U.S. businesses to become more involved with Afghan firms. But details on new U.S. financial aid commitments made to Karzai are unclear.

Anatol Lieven, an Afghan expert at the Carnegie Endowment for International Peace, says the real issue is how much U.S. financial aid actually reaches the Afghans who need it most.

"Well, [Karzai] has been pledged more money. But whether that money will ever be provided -- or whether, if provided, it will actually be distributed to ordinary Afghans -- is a very different matter," Lieven said.

Bob McMullin, an American who manages the largest Internet provider in Afghanistan, told Karzai at Johns Hopkins University that corruption is the biggest impediment to the development of Afghanistan's private business sector -- and therefore, the Afghan economy.

Karzai says Afghan courts are just beginning to deal with corruption. He notes that the recent corruption convictions against two deputy officials from the Hajj Ministry mark the first time Afghan government officials have been sent to prison on such charges. He also notes that another corruption trial is under way against officials from the Afghan Ministry of Transportation.

But Karzai admits it will take a long time to make the kind of changes that have a broad and lasting impact on corruption.

"Corruption? It is a problem, indeed. It is a serious problem. It's one of the problems that we are trying to fix and that will take time to fix, unfortunately. The reasons we know. It's a country without institutional strength. It's a country with a lot of poverty. And yet it's a country with a lot of money flowing into it. That's the best recipe for corruption. An end to corruption will come when we are able to improve the salary structure in Afghanistan and bureaucracy's own structure -- and regulate it in a manner that politics will not intervene in it. I'm a very strong believer in stopping political interference in appointments of the civil service," Karzai said.

When asked about reports of unfulfilled aid pledges, Karzai said there is a widespread misunderstanding about the Tokyo donors conference of early 2002.

"What was promised to us in Tokyo, which was close to $5 billion, has been delivered to Afghanistan by all those who promised -- the Japanese, the Europeans, the Americans, and others. We are not complaining that the money has not come to Afghanistan. It has come to Afghanistan. It has been spent on Afghanistan. We are complaining about the way that money has been spent in Afghanistan. That money has not come to the Afghan government. A little bit of it, very little of it was spent [that way]. Perhaps in the range of $200 million of it came to [the Afghan government.] The rest of it is spent through NGOs. That is what we have a disagreement about," Karzai said.

Karzai told journalists in early 2002 that his government did not have the financial institutions needed to accept direct aid disbursements from foreign governments. But he now says this is no longer the case.

"The only thing we want is that that money should be spent with a higher accountability in Afghanistan, preferably through the government of Afghanistan. And then hold us accountable to what we do. If our performance as a government is not satisfactory, then tell us, 'Well, you have failed. You have no capacity. You have no ability to spend it, and there is no transparency.' Unless we do that, it will be very difficult for the Afghan government to gain capacity. Therefore, our request is that the international community spend the money through the Afghan system, or through a transparent, strong process through the private sector. And if they give us more money, we will be happier," Karzai said.

Another major economic challenge for Karzai is to eliminate the widespread cultivation of opium poppies -- the raw material for heroin. To do so, he says Afghan farmers need support so they can grow other crops, such as fruits and vegetables.

Speaking at his final stop in Nebraska yesterday, the Afghan president said he hopes his country can eliminate opium production in about five or six years.