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Center Asia Regional Economic cooperation (CAREC)
Fourth Ministerial Conference (5-6 Nov, 2005)
Statements by: Dr. Anwar-Ul-Haq Ahady
Excellencies:
This is the first
time that Afghanistan is participating in the Ministerial Meeting of CAREC. It
is indeed a pleasure for me to represent my county in this conference today. I
would like to take this opportunity to thank the government of Kyrgyz Republic
and the Asian Development Bank for organization this conference.
The government of
Afghanistan considers its participation in CAREC very important because we fully
subside to the economic assumptions behind the formation of CAREC. In the past
four years the government of Afghanistan has fundamentally restructured the
country’s political, social, and economic institutions. Politically,
Afghanistan has made the transition from authoritarianism, has established all
the necessary institutions for a democracy, and has completed presidential and
parliamentary elections. Socially, we have enshrined the values of equality of
gender, cultural pluralism, tolerance, civil liberties, and the rejection of
social discrimination in our new constitution. But perhaps more important for
our conference is the fact that now Afghanistan has a fundamentally different
economic system.
We believe in
market economy. We believe that private sector –led growth is more likely to be
sustainable than state-owned enterprises led growth. We believe that government
should build physical infrastructure (e.g. roads, railways, power), develop
human resources, and create legal and regulatory environment which would
facilitate private-sector-led growth. We believe that trading is beneficial to
all participants, and thus, trading should be promoted. And, we believe that in
order to ensure the efficiency of scarce capital, there should be very few, if
any, restrictions on direct foreign investment.
Excellencies: In
the past four years the government of Afghanistan has built its new economic
institutions on these beliefs. Thus, now Afghanistan has very liberal banking
and investment laws, and probably the lowest tariffs in the region.
The reason for my
elaboration on these developments is that I find a strong congruence between the
economic principles of my government and the economic assumptions behind CAREC.
Consequently, it is not a difficult decision for me to endorse CAREC. There are
ample theoretical arguments as well as empirical evidence to establish that
regional economic integration significantly enhances the welfare of a region.
Thus, we are confident that the implementation of CAREC plans will benefit all
of the participating countries.
Excellencies: Let
me specifically discuss my government’s position regarding regional economic
cooperation in the transport, trade, and power sectors. My government believes
that the construction of transport infrastructure is essential for notional,
regional, as well as inter-regional economic development. The absence of good
and well connected roads will seriously hinder the efficient allocation of
resources. As you may know, Afghanistan is sometimes classified as a Central
Asian, other times as a South Asian, and yet other times as a Middle Eastern
country. This kind of ambiguity of regional identity actually enables
Afghanistan to be the bridge connecting all three regions. We believe that the
construction of good high ways and railways that connect various countries in
this region and the three regions will enhance the efficiency of the transport
sector which in turn will greatly benefits us all.
In this regard, in
the past three years Afghanistan has spent $1.2 B on constructing all weather
highways; and we will be spending additional hundreds of million dollars in the
next three years to build additional highways. Our roads are connected to
Pakistan’s, Iran’s, Turkmenistan’s, Uzbekistan’s, and Tajikistan’s highways. We
are ready to do more regarding the development of this sector and to coordinate
and harmonize our activities and procedures with the other CAREC members. We
believe that in this sector there are great opportunities for gain for all of
us.
As I stated
earlier, we believe that trading benefits all trading nations. This is a well
accepted economic principle now. However, it will take a while to develop
economic complementarities between the national economies of this region.
To promote trade
within this region and with the outside world we believe that harmonization of
customs practices and transit facilities are necessary. Afghanistan has already
launched the modernization of its customs facilities and the adoption of
standard international practices with regards to its customs procedures. We
strongly support CAREC’s proposal regarding the harmonization of customs
procedures and other trade facilities measures. We also believe that lowering
custom duties on imported goods promotes trading. Happily, Afghanistan’s new
import duties are now among the lowest in the region. We are happy to support
CAREC’s call for a more liberal trade policy in this region.
And, finally, with
regards to the private sector, we believe that regional cooperation can provide
major gain. In this sector real economic complementarities can be identified
within the region as well as between Central Asian and South Asian. Currently
Afghanistan is short of electricity. At least for the medium term it is
economical for Afghanistan to import power. My government has decided to import
power from Uzbekistan and Tajikistan. Currently, a transmission line, which is
financed by the Asian Development Bank and the Government of India, is being
built from Hairatan, at the border with Uzbekistan, to Kabul. The government of
Afghanistan has already signed an MOU to purchase power from Uzbekistan. We are
also building transmission facilities to purchase large quantity of power from
Tajikistan.
For the long term
Afghanistan sees opportunities for the expansion of power trading which is
likely to include a number of countries in Central and South Asia. .
To conclude, we
find CAREC’s proposals in all of the three sectors of trade, transport, and
energy realistic; we believe that their implementation will enhance the notional
economic growth of all CAREC member countries. Thus, Afghanistan endorses, the
CAREC strategy and looks forward to being an active member in the preparation
and implementation of CAREC’s action plan.
Indeed the strength
of our belief in regional cooperation is such that we have organized a regional
cooperation conference in Kabul for December 4th and 5th,
2005. You will be receiving our invitation soon and we hope that you can join
us for another discussion of regional cooperation in Kabul. The objective of
the Kabul conference is not to establish another regional cooperation
organization. Indeed, we would like to see the much greater coordination
between exiting regional organization and greater focus on concrete measures to
be adapted by all. We believe that there is a strong willingness to promote
regional cooperation; and we are confident that together we will promote the
welfare of the people of this region.
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