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Economic Press Review Afghan women learning business New code of conduct to regulate NGOs Norway thanks Pakistan for its role in Afghanistan Nationwide Equipment CEO meets with Afghanistan's president Kandahar Sistan-Baluchestan sign MoU Afghans implement water treaties: Iran's Bitaraf Afghans are being left out of their own rebuilding Afghans face income tax for first time Kabul eyes more aid as London moot delayed Afghanistan be declared SPECA official member today U.S.-Afghan relationship on edge Herat Officials Discuss Commerce New Afghan income tax to come into effect from 23 September Karzai to lay foundation stone in Tajik ? Afghan border bridge Afghan government postpones London donor conference from June to December Opium remains major source of income in Afghanistan Karzai Explains Kabul's Economic Goals during U.S. Visit 19m Afghanis donated to Herat water supply Press Clippings
AFGHAN WOMEN LEARNING BUSINESS Source: The Arizona Republic, USA 1 June 2005 Thunderbird, the Garvin School of International Management, will repeat its pilot program aimed at teaching Afghan women economic-development skills. The Glendale school is identifying mentors and students for a second Project Artemis course planned for April or May next year, said Abe Jacob, project manager for the first Project Artemis course and an assistant to president. "The first was a huge success. It opened the eyes of these women to the rest of the world and the world of opportunity," he said. Thunderbird officials are looking at expanding the program to three weeks and also seeking ways to raise capital so that women chosen for the program can leave with some seed capital for their economic-development projects. Thunderbird crafted the first two-week program in January to teach negotiation skills, business plans and consensus building, all tools needed to help rebuild an economy. The program was developed after Barbara Barrett, a Thunderbird trustee from Paradise Valley, met Mina Shirzoy, director of Women Entrepreneurship under Afghanistan's Ministry of Commerce in Kabul. While visiting Afghanistan, Barrett, appointed by President Bush to the U.S. Afghan Women's Council, was moved by the desperation by many Afghan women to improve economic conditions and educational opportunities. Shirzoy helped identify women in Afghanistan for the program.
New code of conduct to regulate NGOs 31 May 2005 Source: IRIN KABUL, - Aid organizations in the Afghan capital, Kabul, launched a new code of conduct to regulate their activities on Monday, following a series of accusations that NGOs had misused funds allocated for post-war Afghanistan. The 21-article code, signed by 90 national and international NGOs, sets high standards to ensure greater transparency and accountability, as well as to improve the quality of services provided by NGOs, according to the Agency Coordinating Body for Afghan Relief (ACBAR). "The code of conduct is a public statement for those NGOs who have signed up to it, that they take it very seriously to adhere to some minimum standards in implementing operations and institutional standards," Anja De Beer, executive coordinator of ACBAR, told IRIN on Tuesday in Kabul. The Afghan government has several times accused aid agencies of hindering the growth of local firms and squandering billions of US dollars earmarked for reconstruction efforts in the country. But aid workers say the government is confusing them with highly paid private contractors and profitable organizations, many of which are registered as NGOs with the country's ministry of economy. "In the given situation of Afghanistan where many people register and pretend to be an NGO, we needed to clarify our standards of operations," De Beer emphasized. The purpose of the code is to improve the understanding of NGOs, she said, noting their purpose and accomplishments among the general public, government donors and the media. "We still continue to be unfairly treated by the press and the public statements of the government. We have to address this over time," she added. Despite massive international support for Afghanistan following the collapse of the hard-line Taliban regime in late 2001, people on the ground are dissatisfied at the level of reconstruction taking place in the country. In fact, many are of the opinion that little has been done for what they believe to be billions of dollars of international funds invested in the Central Asian nation. But ACBAR said all the donor money has not been spent through the NGOs and also the actual money given to Afghanistan was several times less than had originally been pledged by donors. According to ACBAR, a report from the Afghan Ministry of Finance indicated that out of US $13.4 billion pledged at the 2002 Tokyo conference, as well as the 2004 Berlin donor conference on Afghanistan, $9.1 billion had been committed by donors. Yet as of February 2005, only $3.9 billion had been physically disbursed to the country so far. "The report indicates that 45.5 percent of donor funding went directly to the UN [United Nations], nearly 30 percent to the government, 16 percent to private contractors and only nine percent was directly given to NGOs," she said. "We are trying to find out from the government and from the UN how much of the funding they received, they have given to NGOs to implement their projects," ACBAR coordinator said. Monday's new code of conduct binds the NGOs to an open policy of accountability and transparency and obliges aid bodies to make available financial and activity reports upon request by relevant and interested parties. The new code also assigns a commission to review complaints or petitions against NGOs. The Afghan government and the UN in Kabul have welcomed the new code of conduct calling it a supporting document for upcoming NGO legislation, which would pave the way for a better framework for all reconstruction players. "It sets very high standards that are relevant not only to NGOs but to the aid community at large," Jean Arnault, the UN Secretary General's Special Representative, said in a statement congratulating the NGOs on the new code's launch. Meanwhile, Nazeer Ahmad Shahidi, the Afghan deputy minister of economy, told IRIN that a new NGO law that had been debated and delayed over the past two years, would finally be approved and released in coming days. Shahidi said the code of conduct could assist the new law to better monitor NGO activities. There are more than 2,400 national and international registered NGOs operating in different parts of the country. The Ministry of Economy, the leading state body in reconstruction affairs, has said that with the introduction of the new NGO legislation that has been debated over the last two years, many of the organizations accused of widespread corruption or inefficiency, would be shut. "We do not have a capacity to monitor all the 2,500 NGOs, therefore aid agencies and this kind of code of conduct can help us in this regard," Shahidi said.
Norway thanks Pakistan for its role in Afghanistan ISLAMABAD, May 30 (APP) Deputy Foreign Minister of Norway Kim Traavik Monday commended the positive role of Pakistan in reconstruction of Afghanistan and establishment of peace and stability in South Asia. Talking to Foreign Minister Khurshid M. Kasuri he thanked Pakistan for its role in the promotion of stability and reconstruction in Afghanistan. Foreign Minister Kasuri briefed him on the latest developments in Afghanistan and about the progress in Pakistan-India dialogue aimed at resolving all outstanding issues including the issue of Jammu & Kashmir. The Norwegian Deputy Foreign Minister is on a two-day visit to Pakistan and discussed bilateral, regional and international issues of mutual interest. The two Ministers expressed satisfaction over the state of bilateral relations. In this regard, the Norwegian Deputy Foreign Minister expressed the hope that Telenor investment in Pakistan will further strengthen bilateral economic ties. Since Norway participates in one of the Provincial Reconstruction Teams in Afghanistan, the Foreign Minister briefed him about Pakistan's assistance in the holding of Presidential elections.
Nationwide Equipment CEO meets with Afghanistan's president (Business Journal) WASHINGTON, D.C 30 May. A Jacksonville company was among about 30 throughout the country asked to meet with Afghanistan President Hamid Karzai on May 24 to discuss the possibilities for doing business in the developing country. We've got a lot of interest and potential customers," said Ed Kostenski, president of Nationwide Equipment Co., which exports refurbished heavy construction equipment. The need for infrastructure and rebuilding is phenomenal." Kostenski was asked to meet with Karzai by the U.S. Department of Commerce, which hosted the Afghan leader for a forum. Karzai was in the country to give the commencement address at Boston University. Our coming together with President Karzai represents an opportunity to find quality opportunities for American businesses to do business in a free and democratic Afghanistan," said Dan Mc Cardell, director of business liaison for the Commerce Department. Other businesses at the meeting included Morgan Stanley, Phelps Dodge Corp., Overstock.com Inc. and Globecomm Systems Inc. Karzai told the gathering that Afghanistan is "wide open to do business," Kostenski said. It takes about a week to get a business license there, compared with several months when the country was controlled by the Taliban. The greatest need, Karzai told the group, is for housing. He said you can make a lot of money building houses or selling building equipment," Kostenski said. Nationwide has had great success in recent years exporting equipment to developing countries. Kostenski said there are risks involved in such endeavors but that they are manageable for companies willing to do their homework and position employees like Akthar Kazi, Nationwide director of Middle East operations, in those markets. There are a lot of opportunities available to small companies," Kostenski said. Kostenski's invitation to the meeting stemmed from a Commerce Department trade mission to Afghanistan in April, which the department invited Kazi to attend. The invitation was the latest in a string of honors Kostenski has received. Last year, he was recognized by Bush as an example of a small businessman competing globally, and he received the 2004 Governor's Business Diversification Award for excellence in exporting. In March, Kostenski was named to the Ex-Im Bank's Sub-Saharan Africa Advisory Committee, a 10-member panel that advises the Export-Import Bank of the United States on its policies to support U.S. exporting to Africa.
Kandahar Sistan-Baluchestan sign MoU Zahedan, Sistan-Baluchestan province May 30, IRNA The Iranian southeastern province of Sistan-Baluchestan and the Afghan city of Qandahar signed a Memorandum of Understanding (MoU) on bilateral trade cooperation here on Monday. The MoU was signed by heads of chambers of commerce of the two countries. Governor-General of Sistan-Baluchestan Hossein Amini who was also present at the meeting said that his province was ready to bolster cooperation with Afghanistan.
Afghans implement water treaties: Iran's Bitaraf LONDON, May 29 (IranMania) Iran's Energy Minister Habibollah Bitaraf said that good precipitation has helped Afghanistan implement the bilateral accord on sharing the waters of the Hirmand River. The minister told ISNA that Iran would eventually manage to receive its share of the river?s water in the year to March 2006. A senior water industry official said earlier that Afghanistan cannot disrupt the flow of water to Friendship Dam, which is constructed mostly by Iranian engineers on a river shared with Turkmenistan, by constructing a dam on Hirmand River. Reza Ardakanian, deputy energy minister for water affairs, told reporters that Kabul has signed several treaties with Tehran on cooperation on common water reserves, stressing that Iran is willing to participate in water projects in the war-torn country. Iran needs water from Friendship Dam to supply an annual 150 million cubic meters of drinking water for the northeastern city of Mashhad, where hundreds of thousands of pilgrims converge each year to visit the holy shrine of Imam Reza (AS), the Eighth Imam of the Prophet Muhammad (PBUH)?s infallible household. In 2000 and 2001, the Afghans disrupted the flow of Hirmand River into Iran, which led to the signing of a memorandum of understanding between President Mohammad Khatami and Afghan President Hamid Karzai on the need to observe the 1972 Treaty.
Afghans are being left out of their own rebuilding By: Ben Arnoldy THE CHRISTIAN SCIENCE MONITOR Arizona Daily Star - May 29 12:12 AM SAROWBI, AFGHANISTAN Along a construction detour for the new highway between Kabul and Jalalabad, four unemployed Afghans stare out as trucks struggle up a dusty hill. The men are angry that the two Chinese firms in charge of the paving project haven't employed them or many of their compatriots. "The Chinese are not hiring, and there are other organizations building schools, and they do not hire us, either," says one, Gula Jan. After years of depending on the international community for help, Afghans are frustrated that they are not more involved in the rebuilding of their own country. Yet road projects like this one underline a critical problem: Most Afghans still lack the skills needed to take over this work, even as the government begins modest efforts to try to train engineers. The short-term need to provide tangible improvements like a newly paved road often trumps the long-term work of training workers within Afghan ministries and the private sector. "Do you do something very quickly ? so that you get some demonstrable results, or do you take the slow road and face a real danger of a reversion to conflict?" asks Ameerah Haq with the United Nations Assistance Mission in Afghanistan, arguing that development work cannot be kept on hold for training. "People in rural areas will say, 'My life is no better. Nothing has happened for me.' " Land Cruisers in Kabul Yet the reliance on foreign skilled labor has not gone unnoticed by ordinary Afghans, many of whom resent the economic disparities in Kabul. The streets of the capital are packed with Land Cruisers taking foreigners to modern offices with high-speed Internet hookups. Foreigners risking their lives to come here also require higher salaries and more security, all of which drives up costs for redevelopment work. In a dilapidated Soviet-era building, W.M. Rasooli, deputy minister for public works, says most foreign road builders charge $250,000 to $500,000 per mile, but his ministry could build roads for less than half that price. Currently, only 23 percent of Afghanistan's budget for development actually goes through the government treasury; the remainder flows entirely outside. "We have 60 to 70 percent capability to do this work ourselves. The remaining 30 percent is language and computer skills, because all the documentation must be done electronically in English," says Rasooli. He argues that contracts should go directly to his office, which would allow the 60 engineers in his department to learn new standards, as well as provide higher salaries needed to woo better Afghan engineers away from other work. As it is, he says, "Engineers come and tell me that it is better to go work in the bazaar." A new reform law aims in part to rectify this by preventing nonprofit, nongovernmental organizations (NGOs) from bidding for construction contracts in Afghanistan. "If NGOs don't participate in construction work, some (skilled Afghans) may go back to government. Some may go to the private sector, which is something we want to develop as well," says Umer Daudzai, chief of staff for Afghan President Hamid Karzai. The Kabul-Jalalabad road, like most big road projects here, went through a competitive-bidding process and was awarded to private international firms. But one of the subcontractors was an Afghan NGO that was found to be a for-profit enterprise - another problem that the new reform law hopes to eliminate. More than 2,000 local NGOs operate here, most of them for-profit enterprises set up under earlier weak governments. Under the new NGO reform legislation, all NGOs will have to reregister, and many of these "fake" NGOs are expected to be weeded out. Several officials in donor agencies, however, suggested that neither Afghan construction companies nor the Ministry of Public Works would become competitive bidders on international contracts any time soon because they are still incapable of carrying out such projects. The European Commission, a major donor for the new highway, did not make hiring and training of Afghans a priority for this project, though it does have others aimed at building capacity. "The decision was made that this important road to Pakistan should be done quickly," says Harold Paul, press officer for the EC in Kabul. The road connects the Afghan capital to Towr Kham, in Pakistan, via the Khyber Pass, a crucial trading route traveled by 5,000 to 6,000 trucks a day. "The ministry at the moment doesn't have the capacity to do it properly and do it now," he says. The Chinese contractor didn't have much success finding employable Afghan engineers. The lack of skilled local engineers for the top jobs on the Kabul-Jalalabad highway boxed out Afghans from some of the less-skilled jobs as well. "I recommended hiring local staff. And (site managers) employed some of them after a test. But later on, the Chinese technicians and engineers complained about the language barrier and the level of skills," says Mu Naisheng, an assistant manager for SinoHydro, one of the two Chinese firms. New courses for engineers Given the high stakes in road building, donors have opted instead to pursue construction projects and capacity-building in parallel. Rasooli says the Ministry of Public Works has received money from the EC, the World Bank and the Asian Development Bank for such efforts. Programs include a new series of courses for the engineers at the ministry, as well as money to hire international engineers to team up with Afghans on projects. "I hope that after two years our engineers will be ready to design roads," says Rasooli. That vision isn't universal, even within the Afghan government, however. Several members of Karzai's Cabinet say ministries should stick to quality control and monitoring, leaving implementation to the fledgling private sector.
Afghans face income tax for first time 29 May 2005 KABUL,(Reuters) Afghans and foreigners working in the country are soon going to have to start paying tax on their incomes as the aid-dependent government strives to increase its revenue. The wage tax is being imposed on all businesses with two or more employees from Sept. 23, finance ministry officials said at the weekend. "This involves government employees, those who work for foreign companies and foreigners working in Afghanistan," said ministry spokesman Aziz Shams. The aim is to boost the government budget, half of which is being paid by foreign donors, he said. The International Monetary Fund and World Bank are advising Afghanistan how to start a tax regime after a quarter century of conflict and chaos but some business people already say they are facing a tax regime that hinders growth. The new tax will be set at a rate of 10 percent on income over 12,500 Afghanis ($250) a month. Income over 100,000 Afghanis ($2,000) a month will be taxed 20 percent, said the ministry's director of revenue, Abdul Malik Rahmani. Afghanistan gets half of its more than $600 million annual budget from donor nations and they are keen to see the government start developing sustainable revenue streams. But those business people who do pay tax say the tax base is far too narrow and they are already burdened by a list of taxes including a 20 percent corporate tax and a 12.5 percent tax on gross receipts. The average basic salary of a government employee is 1,250 Afghanis ($25) a month so the new tax is largely aimed at foreigners and Afghans working for foreign companies and aid groups. More than 2,000 foreigners are living in the capital, Kabul, many of them working for aid agencies.
Kabul eyes more aid as London moot delayed By: Zainab Mohammadi KABUL, May 28 (Pajhwok Afghan News) Finance Minister Anwar ul Haq Ahadi hoped on Saturday Afghanistan would receive up to 200 million dollars for the ongoing reconstruction effort. Addressing a news conference here, the minister pointed about the $200 million would be in addition to the 360 million dollars already pledged for the rebuilding of the war-battered country. The total reconstruction aid amount would become clear at the London donor moot to be held in December, he said, adding the World Bank would keep an eye on how the money was expended. The London moot, originally scheduled for next June 21, has now been pushed back to December. Ahadi took the decision after consultations with his colleagues and the international community. Ahadi told a questioner the aid would be spent on financing government servants' salaries and reconstruction projects. He asserted the Afghan government enjoyed ample say in using the money on plans it deemed worth executing. It will be pertinent to recall the third international conference on Afghanistan's uplift was held in Kabul two months back, with more than 50 donors attending it. Direct payments to the Afghan government were the main issue that generated quite a bit of heat at the conference. The Afghan president and his finance minister had then voiced strong aversion to payments via NGOs, arguing such assistance was often delayed inordinately. Asked why the London conference had been delayed, Ahadi replied the commerce ministry was busy devising an overall national development strategy spelling out uplift priorities. "That's the reason why the conference has been delayed," he argued. Road construction, resolution of civil problems, electricity supply and training government employees were the main targets outlined by the Afghan government at the Kabul moot, he recalled. "We are seeking improvements in various sectors of the economy so as to strengthen government control over donations made to Afghanistan," Ahadi concluded.
Afghanistan be declared SPECA official member today Kazinform, Kazakhstan ASTANA. May 27. By: Dulat Moldabayev UN Special program for the economies of Central Asia (SPECA) starts its new life after Astana meetings, said Deputy UN Secretary General Kim Hak-Su. Partnership with new grantors and financial institution launches new potential for SPECA, voiced Kim Hak-Su. Besides, Afghanistan is to be officially announced SPECA member today. In turn, Foreign minister of Kazakhstan Kassymzhomart Tokayev stressed that the fact of Afghanistan?s joining to SPECA is significant and witnesses growing interest of other Central Asian countries. Mongolia also expresses interest in this program. SPECA is aimed to unite Central Asian states in thematic directions such as infrastructure projects and trends discussed during the forum.
U.S.-Afghan relationship on edge Toronto Star (Canada) 27 May 2005 U.S. President George Bush and Afghan President Hamid Karzai may have agreed to a strategic partnership between their two countries, but their meeting in Washington this week did not exactly take place in a congenial atmosphere. The visit was preceded by two most unpleasant incidents - violent protests by Afghans against the alleged desecrations of the Holy Duran in Guantanamo and reports about the torture and death of two Afghan suspects at the American air base at Bagram. Even though America talks so much about upholding human rights, its record in this matter has hit rock bottom. Abu Ghraib has now paled into insignificance in the wake of reports about the shocking nature of torture at Bagram and Guantanamo. At Bagram, two Afghans were tortured to death by their American interrogators after being subjected to every imaginable kind of abuse a U.N. spokesman called the torture "utterly unacceptable" and "an affront to all that the international community in Afghanistan stands for." President Karzai was so shocked by the reports of torture and death that he went public with his denunciation of the abuse shortly before leaving for Washington. He called for punishing those involved. President Bush, too, had his own complaints. The most important of America's complaints is the phenomenal rise in poppy cultivation. Whatever else the Taliban might have been, they were hard on narcotics, for they had succeeded in virtually eradicating poppy cultivation and the manufacture and smuggling of heroin. According to U.N. statistics, poppy cultivation last year increased to 51.7 million acres, though U.S. statistics put it at 87.5 million acres, with Afghanistan producing 90 per cent of the world's opium. While the American complaint on this issue may be justified, Washington has put too much emphasis on a military solution to Afghanistan's problems. At present, there are 18,000 U.S. troops there, and 80 per cent of America's annual $15 billion (U.S.) spending goes to the military. Yet violence is on the rise, as seen in the recent kidnapping of foreign aid workers and the attacks on security forces by the Taliban. Post-war reconstruction seems to have taken a back seat. It would be better if Kabul and its friends put more emphasis on economic reconstruction. Pakistan, in spite of its own problems, has pledged $100 million to Afghanistan's reconstruction. The people of this country share ties of language and culture with the Afghan people and have been interacting with them for centuries. Perhaps Islamabad could take the lead in organizing a regional effort and motivate the South Asian Association for Regional Co-operation (SAARC) countries into doing their bit to help Afghanistan rebuild itself. This is an edited version of an editorial that appeared in Dawn, Karachi.
Herat Officials Discuss Commerce Iran Daily MASHHAD, Khorasan Razavi, May 27 Afghan and Iranian trade officials here Thursday discussed ways of further expanding economic relations between the provinces of Khorasan Razavi and Herat, in line with their governments? attempts to boost broad-based relations between the two historically-bound neighbors. According to ISNA on Friday, developing two-way trade relations, setting up a permanent and temporary exhibition center in Herat to showcase Iranian goods and exchange of visits by trade delegations were the focus of talks between head of Herat Chamber of Commerce and trade officials at Khorasan Razavi Commerce Department. The two sides agreed to take joint measures to combat unauthorized trade between the two states and the Iranian party has pledged to permit only the export of high quality commodities to the neighboring country. Iran has been trying to play a lead role in the reconstruction of war-torn Afghanistan following the fall of the Taliban regime. During a recent visit to Afghanistan, Iran?s Minister for Economic Affairs and Finance Safdar Hosseini said that over the past three years, extensive cooperation has been going on between the two countries within the framework of Iran?s participation in Afghanistan?s reconstruction. Iran, he pointed out, has undertaken infrastructure projects as well as pursuing closer economic trade. He said implementation of major projects including Dogharoun-Herat road, Milak bridge, water and power projects, agricultural and telecommunications projects, construction of medical centers, providing technical as well as professional and cultural training in Afghanistan indicate the Iranian government?s firm determination to assist the Afghans rebuild their country. NEW AFGHAN INCOME TAX LAW TO COME INTO EFFECT FROM 23 SEPTEMBER BBC Monitoring (Tolo TV, Kabul) 27 May 2005 [Presenter] According to the law on income tax, as of 1 Mizan 1384 [23 September 05], any economic entity that has two or more employees should impose a 10% tax on employees who earn 12,500 to 100,000 Afghanis [250 to 2,000 dollars per month] and a 20% tax on employees whose incomes exceed 100,000 Afghanis. Also, the Finance Ministry has annulled the law exempting private companies and organizations from paying tax. [Correspondent] Asad Sakhi Farhad, the deputy finance minister in charge of revenues, announced at a news conference this morning that, according to the law on taxes, all government and non-governmental organizations with Afghan and foreign employees must tax their employees. Mr. Farhad said the law on income tax will not be applicable to people and departments that are exempted from paying taxes according to their country's diplomatic relations with Afghanistan. [Passage omitted: repetition] [Sakhi Farhad] Employers should impose this tax on their employees as of 1 Mizan. As of 1 Mizan, all organizations and departments, private or government companies and enterprises, foreign organizations, NGOs, and political and military departments with two or more employees must pay tax. [Correspondent] Mr. Farhad added that the law exempting some organizations from paying tax has been annulled, but new privileges have been announced for investors. The Finance Ministry will compensate companies as part of these new privileges.
KARZAI TO LAY FOUNDATION STONE IN TAJIK-AFGHAN BORDER BRIDGE BBC Monitoring (Avesta website, Tajikstan) 27 May 2005 Dushanbe, 27 May: Afghan President Hamed Karzai is to attend the laying of the foundation stone of a bridge to be built across the River Panj at the Panj-i Poyon border checkpoint [on the Tajik-Afghan border], the head of the Foreign Ministry information department, Igor Sattorov, told journalists at a news conference in Dushanbe today. Sattorov said the foundation ceremony would be held on 2 June. The bridge, extending over 650 meters and over 10 meters wide, will be built with financial support from the US government. The cost of the project is 30m dollars. According to experts' estimates, the capacity of the bridge will be about 1,000 vehicles per day. [Passage omitted: a road linking with the checkpoint is being repaired; it is not yet known whether Tajiks will be involved in its construction]As part of his visit, Karzai is expected to hold talks with Tajik President Emomali Rahmonov and then the two presidents will take part in the ceremony of laying the foundation stone. Karzai will arrive in Tajikistan on 1 June.
Afghan government postpones London donor conference from June to December Associated Press May 26, 2005 Afghanistan's government said Thursday it has postponed until December an international donor?s conference in London that had been set for next month. Finance Minister Anwar ul-Haq Ahadi made the decision after consultations with government colleagues and the international community, a statement from the Ministry of Finance said. It gave no reason for the delay of the meeting, which had been scheduled for June 21. International donors are pouring hundreds of millions of dollars into Afghanistan to help it rebuild after a quarter century of war.
Opium remains major source of income in Afghanistan KABUL, May 26 (Xinhua) Attired in a tattered dress and busy in shoveling a piece of land in front of his mud house, Abdul Qadir said that he is hopeful to reap poppy crop next year. Poppy cultivation in 2004, according to a report released by the United Nations International Drug Control Program (UNDCP) last November, covered 131,000 hectares, while the figure in the preceding year was 80,000 hectares. "We have no choice but to plant poppy as it is hugely profitable," the 52-year-old Qadir in northern Baghlan province told Xinhua. Lightening his house by operating Chinese small power generator Tiger and watching a western film on his multi-system television, Qadir added that he would not give up poppy cultivation unless government provides alternative crops and readjusts domestic products' prices. Currently the price of one Seer or 7 kg of wheat is 70 Afghanis (1.5 US dollars) while 1 kg opium poppy costs 10,000 Afghanis in villages. In his efforts to stem the booming poppy cultivation, Afghan President Hamid Karzai announced Jihad or holy war against the menace last year. The decree, endorsed by Ulema or religious scholars, was greatly welcomed by locals nationwide but failed to implement as the government failed to substitute poppy with legal crops. "I bought 1 kg opium with 7,500 Afghanis from Baghlan province two months ago and sold it at 18,000 Afghanis here in the capital city last week," low-grade government employee Zahirudin told Xinhua. The price goes much higher in the border areas with Iran or Pakistan, the main corridors for trafficking onward to Europe and the United States. High rate of unemployment, low salary and continued warlordism in the vast rural areas make it difficult to reduce the cultivation of poppy in the poor and war-shattered nation. "In today's Afghanistan how can it be possible for a low-income government servant like me to run daily life honorably," Zahir noted while referring to the insufficient salaries of government servants in the costly capital city of Kabul. The prices of basic necessity and the rent of accommodations have been constantly soaring over the past three years while the reconstruction process, as people say, is on snail's pace as no housing complex has been completed and no giant project to create job opportunity is on offing. In a bid to overcome the challenges, Afghan President Hamid Karzai, who is on official tour to the United States, has urged the international community to boast its assistance in war against drugs. "We have done our job in war on drugs and now it is international community's turn to discharge its responsibility in poppy eradication by providing alternative crops to our farmers, "Karzai said in Washington. His call came amid the New York Times' report that the Afghan government has failed to control booming poppy crops, the source of heroin, even in Karzai's home province Kandahar, the former stronghold of Taliban. Karzai rejected the report as unfounded. He said much of the opium was still in areas under the firm control of foreign troops, which refers to the US-led coalition based in the southern militant plaguing of Kandahar and neighboring provinces. He also boasted that due to his government's efforts poppy cultivation dropped 30 percent this year and the figure would further go down next year. The government in its anti-drug drive destroyed over 15,000 hectares of poppy fields last year, and the campaign is still going on. "Our Counter Narcotics Police have seized 40 tons of narcotics over the past five months," Deputy Interior Minister for Counter Narcotics said. Poppy's elimination, according to officials, requires a few years' hectic efforts in the poverty-stricken central Asian state. "It cannot be eradicated in one or two years. It takes a few years to overcome the problem and get the country rid of narcotics if the international community backs us particularly in providing alternative crops to our farmers," Minister for Narcotics Habibullah Qadiri told Xinhua. Under a national strategy launched in May 2003, the Afghan government plans to reduce poppy cultivation by 75 percent by 2008. "Of course, I would give up poppy cultivation if the government provides alternative livelihood and finds market for domestic products," observed a young farmer and small opium trader Abdul Hanan.
Karzai Explains Kabul's Economic Goals during U.S. Visit RFE/RL 05/26/2005 By: Ron Synovitz 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 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 Mc Mullin, 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 spends 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. 19m Afghanis donated to Herat water supply By: Sadiq Behnam Herat, May 26 (Pajhwok Afghan News) An Afghan businessman has donated more than 19 million Afghanis (about $400,000) for a water supply project in a village of Guzra district in the western Herat province, provincial officials said Thursday. Engineer Habibullah Zoran, head of the water supply department, told Pajhwok Afghan News the scheme, which would provide three thousand villagers of Khodestan safe drinking water for the first time, would be completed in nine months. With a total length of five kilometers, the official added, pipes would be laid to supply tap water to villages, whose residents would pay a cess in terms of per meter cube to the department concerned. Haji Abdul Sattar Pahlawan, the businessman who donated the money, said: "The water consumption rate will be determined by the Herat water supply department per meter/cube. I meant to serve people this way." Speaking on behalf of villagers, Haji Mohammad Naeem observed: "There is no tap water yet and thus people are using water from uncovered wells, which tends to cause diseases to people - especially children." Appreciating the donation, Zoran hoped it would help his department meet a longstanding public demand for the supply of tap water to remote and poor hamlets.
Pajhwok Afghan News 05/26/2005 By: Zainab Mohammadi KABUL - The Customs and Incomes Tax Department Thursday announced a tax on private and commercial income would be levied from September 23. Addressing a press conference here, Deputy Director of Customs and Income Department Asad Sakhi Farhad said all Afghan nationals, in government and private service, would be required to pay the tax. According to the new tax law signed by President Karzai in March, each Afghan national whose monthly earning exceeds 12,500 Afghanis ($250) will have to pay 10 per cent of his/her income to the government. Companies registered with the government will deposit 20 per cent of its annual income in the national exchequer. Farhad said organizations having two or more workers would pay tax to the government. At the end of each month, he pointed out, there would be a 10-day deadline for the salaried class to pay the tax failing which a fine of 0.01 per cent would imposed on the errant individual. Asked if the financial position of the war-weary people allowed them to pay taxes, the official replied: "We have moved up the tax bracket as high as 12,500 Afghanis to provide relief to the low-income class." Besides individuals, the law also applies to restaurants, Internet clubs, aviation companies and other commercial enterprises. Owners of real estate like residential buildings hired by NGOs and companies will have to pay 20 per cent of the monthly rent - if it exceeds 15,000 Afghanis ($300). Abdul Malik Rahmani of the Finance Ministry estimated 6,000 - 20,000 people would come under the tax net, with government coffers receiving up to $200 million a year from the levy.
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