Economic Press Review
June - 10 - 16

Headlines 

Fruit exports may be exempted from taxes  

Oxfam helps Afghan potters improve ceramics, income 

Ahadi optimistic of customs revenue boost  

Compound housing Bamiyan gov?t depts. on the cards  

California man pushes project to bring soybeans to Afghanistan 

Afghan minister warns Turkmen?s could break power accord 

Karzai to visit Tajikistan on Monday 

$1m fine imposed on cell-phone Company  

The Pipeline that will change the world 

ADB to Help Conserve Ecosystems and Wildlife Resources in Afghanistan 

Trade fair opens in Kabul to attract foreign investment 

Press Clippings

Fruit exports may be exempted from taxes

By: Zainab Mohammadi

KABUL, June 15

(Pajhwok Afghan News) 

The government Wednesday agreed in principle to exempt fruit merchants from a number of taxes to boost Afghanistan's fruit exports. 

Commerce Minister Hedayat Amin Arsala made the announcement at a conference jointly organized by fruit exporters and relevant government agencies here.

 The minister argued the demand from merchants had been accepted to increase the country's fruit exports as well as to provide relief to exporters.  

Tax exemption was a long-standing demand of fruit exporters, who often complained of a plethora of levies including custom duty (border tax), transit tax and several other legal and illegal charges they had to pay at various places. Fruit is one of the essential items on Afghanistan's export list. 

Besides Afghan traders, the conference was also attended by traders from neighboring countries and government representatives, who deliberated on ways and means to jack up Afghan fruit exports.  

The traders also expressed grievances about the non-existence of a proper market, lack of technical facilities and an improper transportation system.  

Officials of the Finance and Transport Ministries agreed to abolish the taxes besides improving shipment arrangements. They assured the decision would be implemented after its approval by the central cabinet.  

Sohrab Ali Safari, Minister for Public Works, pledged to improve the transportation system by constructing and repairing the road networks.  

Mohammad Hashim Waez Zada, senior planning official of the Transport and Aviation Ministry, said they were ready to give the traders tax relief from three to five per cent. He added the ministry had asked the Afghan flag-carrier Ariana Airline to facilitate fruit exporters.  

Ghulam Nabi Farahi, Deputy Commerce Minister, said Afghanistan had earned about $90 million last year from fruit exports. He hoped the exports would shoot up after adopting the new measures.  

The traders welcomed the steps and urged the government to ensure their implementation. "We are fully satisfied with government's assurances," said Haji Abdul Rasul Parsa, a Balkh-bases fruit trader, who hoped the new measures would also benefit farmers.

Back to top 

Oxfam helps Afghan potters improve ceramics, income

One World

15 June 05 

Oxfam America and ACTED, which is a French organization, are helping Afghan potters improve their income as well improve the quality of their ceramics through training and by setting up an economic interest group. 

The two organizations are reviving the rich tradition of pottery in the village of Kulalin, which dates back 300 years, where intense fighting Taliban and Northern Alliance forces had resulted in the ceramics crafts and business being shut down completely. Houses, schools, and community buildings were destroyed, as well as the workshops and kilns of potters. 

Help to the potters has been in the form of trainers, constructing of new kilns, adding new designs and using improved methods of making pottery. An economic interest group, which consists of businessmen, craftsmen and the potters, has been established to facilitate the selling and marketing of the manufactured products.

Back to top 

Ahadi optimistic of customs revenue boost

Pajhwok Afghan News

06/14/2005

By Khalida Khursand  

HERAT CITY ? Finance Minister Anwar ul Haq Ahadi said Tuesday the government hoped for increased custom revenues during the current fiscal year. 

Ahadi's optimism stemmed from consistent government attempts at boosting border security to curb smuggling and combating corruption at all tiers. He argued that both security and graft elimination were central to jacking up state income. 

Speaking to newsmen in the western city of Herat, the finance minister said: "We are in an all-out push to root out corruption at governmental level and improve security at borders."  

The International Security Assistance Force (ISAF) would train the Afghan police for secure the borders and preventing smuggling, with a view to lending stability to the country's economy.  

He reckoned Herat custom's collections alone accounted for 50 percent of Afghanistan's total income under this head. The Customs Department in Herat generated up to 80 million dollar in income last year and this year's revenue is expected to be quadrupled.  

Ahadi continued they were mulling a whole host of ways and means of increasing custom revenue. Having two transit ports in Islam Qala and Tor Ghundi, Herat borders Iran and Turkmenistan and thus has enormous significance in terms of customs income.

Back to top

Compound housing Bamiyan gov?t depts. on the cards

By: Ahmad Sanayee

BAMYAN CITY, June 12

(Pajhwok Afghan News) 

Architectural designing of a compound, meant for housing government departments in the central Bamiyan province, has been approved, officials said Sunday. 

The United States Agency for International Development (USAID) will fund the project, bringing together government offices, providing for official residences and also including school buildings and parks. 

Bamiyan Governor Habiba Sorabi told Pajhwok Afghan News: "The credit for this project goes to the people of Bamiyan and I am thankful to Allah for enabling us to initiate this positive step."  

Nisar Ali Nisar, Bamiyan mayor, called the project part of an urban plan, envisaging government facilities for people. The scheme is aimed at construction of offices and public buildings such as mosques, schools, restaurants and cinemas.  

Nisar added governmental offices were currently lying far away from each other and most of their buildings were old and short of capacity. "Engineers of the Urban Development Ministry have prepared the scheme for the complex in the Mullah Ghulam locality of the city," the mayor continued.  

This plan will bring together up to 30 government institutions including the governor's office, the information and culture department, health department, municipality, provincial court and other institutions.

Back to top 

California man pushes project to bring soybeans to Afghanistan

6/12/2005

(AP) - PASADENA, Calif. 

Steven Kwon believes soybeans can save the people of Afghanistan - and he's doing something about it. 

A senior nutrition scientist for Nestle USA, Kwon also runs Nutrition Education International, a nonprofit organization he started in 2003 to help reduce mortality rates in Afghanistan. One in five Afghan kids die before age 5, Kwon said, and one in six women die during childbirth. 

His solution is offering a better diet through soybeans, which would supplement a traditional diet of naan bread and chai tea. Soybeans are high in protein and soy fiber staves off hunger. 

"Seeing poor people, suffering people, you are compelled to do something from a humanitarian point of view," said Kwon, a Korean man with a soft smile and a gentle demeanor. 

Since starting the relief effort, Kwon has spent his own money and burned up vacation time from his day job on trips to Afghanistan to teach nutrition, consult with agriculture experts and secure the country's endorsements. He's also solicited donations from friends and businesses. 

His efforts have taken root. 

Last year, Nutrition Education International cultivated soybeans on five acres in Mazar-e Sharif, Afghanistan's main northern city. The crop also was planted in a dozen other provinces in April. Kwon said that if the harvest is bountiful in October, Afghan leaders would test the plants in all 32 provinces. 

Afghan officials are hopeful. They speculate soybeans could improve health, provide jobs and perhaps supplement the country's opium-producing poppy. 

Mariam Nawabi, commercial and trade counsel for the Afghanistan Embassy in Washington, D.C., said Kwon's efforts could save lives. "He had a vision for what could be possible if the people there are given a chance," she said. 

Kwon's organization has spent about $70,000 on the project. Now, it needs $25,000 for machinery to assist in the October harvest. 

It was Kwon's experience with war that impelled his humanitarian work. He served with the Korean Army from 1968 to 1970 in Vietnam, where he witnessed suffering and poverty. "I saw many people without fathers and how terrible life is to the children and women," he recalled. "I always have some sensitivity and feeling for those people who have been through war."

Back to top

Afghan minister warns Turkmen?s could break power accord

BBC Monitoring (Pagah ? Afghanistan)

11 June 2005 

Text of report entitled "The cost of electricity has dropped by 50 per cent" by Afghan newspaper Pagah The price of electricity has fallen by 50 per cent in all provinces, said Alhaj Mohammad Ismail, the energy and water minister, at a press conference held [in Herat] yesterday. According to the minister, the cost of electricity has fallen from four Afghanis per kW to two. 

He added: There are serious problems in the power cable distribution network as well as with power consumption. For this reason, if the relevant officials do not solve these problems and the people do not cooperate, Turkmenistan will cut off electricity supplies and terminate its agreement.

He also took a dim view of the current security situation in Herat, claiming that he had achieved success in ensuring better security during his administration.

Back to top

Karzai to visit Tajikistan on Monday

By: Habibur Rahman Ibrahimi

KABUL, June 11

(Pajhwok Afghan News) 

President Hamid Karzai is scheduled to leave for neighboring Tajikistan on a daylong official visit on Monday to inaugurate construction work on a bridge on the Amoo River.  

Khaliq Ahmad Khaliq, a senior press officer at the presidential palace, told Pajhwok Afghan on Saturday: "After an official meeting with his Tajik counterpart, President Karzai will open construction work on the bridge linking Tajikistan and Afghanistan."  

The Amo Bridge would cost 60 million dollars to be donated by the United States, said Khaliq, who would not reveal as to when the project would be completed. 

Foreign Minister Abdullah Abdullah, National Security Advisor Dr Zalmay Rasool, Commerce Minister Hidayat Amin Arsala, Economic Affairs Minister Dr Mohammad Amin Farhang, Public Works Minister Suhrab Ali and Labor and Social Affairs Minister Sayed Ikramuddin.

Back to top 

$1m fine imposed on cell-phone Company

By: Zubair Babakarkhail 

KABUL, June 11

(Pajhwok Afghan News) 

The Afghan government has imposed a fine of $1 million on the Roshan cell-phone company for allegedly using greater frequency than permissible under an agreement it had concluded with Communications Ministry. 

An official at the Communications Ministry told Pajhwok Afghan News on condition of anonymity on Saturday Roshan had been allowed the ministry had allowed eight mega hertz (MHz) frequency. 

However, the leading mobile phone company exceeded the permissible limit in an attempt to earn more profit, he alleged, arguing a violation of the terms and conditions of the accord entailed a fine ranging from $1,00000 to $2,50000.  

A fine of $250,000 had earlier been imposed on the company after it was found involved in frequency theft for the first time, the sources disclosed. But Roshan used dilatory tactics to pay the fine, he added. 

When the company was found guilty of using 162-channel frequency for a second time, a fine of $1 million was imposed on it, the official continued. "If it fails to submit the amount within two weeks, it would be sued in court of law." 

Meanwhile, Mohammad Naser Naseri, legal advisor to the ministry, confirmed they had earlier received information regarding the frequency theft by the company. But punitive action could not be initiated then for lack of concrete evidence. 

Senior officials of Roshan cell-phone Company, when contacted by this news agency, flatly refused to admit or repudiate the claim.

Back to top

THE PIPELINE THAT WILL CHANGE THE WORLD;

By: Daniel Howden and Philip Thornton

The Independent (London)

Sat, 11 Jun 2005  

The first drops of crude will snake their way along a pipeline that traverses some of the most unstable and war-ravaged countries on earth. This is the oil flow that was meant to save the West, and this morning the taps were turned on. 

Only 42 inches wide, the Baku-Tbilisi-Ceyhan was supposed to alter global oil markets forever. The 1,000-mile project has transformed the geopolitics of the Caucasus and its impact is now being felt in the vastness of central Asia.  

Output is supposed to reach one million barrels a day ?more than 1 per cent of world production " from an underground reserve that could hold as many as 220 billion barrels. Its architects and investors claimed the pipeline would shore up energy supplies in the US and Europe for 50 years, protecting our gas-guzzling way of life and easing our reliance on the House of Saud. 

The goal of the ambitious project, which makes its tortuous way from the Caspian in Azerbaijan, through Georgia to the Mediterranean coast of Turkey, is to ease the reliance of the West on the Organization of Petroleum Exporting Countries (Opec) and bring cheaper fuel to our filling stations. The pipe threads its way through the region in a seemingly modest private corridor only 50 meters wide but nothing has been allowed to stand in its way. From forests to labor laws and endangered species to democracy protesters: all have given way to the costliest and most significant pipeline ever built. 

The project, known as BTC, has driven a wedge between the US and Russia, triggered political unrest in the countries it passes through and their neighbors and sparked concern at extensive damage to the environment. 

Since the 11 September 2001 terrorist attacks in the US, concern at the West's dependence on Persian Gulf oil has intensified. For Washington, the opening is a cause for celebration. 'We view this as a significant step forward in the energy security of that region,' said Samuel Bodman, the US energy secretary, who stood next to the three heads of state at today's ceremony. 

With him at the pumping station controls was the president of the tiny former Soviet republic of Azerbaijan. The BTC has allowed the Ilham Aliev to become a firm friend of the West while overseeing a government condemned for human rights abuses and sitting at the head of an administration placed 140 out of 146 in Transparency International's global corruption index. 

The politics of the pipeline have also changed the face of Georgia, where the battle for control with Russia saw immense US influence deployed in support of the so-called 'Rose Revolution'. The popular protest ushered the American-educated Mikhail Saakashvili into power two years ago. Washington's new ties with Tbilisi were amply demonstrated when George Bush became the first US president to visit the country earlier this month. 

In the long-term US ally Turkey, where the pipeline crucially delivers its oil direct to the Mediterranean ?by passing the tanker-clogged Bosphorus straits, it is no accident that it does so right next to the American airbase at Incirlik. 

When big oil companies turned their attentions to the potential Caspian energy reserves released from behind the collapsing walls of the Soviet Union the region was billed as the 'new Middle East'. If only the reserves could be securely transported from the landlocked sea to the Mediterranean, the West would be gifted a vital alternative to the volatile Persian Gulf and the region would be freed from the iron grip of Russia which had previously monopolized the export routes of their former Soviet satellites. 

Once the Soviet empire fell, the Caspian found itself surrounded by five nation states "Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan. 

The region's supply of cheap oil and key position on the historic border between the West and the East meant that countries quickly moved into position like pieces on a chessboard. 

Three rival plans were drawn up ?a northern route through Russia, a southern alternative through Iran and the central option through the Caucasus to the Mediterranean. 

The winner could be in little doubt: the middle road was the only one which guaranteed Washington and its corporate allies a corridor of control. 

The US Vice-President Dick Cheney, then chief executive of oil services giant Halliburton, was among the first to be swept away in the excitement. 

'I cannot think of a time when we have had a region emerge as suddenly to become as strategically significant as the Caspian,' he said in 1998. 

Now, more than a decade and $ 4bn (?2.2bn) later, almost three quarters of which came from bank loans underwritten by government agencies and ?320m in taxpayers' money, the pipeline is open. 

But this chapter of what Kipling called the 'Great Game' ?the secret battle to dominate Central Asia ?has only reached the end of its first phase. 

The fanfare at British oil giant BP's gleaming new terminal at Sangachal in Azerbaijan may yet prove to be premature. 

Stripped of the American hype of the 1990s, the crude that began a very modest flow this morning is the first installment of a reserve many analysts are now convinced is actually only 32 billion barrels ?equivalent to that of a small Gulf player such as Qatar. 

The game now moves to the trans-Caspian pipeline and to the immense plains of Turkmenistan and the political cauldron of Uzbekistan, Afghanistan and beyond.

Back to top

ADB to Help Conserve Ecosystems and Wildlife Resources in Afghanistan

Asian Development Bank

06/10/2005 

ADB will help conserve biodiversity in selected protected areas of Afghanistan while addressing the basic needs of communities in the buffer zones, through a technical assistance (TA) grant package approved for US$1.785 million. The TA is structured in two interlinked components: a protected area component and a buffer zone component.  

The protected area component, financed with $975,000 from the Global Environment Facility, will help conserve global significant biodiversity in selected key protected areas. It will develop management plans and conduct biodiversity assessments; promote capacity building in protected area management; provide basic park infrastructure and field equipment for monitoring and surveying; develop ecotourism by emphasizing links between conservation and benefit for local stakeholders; and support key policy and institutional reforms. 

The buffer zone component, financed with $810,000 from the Poverty Reduction Cooperation Fund from the Government of UK, will link development interventions to conservation goals through conservation stewardship agreements. 

It will conduct participatory assessments of target communities to identify their needs and priorities for action and a strategy to reduce poverty while protecting natural resources. It will also provide skills training and promote the empowerment of women by providing alternative livelihoods. 

The components will also pilot-test ways to improve food security and access to health and education, and will provide microfinance services. 

"Local communities located within nature reserves and their buffer zones are highly dependent on natural resources to sustain and enhance livelihoods," says Ali Azimi, an ADB Senior Environment Specialist. 

"Therefore empowering the local communities in the management of protected areas will be the strategic approach to promote socioeconomic stability among the rural poor while conserving natural resources within the protected areas." 

More than two decades of devastating war have had a severe impact on the biodiversity of Afghanistan. Endangered species of plants and animals found in all representative ecosystems, ranging from the arid deserts of the southwest to the alpine valleys of the Hindu Kush, are under severe threat. 

Afghanistan's first National Park at Bande Amir and five other wildlife reserves and sanctuaries established in the 1970s, after years of efforts, were abandoned along with other protected areas. Institutional development for the management of protected areas has also remained at a standstill during the last two decades, with experienced staff members needed to maintain the system of protected areas nonexistent, neither have financial resources been allocated during the same period. 

As Afghanistan's population is dependent on natural resources for economic and social welfare, the degradation of these resources has severely impacted the livelihoods of the poor. "Successful poverty reduction and protected area management models that come out of this TA will be considered for broader application nationwide," adds Mr. Azimi. 

The Ministry of Agriculture and Food is the executing agency for the TA, which is due for completion in November 2006. The Government is contributing $122,000 equivalent, toward the TA's total cost of $1.907 million.

Back to top 

Trade fair opens in Kabul to attract foreign investment

Xinhua General News Service

June 8, 2005 Wednesday 

The Afghan government opened here Wednesday an international trade exhibition, in a bid to attract more foreign investment to the post-conflict country. 

Besides national companies, over 100 international firms from 20 countries including China, Iran, Pakistan and the United States put in display their products on the six-day fair.  

Speaking on the occasion, Afghan Minister of Commerce Hedayat Amin Arsala said his government would spare no efforts in attracting foreign investment in the post-war nation. "Afghan government is determined to provide all facilities for the national and international investors in order to enable them to invest in the field of their interests for the betterment of this nation," he said. 

It is the fourth time that such international trade exhibition is held in post-conflict Afghanistan. 

Hundreds of national and international firms, according to commerce ministry officials, have invested millions of US dollars in different fields, especially in construction in the post- Taliban central Asian state.

Back to top