Aug 13, 2009

Afghanistan's Future, from Karzai's Chief Opponent

How Afghans Can Build A Better Future

By Ashraf Ghani
Financial Times
August 13, 2009

((The writer is a candidate in next week's Afghan presidential election))

Afghanistan is one of the poorest countries in the world, yet it is rich in resources and potential. The upcoming elections are an opportunity for Afghans to elect a government that is committed economic growth for all, and to replacing the current predatory regime where wealth accrues to a few corrupt cronies.

From energy and agriculture to mining and construction, the country possesses the resources for robust and sustained development for decades to come. With a regional co-operation framework, Afghanistan can become a strategic land-bridge for goods, services and oil pipelines between south Asia, central Asia, the Middle East and China.

In a semi-arid region, water is everything. Afghanistan produces 80bn cubic metres of water each year, but only taps 20bn for irrigation, drinking and hydropower. The Amu River, shared with central Asian neighbours, alone has the potential to produce 10,000 megawatts of electricity a year.

As power is the critical driver of development, a regional partnership on energy initiatives could serve as the foundation stone for wider regional economic co-operation. Afghanistan sees potential electricity market partners through an electricity grid joining China, central Asia, Pakistan, Iran and eventually India.

Unfortunately, the corruption of the current regime has allowed drug trafficking to flourish across borders instead. In turn, the booming opium and heroin trade has funded the expansion of the insurgency and crippled the economy. The threat of drugs will only be eliminated when Afghan agriculture develops. Rural farmers will turn away from poppies if their incomes from staple crops rise from the current level of $1 a day to $4. That is an achievable goal for the near future, involving investment in irrigation, technology and education. In the short-term, Nato forces present a large potential purchaser and an opportunity to turn Nato into a friend of the Afghan farmer. In addition, European Union trade preferences for Afghan agriculture could provide an enormous boost for our farmers.

Afghanistan is also rich in mineral resources. US Geological Survey reports have confirmed extensive deposits of copper, gold, gas, iron and barite, as well as gemstones such as emeralds, lapis lazuli and rubies. A mining-based economy is therefore a real medium-term alternative to the current drug-based economy.

Both sectors will depend on a reliable transport network to ensure on-time and safe deliveries. Investing in roads and railways to link the major mines in southern and central areas of the country to potential markets in the region and to China is essential.

Creating a competitive national construction industry is a prerequisite for effective utilisation of domestic resources. Fortunately it is the sector able to create the greatest number of jobs immediately. Critically, it will also make foreign assistance four to nine times more effective. With a coherent infrastructure development plan, including my goal of creating 1m new homes, the Afghan construction industry can become a powerhouse for creating jobs and wealth.

Afghan entrepreneurs are not short of money, but withering security and growing corruption are forcing them to take their capital abroad. In the Gulf alone there is an estimated $16bn of Afghan money waiting to find outlets. The ministry of finance estimated, in March, that 70 per cent of potential domestic revenue is lost owing to corruption and mismanagement.

My vision of an inclusive, stable and prosperous Afghanistan is based on my experience as finance minister from 2002-04 when I worked to achieve lasting reforms. For example, in just two years we modernised communications in Afghanistan. Partnering with the minister of communications, I refused to offer sweetheart deal licences to private companies. Instead, we insisted they gain access to the Afghan market through a transparent bidding process. The number of mobile telephones in the country jumped from 100 in July 2002 to more than 1m at the end of 2005, and private investment in mobile phones exceeded $200m. A government committed to transparency, accountability and the rule of law can create a stable, business-friendly environment in Afghanistan.

The right government can help Afghanistan tap its potential. The Afghan people are ready to learn, work and do business with the world.

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