Afghanistan’s economy faces crisis if the international community fails to live up to commitments to rebuild the damaged nation, the country’s finance minister said yesterday. Anwar-ul-Haq Ahadi told Emerging Markets that without additional investment, donor assistance and the fulfillment of existing aid pledges, prospects for the country’s frail economy will not improve. “The Afghan economy is too weak to borrow resources,” Ahadi said, adding that he hopes the international community will provide additional grants over the $10 billion it has pledged to the country.
Foreign investment is also key to turning around an economy crippled by decades of conflict, and undermined by its reliance on opium farming. The country requires about $20 billion in investment over the next five years to enable it to stand on its own feet, about half of which must go towards physical infrastructure, Ahadi said. So far, some 1,500 international firms have aired plans to invest a total of more than $1 billion in the country.
The government has bold plans to sell off state firms: about 49 companies are ready to be privatized, the minister said, and this year the government expects to sell off or liquidate around 15 businesses. Next year an additional 20 companies, in industries ranging from printing and agrichemical to hospitality, will be sold in a process that should wind up by 2008, he said.
Ahadi also urged strong cooperation between south Asian governments to stamp out the scourge of terrorism across the region while ensuring that Afghan-based militants cannot find sanctuary in neighbouring countries. “It is not in the interests of any country to harbour terrorists. It only serves the interests of the terrorists themselves,” Ahadi said.
The government of Hamid Karzai has in the past voiced concern about its porous borders with neighbouring Pakistan and Iran that has allowed terrorists to move at will between them. “It is likely that they [the terrorists] have international connections with similar interests in other parts of the world,” Ahadi said.
The recent murder in southern Afghanistan of a Hyderabadi engineer is a “shocking incident.” It is unfortunate that those people who are trying to help Afghanistan get on its feet have become victims of terrorism.
“We can’t give in; it would be disastrous if we did. There would be a larger threat not only to the reconstruction of Afghanistan but to the entire world,” Ahadi said.