– Minister of Foreign Affairs Mr. Kamal Kharrazi of Iran,
– Mr. Hayat Amin-Arcola, Deputy Chairman and Minister of Finance of Afghanistan,
– Mr. Shauna Aziz, Minister of Finance and Economic Affairs of Pakistan,
– Mr. Thames Masher, Minister of Economic Affairs and Finance of Iran,
– and Mr. Mark Moloch-Brown, Administrator of UNDP,
Distinguished leaders of the private sector,
Ladies and Gentlemen,
Last January in Tokyo, Chairman Karzai highlighted the private sector as the principal engine of growth for Afghanistan’s recovery. In Afghanistan as elsewhere in a rapidly globalizing world, the private and public sectors share mutually reinforcing roles in development.
Vibrant, dynamic private sector is needed for the speedy recovery of the Afghan economy, a recovery which is dependent on Afghan self-reliance, entrepreneurship and productivity. But that recovery cannot be sustained without trade and commerce between Afghanistan and its neighbors, both near and far. Hence the purpose of this conference, to examine and stimulate this economic interdependence between Afghanistan and its two close neighbors, Iran and Pakistan, and to address the driving forces of that interdependence – trade, private sector partnerships and public-private collaboration.
It’s an honor to speak to this gathering in the dual capacity of Resident Representative of UNDP in Afghanistan, but also as Deputy Special Representative of the Secretary-General of the UN in that country. Wearing both hats, Excellency, may I thank you and your government for the welcome extended to all of us visiting Teheran and for the excellent arrangements made for this important event.
It’s an honor for UNDP to be a partner in this endeavor and we hope to be able to play a continuing role in support of this trilateral co-operative initiative. Mr. Akhtar Brahmi, Special Representative of the Secretary-General in Afghanistan, has also asked me to convey to you his warmest greetings. Unfortunately, the date for this conference coincides with a meeting that he is attending in Geneva on security sector reform and development of the new Afghan army and police force. Assured security is of course an essential ingredient for economic co-operation and trade between Afghanistan and its neighbors.
Mr.Brahimi extends his best wishes to all participants for success in your deliberations, and assures you of the commitment of the United Nations to support expanding peace, political stability and reconstruction in Afghanistan. These processes will create the conditions for private sector investment as well as for regeneration of the country’s productivity, export and trading capacity.
Internal and regional trade have always been vibrant elements of the Afghan economy, and there have always been strong ties of trade and commerce between the three countries. However, official imports and exports between Afghanistan and the two neighboring countries are a fraction of what they were twenty years ago, while unofficial trade has flourished, even under the harshest conditions. Thus with peace returning to Afghanistan, the opportunities are enormous for expansion of trade and exchange, if governments help to open the door through lowering trade tariffs and barriers. Already Afghanistan has the lowest tariff regime of the three countries.
Business opportunities, especially in contracting for rehabilitation and reconstruction of infrastructure, and for materials supply, are considerable. Infrastructure development is an assured market and investment capital is starting to come in from the international community. The Interim Administration of Afghanistan has clearly provided assurances that it and successor administrations will work with the private sector to create and encourage investment opportunities.
External private sector investment is necessary to generate indigenous private sector capacity through joint ventures and concessionary arrangements, while the country has a vast untapped wage labor pool through which much-needed resources must be injected into local communities, to regenerate the rural and agro-based economy in particular. And global trends also point to private sector management of infrastructure that used to be within the purview of the state – water, electricity and telecommunications, for example.
Mr. Chairman, may I comment on Afghanistan’s efforts to assure four key factors for creating a business-friendly environment which encourages private sector investment. These factors are personal security for investors, safety of investment, assurance of a return on investment, and human capital formation.
First, personal security is linked to the restoration of law and order, the rule of law and respect for human rights. The plans to establish a small professional national army and a disciplined police force are underway. I have already mentioned the discussions taking place in Geneva to seek international support for these necessary initiatives.