Bush, Karzai Address Terrorism, Reconstruction in Afghanistan Rebuilding Afghanistan (a State Dept./IIP webpage)

28 September 2006

(Tells university audience that Afghans are "an easy people to work with")

Washington -- "Afghanistan is a business place.  It is not [just] a place for politics," Afghan President Hamid Karzai told a Washington forum on business opportunities in his war-torn country.

Karzai made his comments at a September 26 forum sponsored by George Washington University and the Embassy of Afghanistan.  The U.S. Department of Commerce and the Afghan-American Chamber of Commerce also helped organize the event.

Even though security challenges continue four years after Afghanistan's Taliban regime was ousted by U.S.-led forces, Karzai said, "The city of Kabul is perfectly safe" and has hotels and a welcoming Information technology sector ready to help facilitate business transactions.

At the same time, he said his administration established a "one-stop shop" for investors that cuts bureaucratic delays to a minimum.  Basically, "we are an easy people to work with … [and] Afghanistan is a country where your investment will pay immediately," he added.

Karzai highlighted the continued need for foreign aid to help rebuild the country's infrastructure, particularly its roads and health and social systems, which have been devastated by years of civil conflict.  He told his audience, however: "We will never get rich from aid.  To grow [prosperous], Afghanistan needs to be in business."

U.S. Secretary of Commerce Carlos Gutierrez, also attending the forum, said Karzai had "captured the imagination of the world" because of the market-friendly policies his government implemented to attract foreign capital and investment.

"When I visited President Karzai during my trip to Afghanistan in February, I was incredibly impressed with his commitment to a strong market economy," Gutierrez said.

Noting that trade between the United States and Afghanistan has increased 200 percent over the past year, Gutierrez said there is "great potential down the road" for expanding Afghan exports to the U.S. market.

Turning to the Afghan president, Gutierrez said, "The U.S. is your long-term [trade] partner."

In 2005, foreign investment in Afghanistan rose 35 percent to more than $400 million.  The World Bank named Afghanistan its best investment choice for 2006 for good reason, Karzai told his audience.  "Private investment in Afghanistan has been $3 billion" over the past four years, he said, and is growing.

Coca-Cola recently opened a plant in the country that is doing well, he said.  In addition, several private air carriers have set up operations and "all are doing marvelous business."

The telecommunications sector, especially the mobile phone business, is growing quickly, he said.  Licenses for cell phone companies that sold for $3 million or $4 million a few years ago now are going for $30 million and $40 million because later competitors saw the profits made by earlier investors and are keen to enter the Afghan market.

Karzai confirmed that rugs, nuts and fruits, and marble also had been targeted as prime export items by his government.  Exports of marble to the United States surpassed the $1 million mark in 2005 and are growing, he added.

The rug Karzai stood on as he delivered address was furnished by Zamani Gallery and Antiques, a Washington-area Afghan company that deals in imported Afghan rugs and artifacts.  The owner, Temur Zamani, told the Washington File that the roughly 2.59-meter by 3.35-meter "Afghan Kazakh" rug was worth between $3,500 and $4,500.

Imported rugs, mainly from the Mazar and Kunduz regions of Afghanistan, were doing a brisk trade in United States, Zamani said, adding that he was considering opening a branch of the family-owned and -operated business in California.

In response to a question, Karzai said the Afghan diaspora is playing a big role in the economic resurgence of his country.  "Many of them fled the Taliban and are now returning with their capital to reinvest in the country," he said.

The Bush administration remains committed to Afghanistan’s reconstruction effort. That includes building stable government institutions, fighting terrorism by strengthening law enforcement, eradicating opium poppy cultivation and making education available to all Afghans.

Securing peace in Afghanistan is essential to attract investment, as is adequate public infrastructure. During President Karzai’s visit to Washington, President Bush reiterated that the United States would continue to help Afghanistan achieve these goals. (See related article.)

For information on U.S. policy, see Rebuilding Afghanistan.