As Prepared
Thank you very much for your kind words of introduction. It’s a great pleasure to see so many friends when I look around this room – some I haven’t seen for awhile and some I have seen very recently but nonetheless, it’s a great honor to be with you. And I particularly want to welcome those who have come all the way from Afghanistan to be here. I very much appreciate your presence today. I’m grateful also for the opportunity to address a subject that should be the focus of more of attention – findings ways for Afghans and Americans to work together to propel Afghanistan forward economically based on the engine of private enterprise and mutual benefit.
Aid is of course necessary for Afghanistan to succeed, but aid is not the answer for Afghanistan’s future. The real answer is creating self-sustaining, profitable enterprises that lay the foundation for robust economic sectors capable of succeeding in world markets. I congratulate the project organizers, as well as everyone who is participating in this room, for focusing on the right target.
In my experience as U.S. ambassador in Afghanistan, hardly a week passed when I did not have a conversation with an Afghan entrepreneur who was ready to put his own money toward an economic venture but who needed either additional funding or joint venture partners or assistance in overcoming bureaucratic obstacles in Kabul. I know some you are sitting around the table – those who had those conversations with me. Although I worked to create a small enterprise fund-like program, we as a government generally did not have ways to engage adequately in my view to match up entrepreneurs with the needed resources and partnerships.
And our record in overcome bureaucratic obstacles was mixed.
Let me now turn to the situation in Afghanistan today. I have always seen our effort in Afghanistan as a partnership – one between the Afghan people who seek a normal life and progress for their country and the American people who want to vindicate our common efforts against the Soviets in the 1980s and al Qaeda after the 9/11 attack by helping Afghanistan stand on its own feet. I would like to take stock of this partnership today, the progress and the challenges, and to offer some thoughts about the way ahead.
First of all, we should be candid in recognizing that the current situation in Afghanistan is a mixed picture.
On the positive side, Afghanistan for the first time in its long history has a government established through free and fair elections. Its economy is growing at an impressive rate, 12 to 14 percent per year – the highest rate in South Asia. It has a Central Bank with 30 regional branches and as we saw on this previous panel the country has a number of private banks as well today and it has a stable currency.
More than 80 percent of the population of Afghanistan now has access to primary medical care and 70 percent has been inoculated against polio. Millions of Afghans have access to wireless telephones and there many radio and TV stations around the country. More than 6 million Afghan children, including 2 million girls, are going to school – the highest number in Afghanistan’s history. More than 4,000 kilometers of roads have been paved, with another 1,000 kilometers scheduled for completion this year. The ranks of the Afghan National Army now number at more than 40,000.
Culture and even fun are returning. I was very happy to hear that recently a group of Afghans organized a major popular music festival in Kabul. There also have been marathon races, more and more sports teams, and even independent films. These are all indications that Afghans are succeeding in the effort to make Afghanistan a normal country and to set the stage for further progress.
However, we also need to be frank with ourselves about the negative trends we face.
First, at the national level, there is too much polarization among Afghanistan’s political leaders.
Second, security in the south and east – but particularly in the south – has been deteriorating. Despite the efforts of the Afghan government and NATO, the escalation of enemy attacks in 2005, 2006, and 2007 has made much more of the countryside insecure, leading to a reduction of reconstruction and economic development activity in some of those areas. Since today is Veterans Day, I want to take a moment to honor those who have lost their lives in the cause of Afghanistan, both military and civilian, both Afghan and from Coalition and ISAF countries. I want to especially remember those who died in the recent tragedy in Baghlan. Members of parliament, local officials, average citizens, and school children were brutally killed. I send my condolences to the families of those killed. Let us honor them by ensuring Afghanistan’s success.
Turning to the third issue, which is related to security, because of changes in relations between the world and Iran over a number of issues and because of recent domestic difficulties in Pakistan, the regional context for Afghanistan has become more challenging.
Fourth, there is a serious problem of governance in Afghanistan. At the national level, corruption exists at unacceptable levels. At the provincial and district levels, particularly in contested areas, government, particularly police, too often is weak, ineffective, sometimes nonexistent, and sometimes even predatory.
Fifth, the illegal opium economy is growing. In 2007, the poppy crop reached record levels, exceeding production in 2006 by 42 percent. The United Nations estimates that next year’s crop could rise still further. There is also too high a level of unemployment in the country and the pace of reconstruction is not what it ought to be.
These are all difficult problems. However, I have seen how much Afghans, Americans, and other friends of Afghanistan can achieve if they have the commitment, the right strategy, plans and the resources, including human resources. These problems can be overcome.
My second point is that the Afghan government, with the support of its friends in the international community, needs to take stronger actions to counter or reverse these negative trends.
To address these challenges, the first responsibility lies with President Karzai, key ministers, as well as other Afghan leaders.
With respect to the problem of political polarization, Afghan leaders must unite behind the national interest. There is nothing wrong with debating differing perspectives or with political competition, provided that this takes place within a framework of national unity that serves the nation’s interests and does not harm Afghanistan’s long-term interests. Leaders should be concerned about all Afghans equally, regardless of their ethnic or sectarian background, and should reject the approach of seeking to divide Afghans because of ethnic and sectarian issues. It is imperative for Afghan leaders to return to the approach of productive cooperation.
Also, the Afghan government needs to be reformed in terms of people and program of work. Key reforms must include: making appointments based on merit, countering corruption, implementing programs for institutionalizing the rule of law, and working systematically to extend state authority and good governance to provincial and district levels. President Karzai has committed himself to these objectives. He has promised to direct his government to advance these goals. We look forward to seeing the concrete steps that are needed to realizing this vision and now.
With respect to these issues, the Afghan people have been – and continue to be in my judgment – far ahead of the government. I know from my own experience based on conversations with Afghans from every region and segment of society. They want to become a successful democratic country and part of the world community.
Third, friends of Afghanistan in the international community should work with regional powers need to restore the spirit of Bonn, a more positive regional environment.
At the Bonn Conference and during much of the Bonn Process, regional powers appeared to understand that a strong and stable Afghanistan – one not dominated by any regional power – was a preferred outcome to the deadly and destabilizing regional competition that took place in Afghanistan in the 1990s.
The Afghan government and the international community need to develop approaches with regional powers to re-establish the spirit of Bonn. From the international community, this will require supportive postures toward efforts to improve relations among neighbors based on non-interference and Afghanistan’s success in ending support for sanctuaries for extremists and terrorists and joining forces to fight extremists and terrorists.
Fourth, to support Afghanistan’s internal development and improve the regional context for stabilizing Afghanistan, the international community must strengthen commitment and make it sustained in the long term.
The stakes for the international community are enormous in Afghanistan. The success of Afghanistan is crucial for the wider effort to stabilize and create progress in the broader Middle East. Afghanistan is central to the effort to overcome extremism and defeating terror. It is a test of the ability of NATO to prevail in a key theater in the defining challenge of our time.
Thus, it’s imperative that the friends of Afghanistan strengthen their commitment – both in political statements and in resources – to helping Afghans for as long as it takes for their country to succeed. I know this is what the United States is doing.
The need for an overall international commitment, long term commitment for Afghanistan, is clear. Some regional powers, and some spoilers or factions inside Afghanistan, are uncertain whether the international community will stay the course. As a result, they are hedging – taking steps that preserve options in the event of a withdrawal that make our current problems much worse.
The international commitment must be strengthened in support of a sound strategy and must incentivize the Afghan government to do the right things internally. It should be a commitment to a partnership – one in which we and the Afghan government jointly define the problems before us and develop agreed solutions, and one that’s based on developing Afghan capacities to manage their own affairs, with the international community increasingly moving to a supporting role.
The international community should recognize that such a commitment makes it easier for the Afghan government to undertake difficult reforms, and Afghan leaders must recognize that undertaking reforms makes it more likely that advocates of greater assistance and long term commitment will succeed.
My fifth point relates more directly to the subject of this conference: the crucial role of the private sector in enabling Afghanistan to succeed.
I know there is a role for government in facilitating conditions for the private sector to work -- in terms of the establishment of security, rule of law, procedures for businesses to be able to operate. There’s also a role for the international community in terms of security assistance that they provide and in terms of the infrastructure assistance that they are providing.
There’s also the program of “Afghanistan First” which encourages the military to purchase some goods and services from Afghan companies. Those of you who know the history of East Asia after World War II will remember that a number of very famous current companies in Japan and Korea were established to provide services and goods for U.S. military forces after World War II. I salute the establishment of this program “Afghanistan First” and would like frequent review of that program to expand it, to enlarge it and I hope that the Afghan businessmen present here will take advantage of it by engaging with our officials in the Department of Defense and other agencies on how this program could be expanded for standards that are needed and security measures that are needed to make sure that the goods that are being promised or provided meet those standards.
The conference here today has the right approach in my view: identifying specific business opportunities in the most promising economic sectors. There is great opportunity in the mineral, building materials, construction, transit, agriculture, and other sectors in Afghanistan.
The progress that has been made in the telecommunications sector shows what can be done. The Afghan government led a reasonable process to give licenses for mobile phone companies, and the result is three thriving companies serving 3.5 million customers. We have seen that also in the banking sector and the establishment of a few airlines. And even though opium production gets all the headlines, the fact is that the vast majority of farmers make their money on legal crops.
A private-sector approach can also help solve the pressing problem of unemployment. Working together through this conference and others, the private sector and the United States and other friends of Afghanistan should develop specific goals and programs to produce millions of jobs, both by catalyzing growth in key sectors and by vastly expanding micro-credit and creating
enterprise funds to support small- and medium-size ventures. The opportunities are there. Together, we should seize them.
It’s good to make a profit – and only if ventures are profitable can they be self sustaining – but the private sector can also be a greater force for progress. And this is what I want to say a few words about.
First, businesses can and should live the ethic of civil responsibility. One of the reasons for America’s success lies in the way businesses invest in the community in which they operate – in the schools, in the civic organizations, and community activities that make up our social fabric. Business in Afghanistan should follow this model and I know a number of you are.
Second, the private sector should press the government for reforms to fight corruption and to build the rule of law. In the developing world – and even in many developed countries – some businesses opt to pursue short-term gains through corruption. They pay bribes, avoid laws, cheat on standards, and evade taxes. Of course, I don’t think anyone in this room has done any of this. Seriously, I understand the difficulties you face day to day doing business in Afghanistan. But ultimately, accepting corruption as an inevitable fact of life is a recipe for failure. The right course is for business leaders to organize themselves into an interest group for reform.
Third – and this is counterintuitive – the private sector should cooperate with the Afghan government to pay a fair share of income taxes. When a government depends on tax revenues – both from individuals and businesses – it’s more likely to listen to the voice of the society.
During the American Revolution, one of great slogans was that there should be “no taxation without representation.” However, from the history of democratic governments, one key lesson is also that without taxation it is less likely that there will be representation.
It is therefore in the interest of the leaders of the private sector to cooperate in a system of fair and reasonable taxation. This will not only enable the government to provide important infrastructure and services. It will also give you a political voice.
In closing, I will just say that Afghanistan can be one of the great success stories of this century.
In the middle of the twentieth century, there was a country that was considered a hopeless case and was worse that what you hear about Afghanistan today. The World Bank assessed that it had no prospects for development. It was deeply dependent on American aid and had suffered devastating destruction during foreign occupation and war. No one expected that it would succeed or that it could succeed. But that country – South Korea – became an Asian tiger within twenty-five years and is now one of the world’s leading economies.
The lesson is that the right policies and programs, properly resourced, can be transformative. It is that lesson that we should keep always in mind as we work toward Afghanistan’s success.
Let me say word to the people of Afghanistan today. I understand the challenges you face. There is cause for concern. However, I urge you not to lose hope. Afghanistan has already come a long way. There are solutions to the problems we face. If we work together in the right way, we can regain the momentum.
Thank you very much. May God bless the peoples of Afghanistan and the USA.
|
