|Kabul: 11:05 AM      |
Welcome to Kabul:Reconstructions. You can follow the information below, which has been gathered from a
number of sources by a number of participants (click on the names at left for bios), to reconstruct your
own picture of events in Kabul since this site was launched on March 8th, 2003 and, in a sense, since the
reconstruction of Afghanistan began somewhere in the winter of 2001-02.
Some of this information has been provided in response to specific questions submitted by visitors like you. Please note that this section of the project is now maintained as an archive and has not been updated since 2005. Click here to ASK A QUESTION.
Arian Mouj Sharifi
Afghan Chamber of Commerce October Newsletter
Afghanistan allowing foreign banks to open - Kabul hopes to lure expatriate wealth KABUL President Hamid Karzai has approved a law allowing foreign banks to set up in Afghanistan, a move designed to persuade Afghans to bring back billions of dollars from abroad to aid the country's reconstruction after 20 years of war. Officials said three banks would get operating licenses Thursday: Standard Chartered of Britain, the National Bank of Pakistan and a microcredit bank supported by the Aga Khan Foundation. "Afghans are rich people, but their money is all in other countries," Karzai said after signing the law Tuesday. "I want them to bring their money to Afghanistan." Standard Chartered is set to become the first international bank to open in the war-ravaged country, where most large transactions involve suitcases full of cash. Strong in developing countries across Asia, Africa and the Middle East, the bank plans to open a branch in Kabul as soon as possible to handle transactions for import-export companies and the burgeoning international community, said John Jones, the bank's project director in Kabul. The bank will introduce automatic teller machines and may eventually open branches in other major cities. "We're delighted the laws have been passed," Jones said. "We've never operated here before and will need to feel our way." Afghanistan's banking system collapsed along with its Communist government in 1992, when the Islamic mujahedeen captured Kabul. Afghans scrambled to move their money abroad, often to Pakistan, as the country headed into a decade of civil war. The governor of the central bank, Anwar ul-Haq Ahady, said the government would like to privatize the six banks operating in the country, all of which are state-owned, but acknowledged that they were poorly capitalized and that there had been few offers. "Restructuring looks more plausible," he said. Most Afghans transfer money using hawala, a system in which funds are sent through individual money traders in one country to their counterparts in another. Finance Minister Ashraf Ghani said that wealthy Afghans, including businessmen now living in Dubai and Moscow who hold as much as $5 billion abroad, had been pressing for the banking changes. "We'll do everything we can to enable the return of these Afghanis," he said. Karzai also passed a law to give complete independence to the country's central bank, which is charged with keeping a lid on inflation and protecting the value of the national currency, the afghani. UN SC seeks expansion of role of international effort in Afghanistan, to extend beyond Kabul - Resolution 1510 (2003) adopted Resolution 1510 (2003), adopted unanimously, urges measures to fulfil mandate of force; situation said to remain threat to peace and security The Security Council this afternoon authorized expansion of the International Security Assistance Force (ISAF) in Afghanistan to allow for maintenance of security outside the capital, Kabul, for international personnel engaged in reconstruction and humanitarian efforts. Determining that the situation in Afghanistan still constituted a threat to international peace and security, the Council unanimously adopted resolution 1510 (2003) and, acting under Chapter VII of the United Nations Charter, authorized the Member States participating in the security assistance force to take all necessary measures to fulfil its mandate. That mandate (which was to expire on 20 December) was also extended for a period of 12 months. The ISAF was initially authorized to provide security in Kabul in resolution 1386 (2001) for a period of six months starting on 20 December 2001. That authorization has been extended regularly. The same resolution also endorsed the Agreement on provisional arrangements in Afghanistan pending the re-establishment of permanent government institutions, signed in Bonn, Germany, by parties concerned on 5 December 2001, the so called "Bonn Agreement". That Agreement provided for progressive expansion of the ISAF to other urban centres and other areas beyond Kabul. According to a letter dated 2 October 2003 from the Secretary-General of the North Atlantic Treaty Organization (NATO), Lord Robertson of Port Ellen, to the Secretary-General of the United Nations, conveyed to the Council in document S/2003/970, NATO had assumed strategic command, control and coordination of the ISAF on 11 August. Annexed to the letter was NATO's longer-term strategy for its ISAF role in Afghanistan, and a letter of 6 October, in which the NATO Secretary-General informed the Secretary-General of the United Nations that the North Atlantic Council had approved a set of preliminary decisions related to a possible expansion of NATO's ISAF mission. In a letter to the Secretary-General of 10 October (document S/2003/986), the representative of Afghanistan wrote that, notwithstanding the considerable progress made in providing security in Kabul and surrounding areas, thanks to ISAF, the security situation in various parts of the country remained relatively unstable and impeded further progress in reconstruction and development. His Government, therefore, requested the Council to consider expanding the mandate of ISAF in Afghanistan, in full coordination with the Afghan authorities in Kabul. After the vote, the representative of France said his country would continue its commitment to Afghanistan through its participation in ISAF, in the counter-terrorism efforts of operation Enduring Freedom and through assistance in training a new Afghan army. He emphasized that the expansion just adopted did not envision efforts outside of its mandate in Kabul and was focused on the protection of civilian personnel, especially those on reconstruction teams. It was important that the Government of Afghanistan itself be empowered to take care of security throughout the whole of its territory. Making a financial killing in Kabul -Afghanistan is facing another invasion - this time by a formidable army of western builders, engineers and architects. Al-Qaeda's mountain hideouts, their businesses are eyeing the choicest reconstruction deals. Billions of pounds in transport, power, agriculture and construction projects are up for grabs. And the UK is trying to stake its claim, with the Department of Trade and Industry launching a special website this month 'to signpost opportunities for British companies'. UK plc has been in Kabul since last November, in the shape of development experts Crown Agents. The Surrey-based company, originally set up to advise countries of the British Empire making the transition to independence, is disbursing £260 million in aid committed by Britain. The word is that Afghanistan's transitional government is impressed. The World Bank may soon hire Crown Agents to advise it on the best ways to address the country's humanitarian needs. But the big money is in building, digging and drilling, which will begin in earnest over the next 12 months. Civil engineering firm Fitzpatrick Contractors has worked in nearby Kazakhstan and is one of a number of British companies keen to get into Afghanistan first. 'We have already started a dialogue with the mayor of Kabul on hospital facilities that will be needed in the city, and begun preparing outline designs,' says Bernard Woodman, managing director of Fitzpatrick's international division. Construction giant WS Atkins, which built temporary housing for refugees and the military in Kosovo, is also interested. A spokesman said: 'We will look closely at tenders in Afghanistan. Its infrastructure has been decimated and the other leading consultancies will also be looking.' After 25 years of conflict, Afghanistan needs rebuilding almost from scratch. Half of its urban housing has been destroyed, and one-third of a population of 28 million people displaced. Only one Afghan in 10 has access to sanitation, and the country has just 3,000 kilometres of road, of which 1,700km needs rebuilding. It also has the world's lowest electricity consumption, and telephones are virtually unknown. The United Nations is devising a programme of reconstruction that will swallow an estimated $10 billion by 2006. Billions more is likely to come in ad hoc funding from individual governments and even the private sector, said the business development director of another major contractor, who declined to be named. 'There is an enormous determination on the part of the US, Japan and European countries to see proper stability restored to Afghanistan. They don't want to see the same delays over funding which held up so many big infranstructure projects in Bosnia and Kosovo. Projects like that can't always rely on UN money alone, which tends to come in fits and starts.' He added: 'In business terms, to get reconstruction contracts like these usually counts as a result. It doesn't always carry a high profit margin but it's good for turnover and it's long term. It doesn't hurt your international profile either, and certainly helps develop relationships with governments.' So far, international aid efforts have focused on refugee housing, schools and paying civil servants' wages, and the UN has declared that establishing sound political institutions and a legal sys tem are priorities. According to the DTI, it is still too early to send an industry taskforce of the kind that visited the Balkans in the aftermath of the Kosovo war, winning long-term reconstruction contracts. Even so, British industry is anxious not to be caught out as it was after the Gulf War, when UK lack of preparation led to the most lucrative contracts going to US rivals. DTI officials had their first meeting with industry figures in Afghanistan in February. And Trade Partners, an offshoot of the department responsible for promoting Britain's exports, is advising companies via its website (www.tradepartners.gov.uk/afghanistan). Colin Adams, chief executive of the British Consultants and Construction Bureau, says UK firms have extensive knowledge of the region. Over 80 of them are, he points out, active in neighbouring Pakistan. 'For example, Halcrow, a British engineering company, employs 60 people in Quetta. And Binnie Black & Veatch helped build Kabul's water supply in the days before the Taliban.' Another contender from Britain is Laing, which has built airports in Uzbekistan and Kazakhstan and may have designs on Kabul's bullet-scarred airport. Others include Mott McDonald, which has worked on power stations in Lahore, Karachi and Islamabad; farming consultancy Agrisystems; and International Waste Management, a Scottish firm prominent in restoring sanitation in post-war Yugoslavia. Adams is critical of a recent decision by International Development Secretary Clare Short to drop the UK's old insistence that aid contracts funded by Britain be awarded to British firms. 'It may seem fair in principle,' he says, 'but most other countries have not done the same yet. And that puts British companies at a competitive disadvantage.' The United Nations Development Programme, which will co-ordinate most of the international relief effort, is pressing donor countries not to insist on tied-aid packages. If they comply, says Adams, British firms will win a handsome share of the reconstruction work: 'UK contractors pick up 40 per cent of work funded by the European Bank for Reconstruction and Development. As for the Asian Development Bank, the UK holds just a 3 per cent stake, but we win 15 per cent of the work - second only to the Americans. 'On that basis, and given the number of British contractors that know the region and have experience of working there, I expect they will carry out at least 15 per cent of all reconstruction work. Afghanistan Revives Telecommunications and Postal Services Washington, October 7, 2003 With an average of only two telephones per 1,000 people, among the lowest coverage in the world, Afghanistan has taken a major step to increase access and improve telecommunications services with the support of a US$22 million credit approved today by the World Bank's International Development Association. The majority of Ministries in Kabul, along with most provincial capitals, have extremely limited access to telecommunications and the internet. Postal services are also recovering from years of conflict. While there is a post office in every district, the majority are dilapidated and lack even such basic equipment as scales and franking machines. The World Bank financing will support an Emergency Telecommunications Project which will assist in developing a government communications network linking ministries in Kabul with the provinces. It will also encourage the growth of private competition among telecommunications networks and services. "We need to modernize and quickly expand telecommunications networks and services throughout the country to reconnect people and develop our social and economic system," said Eng. Mohammad Masoom Stanakzai, Afghanistan telecommunications Minister. "To achieve this, we recognize the importance of creating the right conditions for open competition and private sector investment in delivering these services." The government network, combined with the growth of telecommunications access, is also expected to support the delivery of public services and improve governance through faster information flow regarding government activities at both the provincial and national level. The credit will also support capacity building and purchase of basic equipment for post offices. "It is urgent for the government to be able to communicate both internally and with its many development partners. We believe this project will play a major role in building that capacity ," said Charles J. Kenny, a World Bank Telecommunications Specialist and Project Task Leader. "The government has also shown its commitment to building a vibrant, competitive telecommunications sector that provides widespread access to affordable services. The assistance provided by the World Bank under this project should help it to reach that goal." The new financing builds upon assistance the World Bank and other donors have already provided to the communications sector in Afghanistan. Existing World Bank grants have supported the licensing of two mobile telephone operators and movement toward the creation of a telecom law and regulatory institutions. In May 2003, the Afghanistan Reconstruction Trust Fund (ARTF), administered by the World Bank, provided US$3 million in grants to support the rehabilitation of a satellite earth station in Kabul, repair of a microwave link to neighboring countries, as well as installation of a basic billing system. This project will allow for greatly improved international connectivity supporting the flow of voice and data traffic between Afghanistan and the rest of the world. The installation of a billing system will ensure sustainability of the services while raising much needed funds for further network expansion. The Emergency Communications Project will provide investment and technical assistance resources to the Ministry of Telecommunications. It will help it address inter-government communications needs through developing a government intranet; supporting basic postal services; strengthening government institutions; and fostering the growth of private sector-led telecommunication services. The project will be implemented over a period of four years by the Ministry of Telecommunications. The IDA credit for the Emergency Communications Project carries no interest, a 0.75 percent service charge, and has a 40-year maturity, with a 10-year grace period. . FINANCIAL STATUS AS OF OCTOBER 1, 2003 At the March 2003 Strategic Development Forum for Afghanistan, the Afghan government presented its budget projections for the new Afghan fiscal year (SY1382), and requested donors to make contributions to ARTF to allow disbursements of US$250 million for the recurrent costs component and US$350 million for new commitments under the investment component (including law and order projects) and the expatriate Afghan component, for a total of US$600 million to be committed in support of the SY1382 Afghan budget during SY1382 . This request was repeated at the September 2003 meeting of Afghanistan donors in Dubai. A second scenario assumes similar disbursements for the recurrent cost component, and assumes tha t the ARTF would only honor donor preferences with respect to the amount to be committed for investment projects. This scenario assumes that new commitments of US$60 million would be made for investment projects, in line with preferences stated explicitly by donors combined with the assumption that donors who have not stated preferences on average expect that at least 15 percent of their contributions would be used for investment projects. In this second scenario, the ARTF would make total commitments of approximately US$330 million in support of the SY1382 Afghan budget). Paid- in contributions available for commitments, carried over from end-March 2003, amounted to US$6.606 million . Between April 1 and September 1, 2003, donors paid-in an additional US$176.019 million equivalent. Expected additional contributions pledged for SY1382 amount to US$95.934 million equivalent. Based on existing pledges, the amount of funds expected to be available for commitments during SY1382 is US$271.953 million. compares this amount with projected commitments based the government request, while A compares the same amount (US$271.953 million) with projected commitments based on donor preferences. A shortfall of approximately US$322 million is anticipated if ARTF is to meet the government request, and of approximately US$53 million if ARTF is to limit its new commitments to donor preferences already stated. Under a third scenario (low case: ARTF would only fund the recurrent cost component and investment projects that have already been approved), the ARTF would approximately break even (see Current projections suggest that the ARTF should have sufficient liquidity through November 2003. However, starting in December 2003, the ARTF is expected to face cash constraints and may not be able to continue to fund recurrent costs as projected or may not be in a position to make commitments for new investment projects. 1.6 In conclusion, if the ARTF is to meet the request made by the government in March 2003, additional pledges of US$322 million are required. At a minimum, additional pledges of US$53 million are required in order for the ARTF to meet donor preferences with respect to the amount to be committed for investment projects.
Posted By: mariam   November 3rd 2003, 2003 10:50 AM
Kabul: Partial Reconstructions is an installation
and public dialogue project that explores the multiple meanings and resonances of
the idea of reconstruction -- as both process and metaphor -- in the context of present-day Kabul.
www.kabul-reconstructions.net is an online discussion forum, information resource, and medium for the communication of questions and answers about the reconstruction between people inside and outside the city of Kabul itself.