Brussels conference on Afghanistan with pledged aid of $15.2bn from International donors until 2020 was held

Brussels Conference on Afghanistan brought together 75 countries and 25 international organizations and agencies around the table; Participants endorsed the ambitious reform agenda presented by the Afghan government. They undertook to ensure continued international political and financial support for Afghanistan over the next four years.  As due commitment of Afghan Government to support the private sector, a major part of the conference on 4th October 2016 was dedicated to discuss the Regional Integration and prosperity through regional economic cooperation.

The regional integration and prosperity event discussed the significance of political support and economic integration at the regional level. The session was initiated by the European Union Commissioner for International Cooperation and Development, Neven Mimica, H.E Mohammad Ashraf Ghani, President of the Islamic Republic of Afghanistan, and representatives of international organizations as well as Mr. Atiqullah Nusrat had taken part and delivered their speeches as well.

Participants discussed on; how to gain a peaceful and prosperous Afghanistan through better support from the implementation of the economic projects with a regional impact; as well as, on how to promote regional trade and development by linking policy reforms, infrastructure and regional connectivity.

The Conference conducted a panel discussion, The Panelists; Mr. Atiqullah Nusrat, CEO of ACCI, Mr. Homayon Qayoumi, Chief Advisor to the President of I.R. of Afghanistan, Mr. Thomas Panella, Country Director of the Asian Development Bank, Robert Saum, Country Director of the world Bank Group discussed regional infrastructure and trade and transit issues from different perspectives and moderated by Arancha Gonzalez, Executive Director of ITC.

Mr. Atiqullah Nusrat talked over the Private Sector Perspectives on facilitation of Regional Trade and Transit and stated: “Afghanistan Chamber of Commerce and Industries believes that Regional Cooperation and Economic Integration can play a vital role in promoting stability and prosperity for Afghanistan and for its neighbors as well. Facilitation of regional trade and transit is especially important for our country, which has limited options for transit route, and it is often used as leverage towards political agenda.”

Furthermore, Mr. Nusrat added: “there are critical obstacles against a deeper regional integration, including outdated policies and regulations, poor infrastructure and weak regional business networks. To address this, we need to consider specific domestic and regional measures. For instance, Afghanistan needs to develop its missing trade and transit infrastructure to regain its position as a major transit hub. Meanwhile, other countries in the region need to cooperate in designing and applying regional transit agreements, which will help our region toward better integration.”

The CEO acknowledged that Afghan Government’s level of interest and engagement with the private sector over the past year to promote regional trade and transit has been unprecedented. He referred to the direct support of H.E. Mohammad Ashraf Ghani, President and H.E. Dr. Abdullah Abdullah, CEO of Islamic Republic of Afghanistan to prioritize the implementation of the private sector reform priorities and added: “a new public-private dialog mechanism has taken shape where the private sector and the government work together to implement the Private Sector Reform Priorities, including those that emphasize on facilitation of regional trade and transit.”

Mr. Nusrat reflected the positive trend of the private sector towards the goal of regional integration and indicated the prioritized following measures by the private sector have taken place:

  1. The WTO accession process is complete and the relevant laws and regulations were amended as required.
  2. Afghanistan has already started implementing the TIR system. This, when fully implemented, would over time harmonize the administrative formalities of road transportation and make trade and transit more cost-effective.
  3. The Afghan government approved a mechanism on easy visa facilitation for foreign investors and businesspeople, which includes issuance of visa on arrival and long-term multiple visas.
  4. An alternative dispute resolution mechanism (Afghanistan Commercial Dispute Resolution Center) is established in Kabul, which follows the international best practices in providing mediation, arbitration and legal services to businesses.
  5. An Open Access Policy to build and operate fiber optics and broadband Internet has been approved. This allows transferring data efficiently in the region and generate up to $500 million in direct investment by the private sector over several years.
  6. Last but not least, the first cargo train carrying 84 containers that left eastern China via Kazakhstan and Uzbekistan arrived in Afghanistan within 12 days whereas the same cargo would take months via sea routes. The arrival of this train serves as a living example that not only regional trade and transit is possible but it also significantly reduces transportation cost and time.

Mr. Nusrat emphasized that there is strong political will in the Afghan Government and a huge appetite in the Private Sector to increase trade and transit.

He said that the Government of Afghanistan and Private Sector are committed to work together and get rid of the barriers which are still standing against the economic integration of the region. He pointed out some of the following barriers and said that there are still more works remained unimplemented to be done:

  1. Lack of visa issuance to Afghan businesses and truck drivers by many countries in the region limits developing business-to-business relations and promotion of trade exchange.
  2. Road pass requirement for cargo trucks is a huge hindrance towards easy flow of goods and the implementation of the TIR.
  3. Absence of standardized dry ports in Afghanistan. Dry ports are essential for cost-effective trade and transit and building economy of scale.
  4. Afghanistan still does not have a coherent trade policy to guide its trade and transit priorities and give the private sector investors the certainty they need.
  5. Above all, Afghanistan has limited trade and transit options and is almost fully dependent on a single route. Therefore, we strongly urge the Afghan government and its international partners to fully implement the Private Sector Reform Priority #11, which calls for establishing alternative transit routes through Central Asia by linking the roads and railways to the border points with Tajikistan, Turkmenistan and Iran in order to reduce cost of transportation for importing and exporting goods.

All and all, while appreciating European Union and Afghan Government for Co-hosting the productive event, Mr. Nusrat asked International and Regional Partners to Afghanistan to encourage regional integration by developing targeted enabling Environment Programs to address the existing barriers and promote a private sector-led regional trade and transit. Likewise, he asked the support of International and Regional Partners in improvement of institutional relationships between the Private Sectors of the region by establishment of joint chambers of commerce, maintaining better market linkages and increasing access to information on business opportunities.

The session of the panel was followed by open discussion; the participants discussed regional infrastructure, trade and transit cooperation.

The conference was then concluded by the closing statement of H.E Dr. Abdullah Abdullah Chief Executive of the Islamic Republic of Afghanistan and Naven Minica, European Commissioner for International Cooperation and Development.