U.S.-Afghan Business Matchmaking Conference

UNDER SECRETARY BURNS: I'm very honored to be with you today. I hope we have time for some dialogue. I'd be very happy to hear what's on your mind and to receive your advice and to answer any questions that you have.

I thought I'd just say a few words, first, about the perspective of President Bush and Secretary Rice concerning Afghanistan. And I bring you greetings from both of them, from President Bush and from Secretary Rice.

And I want to say that I feel that -- I'll bet that we have a strategic consensus between those of you in this room from Afghanistan and those of us from the United States. 

Because the vision of our administration here in Washington is that we wish to see an Afghanistan that is prosperous, that is open, that is stable, and that is also peaceful.

All of us who know a little bit about Afghan history know the tremendous sacrifice that the Afghan people have made over the last generation, with the Soviet occupation, with the internal divisions.
And now we understand that you have an opportunity ahead of you to produce a new future for yourselves. And you've got a lot of friends around the world, including in this country, who want to help you succeed.

I hope you feel that we are sincere in putting forward that assistance to you.  We do meet at a time when many people are questioning the stability of Afghanistan and the efficacy of the international effort, over the last five years, to help the Afghan people.

I believe, and our leadership here in Washington believes that the Afghan government and people will succeed in producing a better future.

Afghanistan deserves peace and it deserves prosperity and it deserves the help of Europe and of the Arab world and the Muslim world and of the United States of America. And I think there is reason to be optimistic, if I can say this to a room full of Afghans, too, about the future of your country.

Just five years ago, in 2001, if you looked at the World Bank indicators for poverty levels around the world, the World Bank would have said that Afghanistan was the fifth poorest country in the world.
Al Qaida, as is very well known, under Osama bin Laden, was literally a state within a state, in Afghanistan itself.  And yet, five years later, although Afghanistan is not fully peaceful and not fully prosperous, it is a very different country.  Afghanistan is taking steps to enter the World Trade Organization. It has averaged annual growth rates of around nine percent since 2003. It's actively engaged in trade with the rest of the world. And its economic development is on the rise.

The World Bank estimates that Afghanistan's gross domestic product has increased by $3 billion in the last three years alone. Five years ago, there was a very young Afghan government just learning to function. Now, under President Karzai, there's a stable national government for the first time in the modern history of the country. There have been successful presidential and parliamentary elections, as all of you know.

We believe that President Karzai and his cabinet and the minister are undertaking now very successful reforms to institute good governance, not just in Kabul but in the provinces and the local level as well.  This kind of change is heartening when we see it. But there's another change, and that's about education. Five years ago, 19 percent of the kids of Afghanistan, the children, were in school, and now 94 percent of the children of Afghanistan go to school on a regular basis. That's an enormous leap forward and a very positive one.

I think all of us understand that the fundamental basis of any society is education, educating young boys and educating young girls as well. There's been tremendous progress there in Afghanistan for the future. As I said, I'll be visiting Afghanistan soon. I was with President Bush in Kabul in March of this year when he visited President Karzai and met with the Afghan national leadership. And I can tell you that the commitment of the United States to your government, Mr. Minister, is very strong. We have delivered over $12 billion in assistance, economic and military and cultural, over the last five years.

We are a guest in your country, and we understand that. We will only stay as long as you wish us to, but we do believe that we have a commitment to you to help achieve certain reforms and to achieve greater security and peace. We continue to feel that responsibility very deeply.

Security has to be the primary concern of any government, at any level of government. While we've seen an increased number of attacks in the regions and some of the provincial cities and even in Kabul and Kandahar themselves over the past few months, we do not believe that these attacks pose a strategic threat to the central government.

But they do have an impact, because they prevent government from operating effectively at the provincial level -- in part, and perhaps even in substantial part, in Helmand and in Kandahar and Oruzgan Provinces where you've seen a vastly increased number of NATO troops take their positions over the last six months.

In part you're seeing some of these attacks because the NATO forces are engaging the Taliban and the Al Qaida forces and some of the other insurgent forces in that part of the country. There are now over 40,000 European and Middle Eastern and American troops in Afghanistan. The United States intends to maintain a very strong level of American forces, and we believe that the Taliban represents the past in Afghanistan. And, therefore, the Taliban's terrorist attacks on our soldiers and the Afghan national army cannot be sustained, and they must be pushed back, and they will be.
And we believe that NATO and the United States are making a difference in working with the Afghan police and the Afghan national army.  The Afghan national police now numbers over 30,000 people. The army of Afghanistan numbers over 40,000 people.  And in all instances, when our troops are in the eastern part of Afghanistan or the south, they are always working with the Afghan national army, and they are patrolling with the army and the police in joint operations. And that's the only effective way to maintain a successful international security presence in Afghanistan itself.

One of the most effective measures of building security we have found is not just through the use of military force, but it's through trying to provide for economic development; and, specifically in this case, road building.  Our top U.S. military commander in Afghanistan, General Karl Eikenberry, has explained it publicly by saying: Where the road ends, the Taliban begins.  And so there's been an enormous effort of the Afghan government to build that Ring Road in the country and to build other roads.

And you've seen from the United States -- and we've spent over a billion U.S. dollars on roads construction in Afghanistan in five years -- from Japan, from some of the Middle Eastern countries and European countries, a real emphasis to rebuild the infrastructure of the country, because that helps commerce and it helps the Afghan national army and police to sustain stability in the country itself.

The success of the Taliban would depend on ungoverned and unpaved areas where they can operate out of the sight of local authorities. Roads do change that security picture, as well as the economic picture on a fairly dramatic basis. There are so many villages in Afghanistan that still find themselves disconnected from either the regional authorities or certainly the central authorities in Kabul.

All of us understand that operating -- following Afghan leadership -- we need to do our part to rebuild that infrastructure.

In addition to security, we're very much focused, as is the Afghan government and parliament, on narcotics trafficking. President Karzai said earlier this year: We must destroy the poppy before the poppy destroys Afghanistan.  This year's opium crop, the poppy crop, was the largest in the recorded history of Afghanistan or any other country, according to the United Nations.

The opium poppy cultivation brings corruption. It weakens the Afghan government. It funds and fuels terrorist groups and insurgent groups, and the situation of narcotics in Afghanistan, if we listen to the Afghan government, as we do, is very troubling. And it is our responsibility as friends of Afghanistan to help it to deal with this very important threat.

We realize that there's no quick and easy way to end this poppy trade, but we are working with the government on a long-term strategy, all of us in the international community: first, to develop alternative economic employment for those Afghans who grow poppy; second, to launch an extensive public information campaign by the government to educate the Afghan populace about the evils of narcotics trafficking; third, to strengthen the ability of the government itself to interdict drug shipments; and, fourth, to eradicate the crop when possible; and, fifth, to reform the justice sector so that those people who are trafficking in narcotics illegally might be brought to justice.
All of these steps are important.

And I think we've found in countries as disparate as Colombia and Ecuador and Peru, as well as Afghanistan, that when there's a large, illegal narcotics trafficking ring in the country, you can't just attack it through one means alone.

You have to have a comprehensive strategy, as the Afghan government does and as the international government does, in supporting it.
Drug trafficking brings, of course, another scourge.

And that is the problem of corruption.

President Karzai has appointed a new attorney general. I think many of you know him, Dr. Abdul Jabbar Sabit. He's launched a very aggressive, and I must say very impressive, anti-corruption campaign. We support him. We stand by him.

We believe that prosecutors who are courageous, as courageous as he is, will work effectively in the provinces to support his effort. It's very important that corruption, which goes hand-in-hand with the drug trade, be dealt with in Afghanistan.

We've decided that infrastructure is important, that counternarcotics policies that are effective are important, and of course that corruption is also a very, very important issue itself. It's up to the Afghan government to make these decisions as a sovereign government as to how it wants to run its country and what kind of priorities it wants to place before the Afghan people.  It is up to us, as friends of Afghanistan, to help supply the necessary capital or infrastructural assistance to see that that job is done as well.

We're working on road construction. We're working to develop a safe and reliable power network. We're building northern and southern power grids with the Afghan government for Afghanistan as well as lines to import power from Tajikistan as well.

That's what we're doing in a nutshell on a government-to- government basis. I think most of us who have followed the developing world over the last 40-50 years in the era of decolonization, whether it's in Asia or Latin America or Africa or the Middle East, or your region, South Asia, understand it's not enough just for governments, even well meaning governments, like ours and the one in Kabul, to fuel modernity and reform and economic growth. There is a greater responsibility on the shoulders of the private sector, of the businesses indigenous to the country and in international business, to supply the job creation, the investment, the ingenuity, the technological transfer, all that must happen to fuel a country's economic growth.

While we look at billions of dollars from the World Bank and the IMF and United States Treasury to help finance the rejuvenation of Afghanistan, we really also look primarily to the private sector and to businesses to reconfirm what those public monies do and to build on them.  And that's where your role comes in. You need to be the driving force. The millions of Afghans who've returned to Afghanistan can be a central force in rejuvenating the country.

The remittances from Afghans who lives overseas, including in the United States of America, to Afghanistan, are very important.  And American business has a role to play as well. I know that Coca-Cola, one of our great corporations, decided at the end of last year to open a bottling plant outside of Kabul.

That was a major investment. That gave confidence, we hope, to the rest of the American business community, that Afghanistan is a country in which investments can succeed.

We know that Toyota Motors opened a repair and parts facility in Kabul last June. We hope there are other examples of this kind of investment in the year to come. It's also true that, for the business community to invest, Afghanistan needs to be an attractive place in which to invest.

And so, in addition to working on infrastructure and anti- corruption practices, in the regulatory climate, there has to be a level playing field established, a system of rules of law established, that make investment a comfortable proposition for Americans and for Europeans and for Arabs and others around the world who wish to invest in Afghanistan itself.

I know that in 2003 -- and I visited Kandahar and Kabul in that year -- it took about three months for an Afghan business to be able to start its operations because of all the regulations that have been imposed on it.  And I know that, in 2006, it now takes roughly seven days to open a business in Afghanistan. I hope they give some of you courage to take that step yourself.

One of the other things that we can do -- we in government -- to help those of you in the private sector is to try to give a little bit of stimulus in a very important area. When President Bush was in Kabul and Islamabad in the first week of March and I had the honor to be with him, he talked to President Karzai and President Musharraf about creating reconstruction opportunity zones on both sides of the Pakistan-Afghan border, zones where local people could make products that would then come into the United States at a greatly reduced tariff level.

We are going to be proposing to the United States Congress in the early part of 2007 the request for congressional approval of these reconstruction opportunity zones.  We have had great success with them before in the Middle East, in Egypt and in Jordan. We think this could be a stimulus in a very difficult region: the border region, where there's been so much trouble and so much violence on both sides of that border.

Whether it's in Baluchistan, in Waziristan, on the Pakistani side of the border, or whether it's on the Afghan side of the border, there's no question that young people need to be employed. And they need to have some hope for the future.

And we hope that by putting forward this proposal for reconstruction opportunity zones, that there will be a greatly enhanced prospect of job creation in Afghanistan itself.  This is the central message that I wanted to bring to you today. It is the message that our government is firmly committed to be a good friend to Afghanistan, to be involved, to invest our own public money in the country.

We hope all of you in the private sector will also elect that future. And we thank you for coming to this conference.  And let me just say what a brilliantly organized conference it has been. And we support what you're doing. I hope you'll let us know when we can help you as well. Mr. Minister, thank you very much for coming to the United States of America, for being with us. And I'm happy to receive your wisdom and advice if you have any for me, or to answer any questions, should you have them as well.

Thanks very much.
(APPLAUSE)

MODERATOR:  We will now open the floor for questions. The undersecretary does not have much time, so I would request your questions to be very short and to the point.
If we can have the microphone on the floor, please.

QUESTION: Thank you. You indicated Afghanistan and importing power from Tajikistan. Would it be very helpful if you could use the 1,500-megawatt power plant in (inaudible) and 750 megawatt (inaudible) to Afghanistan, 750 megawatt to Pakistan?  That's, I think, the way that you can help both economically as well as very beneficially for investors, too (inaudible).

UNDER SECRETARY BURNS:  Professor, thank you very much. Thank you very much for your suggestion. 

We have talked to the Tajik government about what it can do in addition to opening the bridges and opening the transportation routes, which it has done, into Afghanistan to see if power supply can also be part of the equation.

In a larger sense, one of our greater ambitions is to see, over the long term, infrastructural links develop between Kazakhstan and Uzbekistan and Tajikistan and Turkmenistan, into Afghanistan, Pakistan and India.

And we think that Afghanistan, being open to Indian investment and Pakistani investment, and also infrastructural development on a regional basis, is something that has to happen.
Now perhaps it was the tragic history of Afghanistan over the last 30 to 40 years that prevented that kind of natural evolution of infrastructural development from taking place. But it should happen now.
And given the fact that Turkmenistan Kazakhstan themselves have a great amount of capital to invest, given the fact that India is looking to be an investment partner with Afghanistan, as well as Pakistan, there should be a way to develop on a regional basis a much more effective and established infrastructure for the region. So Secretary Rice, for instance, in her trips to Central Asia, as well as South Asia, has been promoting this concept of oil and gas and electricity and road development that would link all of these countries in the future.

And that, to us, is -- over the long term -- a very promising venture for the Afghan people. And we hope it pays off for them. \

Thank you very much.

MODERATOR: Do we have any more questions? Someone from the delegation, from Afghanistan, has a question.

QUESTION: (SPEAKING IN DARI)

UNDER SECRETARY BURNS: I did understand the question, the translation. Thank you very much. I understand that a number of you did have problems in getting your visas, that they arrived at the very last moment, and that actually some people were not able to come.

I apologize for that, and I'm sorry that happened. I can assure you it was not any kind of negative intent on our part. But sometimes bureaucracies don't always work as efficiently as they should. We are very conscious of the fact that we need to have a streamlined visa processing operation and we'll strive to do that in the future.

I apologize that it didn't work out that way in this particular instance.

QUESTION: Mr. Secretary, thank you for coming. We appreciate you being here, and great comments. From any expert that we hear today, from the military to the economic sector to anybody, they are asking for more money for Afghanistan.

And is it possible for you to relay the message from us that the amount of money that is allocated for the development of Afghanistan is not enough? It's just, plain, not enough, compared to what has been allocated to Iraq.

Any news from your department -- especially since USAID is under the jurisdiction of the State Department -- is there any such program for Afghanistan in the near future?

UNDER SECRETARY BURNS: Thank you very much. Well, the American people have put forward over $12 billion in assistance to Afghanistan in the last five years. That's a lot of money.

If you look at our worldwide aid levels, with the exception of Iraq, which, of course, is a unique case, Afghanistan, after Iraq, is the largest recipient of American assistance. And that will continue.
The administration has to present a budget, every year, to the Congress. And the budget that we will be presenting, we'll be presenting, of course, a healthy assistance level for Afghanistan.

I shouldn't say how much because we haven't announced it yet. The president gets to announce the budget, not me. But I will say it will be quite substantial.

I don't agree that, somehow, the solution to the problems of Afghanistan is just more money. Money is part of it, but you have to see -- and we will have to see -- from the people of Afghanistan and from the government of Afghanistan, efforts to rebuild their country. Now, we know that's a very tough job, given the situation of fighting and of instability and of economic deprivation that has occurred in Afghanistan itself.

We have great sympathy for the roadblocks to reform. But, certainly, a reduction in the level of corruption, an increase in the level of trained police and military forces, the good functioning of government authorities at the central and provincial levels -- these are incalculably important factors in propelling a country forward to build its economy, to build a society, and to build prosperity and peace.

We very much respect the fact that Afghanistan should run its own affairs and that the Afghans themselves should decide what kind of future their country is going to have.

First and foremost, it's really up to the Afghan people to build their country. We can help, and we will help. And I expect very healthy levels of U.S. assistance to continue to Afghanistan in the economic and military spheres over the next few years. I know that will happen.

But I don't agree that just an infusion of more money is somehow the only answer to the problems of the country. The problems of the country can be solved by the people of the country.

And let me end on this -- and you've given me a good opportunity to end on this: I think as we look around the world and see so many difficulties, so many countries trying to emerge from poverty and from war and from injustice.

All of us who have been to Afghanistan -- and I will continue to go in the future as I have in the past -- have great admiration for what the Afghan people have done. You have taken back your country, those of you who are Afghan. You are rebuilding it. You're giving hope to the children of your country that they can become educated, that they can live in a better place.

I think there's a reason to be optimistic about the future of Afghanistan. We feel that way in Washington. And we will be your friend and be a constant source of support, knowing that the job of rebuilding the country is first and foremost an Afghan job.

Thank you for listening to me. Thank you for inviting me to be with you at your conference. I hope that all of you will find the success here at this conference that you want.

And let me say again that we are so honored to have the minister here with his delegation. We welcome them. And we look forward to many future delegations of the Afghan government coming to Washington. We look forward to seeing you, as well, Mr. Minister, in Kabul in just a few short months' time.

Thank you very much.