Establishing Afghanistan as Trade Hub to Improve Regional Economy
By MacKenzie C. Babb
Staff Writer
Washington - Establishing Afghanistan as a regional crossroads in a new network of economic and trade connections will allow the country to take ownership of its economic future, providing a more stable financial outlook for Afghans, their neighbors and international partners.
"The basis of the New Silk Road vision is that if Afghanistan is firmly embedded in the economic life of the region, it will be better able to attract new investment, benefit from its resource potential and provide increasing economic opportunity and hope for its people," Under Secretary of State for Economic, Energy and Agricultural Affairs Robert Hormats said September 29.
Hormats spoke in Washington about the New Silk Road initiative, a plan named for the ancient trade route and designed to bolster connections across South and Central Asia. He was joined via videoconference by Sham Bathija, senior economic adviser to Afghan President Hamid Karzai.
"Afghanistan finds itself at a historical crossroads today," Bathija said. "Either it continues to depend on foreign aid as the principal driver of economic development, as well as foreign forces to safeguard its security, or it quickly shifts to a new model of development rooted in the private sector as the main generator of jobs and wealth and the Afghan National Security Forces as the chief guard of our national and personal security."
Bathija said that to make this transition, Afghanistan will need to remove unnecessary barriers to trade and transit while working closely with its neighbors to overcome shared economic challenges.
Juan Miranda, director-general of the Central and West Asia Department at the Asia Development Bank, also stressed the importance of regional collaboration. He said that because much of the region is landlocked, building connectivity on land offers South and Central Asia the chance to build a better economic future.
Hormats said the initiative offers a "critical economic boost" to Afghanistan and all of its neighbors, which Secretary of State Hillary Rodham Clinton highlighted when she co-chaired the New Silk Road Ministerial on September 22. The meeting brought together 30 foreign ministers, regional leaders and international partners to discuss the next steps in building the trade network.
The undersecretary said the region will need to upgrade facilities at border crossings, remove bureaucratic barriers and other impediments to the free flow of goods and people, and eliminate outdated trade policies.
Taking these steps will "reinforce political efforts to promote regional stability," making the area more attractive to private investors, Hormats said. "Opportunities for profit potential are plentiful" in South and Central Asia across a variety of sectors, particularly in agriculture, light manufacturing and infrastructure.
He said the region as a whole must focus on "setting the broad context for sustainable growth, because they all have an economic as well as a security incentive in doing so."
Like Hormats, Bathija emphasized the importance of building up Afghanistan's economic stability as the country takes full control of its own security from international forces by the end of 2014.
"For my country, the region and the world to be secure, we must implement the vision of the New Silk Road initiative," Bathija said, calling the plan "the way forward" for improving the livelihoods of people across South and Central Asia.
Hormats highlighted the positive role of economic opportunity in creating the prospect of lasting stability and security, and called on the international community to continue to find ways to support growth and development across the region.
The undersecretary also emphasized the "essential role" of private investment in building the New Silk Road, as well as the critical value the initiative places on women's participation. He said that in today's world, it is impossible to build modern financial systems in countries that exclude half of their citizens.
The regional leaders are scheduled to meet again with Clinton and other international partners to discuss progress on the initiative in Istanbul in November, followed by a December summit in Bonn, Germany.
(This is a product of the Bureau of International Information Programs, U.S. Department of State.)
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