Remarks by Assistant Administrator for Economic Growth, Agriculture, and Trade Eric Postel at the AACC Business Match-Making Conference

Tuesday, November 15, 2011
Subject 
Afghan-American Chamber of Commerce Business Match-Making Conference

Good Morning. Thank you Congressman Ritter for inviting me to participate in the conference. I would also like to congratulate Farid and the I Group on the award it received at this conference. I am very pleased to have this opportunity to address the Afghan-American Chamber of Commerce. The Chamber and USAID have shared a common commitment to rebuilding Afghanistan. We have both worked to attract investment, generate employment, and expand market linkages. Together we have helped establish a more stable and economically sustainable Afghanistan.

The Matchmaking conferences have been important venues for reaffirming our shared commitment to making a difference in the country. Today's gathering provides a rich forum by which dynamic and resourceful entrepreneurs such as you can learn about new business opportunities that exist in Afghanistan. It also gives USAID a chance to learn about your work and ideas for developing the country's potential.

I have been an international investor and entrepreneur for more than 25 years and can appreciate the contributions that the private sector can make to a vibrant economy. I returned from Afghanistan recently and came away impressed with the progress that has been made. I saw numerous examples of businesses which are thriving and making money. And, as an entrepreneur, I saw additional opportunities waiting to be seized.

This year's conference is unique. The time between now and 2014 is a pivotal period of transition. For Afghanistan, it marks the next stage in its journey toward stability and self-reliance - to stand on its own and take ownership of it economic and political future. And while the US will play a smaller role in Afghanistan, our commitment to the Afghan people remains as strong as ever.

I view the transition as both a challenge and an opportunity. But, as I look back at how far we have come, I know that with continued international support and the engagement of the private sector, Afghanistan is capable of meeting these challenges. I know you have heard or seen first-hand all that has been achieved over the last ten years, but I'd like to take a moment or two to summarize them.

In 2000, the average life expectancy for an Afghan was 42 years. The road network was in shambles. Electricity was available only in urban centers, and even there for just a few hours a day. Under Taliban rule, women were perceived as having a place only in the home. Half of the Afghan population under age 25 had never attended school, and job opportunities were scarce. There were also no airlines and almost no banking.

Today, the situation in Afghanistan is markedly better. Government structures have been rebuilt and women are now participating at all levels of society. Great strides have been made in health and education, bringing more Afghans back into economic and civic life. 64% of Afghans now have access to basic health services, compared with 9% in 2002. And more than 7 million children are enrolled in school, 37% of them girls.

Through its development programs USAID has helped establish a strong foundation for sustainable, inclusive growth. We have worked to improve the conditions for businesses and investment and to increase the capacity of both the private sector and government to create opportunities for all.

USAID has built or rehabilitated more than 1,800 kilometers of roads. New and refurbished roads have reduced travel times from days to hours-changes that are good for both business and personal security.

Roads aren't the only things connecting Afghans today. More than half of the people use mobile telephones, and 85% live within the nation's overall mobile network. USAID played a role in this network's creation, working with the government to establish business-friendly regulations, and now we are working to expand the use of mobile money in Afghanistan.

USAID, working through the Afghan government's Agricultural Development Fund, has also helped more than 10,000 small commercial farmers buy vital inputs and equipment.

The private sector in Afghanistan has created hundreds of thousands of jobs and provided needed goods and services for millions of Afghans. From my recent trip to Afghanistan I can attest to the fact that the country has a vibrant and resilient private sector. For example, more than 2,000 people are working for 32 companies in the Kabul Industrial Park. The managers there told me that they have a waiting list of more than 100 companies wishing to locate there - no wonders the Park is expanding! Similarly, in Herat I visited an IT business incubator that is helping creative IT students from the local university to create software products for the Afghan market.

While we should be proud of our achievements and cautiously optimistic about Afghanistan's future, we cannot be naive about future challenges.

As the US government, including USAID, gradually lowers its profile in Afghanistan, continued leadership from both the Afghan government and private sector will be needed.

With transition, private sector investment will be critical to help drive sustainable, inclusive economic growth. Private investment has flowed in Afghanistan over the last decade despite security challenges. Afghan entrepreneurs, including the Diaspora, have proven to be resilient investors.

To attract additional private sector investment, the Afghan government must strive to create a more transparent and business-friendly legal and regulatory environment.

Strong economic governance is also needed to successfully develop the minerals sector. While the sector holds much promise for generating revenue, the world is replete with underdeveloped, resource-rich countries. There must be a well-developed regulatory environment, improved infrastructure, and a commitment to integrate the sector's economic activities with local communities. After my meetings in Kabul with the Ministry and other experts, I came away optimistic that the pace of tendering and then exploration will pick up considerably during the next twelve months.

As a landlocked country, Afghanistan's long-term growth prospects are partially dependent on integrating its economic activities with that of its neighbors. By becoming a regional trade hub Afghanistan can turn its geographic circumstance into an economic advantage.

Even before the regional trade hub vision is realized, other opportunities exist. During my recent visit to Afghanistan, I heard a number of business people describe opportunities within the light manufacturing, agro-processing, services and construction sectors. I also learned about the more than 200,000 Pakistani's working in Afghanistan - providing goods and services which the local market could provide in the future.

For USAID, the transition will be an opportunity to put hard-learned lessons to work toward targeted, sustainable results.

We are actively planning how we can maximize the impact of what will likely be reduced aid levels. This will require USAID to refocus some of its development projects away from areas that no longer need assistance. For example, we have reduced activities with the Ministry of Commerce and Industry as they now have the capacity to lead activities on their own. Our current efforts will focus on foundational investments in energy, water, agriculture, job creation, and institutional and human capacity-building.

We will also continue to work with the Afghan government, other donors, and private sector partners to strengthen economic governance in the country and increase the capacity of the relevant ministries to encourage and facilitate private sector investment.

In addition, we will be working more closely with our U.S. Government counterparts to maximize our efforts. For instance, right now at the Department of Commerce booth in this room, USAID, Commerce and the Office of the U.S. Trade Representative, are offering information for importers and exporters on utilizing GSP.

At the same time, I know that many Afghan businesses are planning for the future. For example, during my recent visit to the Kabul Industrial Park I visited several companies which were uncomfortable with their high reliance on military-related business and so they have begun developing new products and initiating new sales efforts. I hope your meetings this week help you to identify new opportunities which will arise during the transition period.

I believe Afghanistan can embrace the opportunities and respond to the challenges of the next phase of its development. Because of the progress I have seen, I am hopeful about Afghanistan's future. Afghanistan has come a long way toward building lasting institutions. The basic foundation of a market-oriented, private-sector led economy is in place. We have seen incomes rise, jobs created, poverty reduced, and security improve. But, as the U.S. security role declines, it will be up to all Afghans, both at home and abroad, to continue moving forward. We are at a pivotal time in Afghanistan's history, a history you all are poised to help shape.

Thank you.

Atrium Ballroom, Ronald Reagan Building, Washington, DC

Last updated: February 12, 2014

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