AMBASSADOR KHALIZAD ON AFGHANISTAN 22/10/08

Remarks by Ambassador Zalmay Khalilzad

U.S.-Afghan Business Matchmaking Conference
October 21, 2008

Posted on

Mercoledi' 22 Ottobre 2008

Thank you very much for your kind words of introduction, and I want to say that I am delighted to have the opportunity to see you again and to discuss Afghanistan: where we are and its future prospects -- including U.S. relations.

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When we met last year, we took stock candidly -- noting that the overall picture in Afghanistan was a mixed one, with progress on the economic and other fronts balanced by negative trends in terms of polarized politics, deteriorating security, and troubled regional relations. I would like to begin by again taking stock of where we are.

On the negative side of the balance sheet is a continued deterioration of security, particularly in the south. Attacks by the extremists have risen by more than 30 percent this year. They have mainly been small scale -- terrorist attacks or IEDs -- but larger units have challenged Afghan and NATO positions as well. The hard reality is that more areas are insecure today than they were a year ago. There continues to be a wave of kidnapping -- even in the last few days.

Some indicators are mixed. With the election of a civilian government in Islamabad, there are prospects for improved relations -- both governments see extremists and terrorists as a clear and present danger. Yet, the problem of enemy sanctuaries endures.

Opium production dropped slightly and about two-thirds of Afghanistan's provinces have been certified as free of poppy crops, but production in areas with weak governance -- particularly Helmand province -- has reached record levels.

Corruption and weak and poor governance remain major problems, but President Karzai has recently nominated and parliament has confirmed several new ministers including a new Minister of Interior -- Hanif Atmar -- and several new governors as well as district administrators. I hope that they can be successful in the broader effort to improve security. I shall return to what needs to be done on security.

The economy continues to grow at an impressive rate -- 7.5 percent in 2008 -- and has attracted major new investments by, for example, China in the Ainak copper deposit, although there are reports of flight of capital because of the more difficult security environment.

There are positive indicators as well. National institutions continue to grow. The National Solidarity Program is serving more than 20,000 villages. The Afghan National Army has nearly reached its initial target of 70,000 personnel, and a new target of 134,000 has been set. Cooperation between the Ministry of Public Health and the international community has enabled more that 80 percent of the Afghan population to gain access to primary medical care.

In addition, the international community has redoubled its commitment to Afghanistan, both with a strengthened U.N. mandate and increased pledges of assistance.

Thus, this is a complex picture. Too often, it is depicted in terms so dire that success seems impossible. Yet, even as we are honest about the challenges Afghanistan faces, I am certain that Afghanistan can succeed. I have always taken the view that the key to success is a strong partnership between the Afghan people and the international community. As long as this is in place -- and as long as both partners fulfill their side of the bargain -- we will prevail.

I would now like to address how each side should think about the road ahead. For Afghans, the key is to understand that the world has come to Afghanistan to help and that Afghans must seize this opportunity.

Seizing this opportunity means that the Afghan government has to rededicate itself to doing the heavy lifting of fighting corruption, improving governance, strengthening national programs, and shouldering its share of the burden in enabling the country to stand on its feet. It also means holding elections in 2009 -- to which President Karzai has committed himself. This is very important to further instill a culture of democratic and representative government in the country, and sustain international support.

Also the Afghan government must realize that the development of the private sector is of paramount importance in order to provide the younger generation with hope and economic freedom. With 60% of the country’s population under the age of 20, the Afghan leadership needs to be prepared to deal with the needs and demands of a younger generation. Over the next decade some five million Afghans will hit the workforce and they will need jobs and financial security.

To the Afghan people, I want to stress Afghanistan will not be left alone, as it was in 1992. This was a tragic mistake, one that led not only to enormous suffering for Afghans but also to the attacks of September 11. Americans are united in their commitment to Afghanistan.

But to sustain international support, Afghans need to take ownership of issues and help the international community help Afghanistan.

Afghanistan belongs to Afghans -- it is Afghans duty to make Afghanistan successful. Afghans should demand more of their leaders. Afghans should do everything possible to take advantage of the moment available.

Above all, Afghans should not lose hope -- success is certain if we make our partnership as strong and effective as it can be. We need to work toward mutual understanding of the challenges before us and mutual solutions.

To Afghanistan's leaders, I would stress one point. The two greatest assets you have are the Afghan people -- who desperately want their country to succeed -- and the friendship of the United States. It would be a tragic mistake to stoke feelings against Afghanistan's friends in the pursuit of what would be illusory political gains.

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As the Afghan side steps up to its responsibilities, the United States, as well as the international community, has to improve its performance as well.

First of all, the United States and NATO -- in concert with the Afghan government and its security forces -- must establish security for the Afghan people. Without security, everything is at risk. The key to defeating an insurgency is to create security for the population at the local level. If Afghan villagers feel that they can safely cooperate with international and Afghan forces, they will. If they fear that they will be killed by the enemy in retaliation for cooperation, they cannot be reasonably expected to run that risk.

I must candidly state that, in recent years, we have not done well enough on this score. We have reverted to military operations designed to kill and capture the enemy but not to create enduring security for the people. NATO lacks a national campaign plan that is based on population security. This must change.

It is a positive sign that more forces will be sent to Afghanistan next year and that the Afghan National Army will be expanded. It is also positive that NATO has highlighted the need to develop a comprehensive security approach, one that integrates kinetic operations with improvements in governance and economic development.

Yet, just as important as the number of forces is the way those forces will be employed. The surge worked in Iraq not just because of the numbers but also because our forces were used to secure the people neighborhood-by-neighborhood, town-by-town, and province-by-province. An equivalent campaign is needed to secure Afghans, village-by-village, district-by-district, and province-by-province.

In addition, it is vitally important that we conduct population security operations in ways that win the support of local leaders, particularly tribal leaders. Raids and arrests of tribal leaders -- sometimes based on false information -- will alienate the people. We need to work with local leaders and respect local cultural sensitivities, and if we do so, this will improve the quality of the information we get.

Rule of law is the fundamental requirement for a country to be successful. An urgent step is reforming the police so that they can gain the confidence of the people. This should be a key priority for Minister Atmar.

Second, the international community must improve the coordination and prioritization of its assistance efforts. The new UNAMA resolution, enacted by the Security Council in March 2008, provided new authorities to the U.N. Special Representative to carry out this essential function in tandem with the Afghan government. All of Afghanistan's friends should step up to take advantage of the UN Special Representative Kai Eide's work to coordinate and integrate our efforts for the best effect.

Third, I want to say a word about reconciliation with the Taliban. We should encourage reconciliation by members of the Taliban who want to rejoin Afghan society under the new democratic political order and live in peace. To achieve this goal, Afghanistan's security, government, and economy must be substantially strengthened so that reconciliation talks take place on our terms. Without first establishing the right balance of power, it is likely that one would be involved in illusory or self-defeating solutions.

Fourth, the international community must redouble its efforts to recreate the "spirit of Bonn" -- the idea that a strong and stable Afghanistan is not a threat but an asset to its neighbors. We saw how the opposite -- a weak and unstable Afghanistan used as a theater for proxy warfare in the 1990s -- undermined the interests of the region as a whole, cutting Central Asia off from easier access to world markets; fueled the opium trade; spread extremism; and empowered terrorists. Today, an opportunity exists to achieve a reconciliation of Afghanistan and Pakistan -- one that will create a land-bridge between Central and South Asia and create an enormous economic zone, that will bring greater prosperity to Afghans and Pakistanis alike, and that can create common cause against extremists.

The international community should mobilize its influence and resources to enable Kabul and Islamabad to jointly address the threats emanating from the Pakistani tribal areas and to overcoming the political or geopolitical issues that create suspicion and enmity.

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I have spoken about what Afghans need to do and what is required on the part of the friend of Afghanistan. We in this room also need to do more.

On the economic front, there is no more important work than identifying specific business opportunities in the most promising sectors. And the opportunities are simply enormous.

Just consider the fact that about $20 billion of assistance will be pumped into Afghanistan in coming years, in addition to more than $15 billion that will be used to strengthen security institutions.

The security situation creates a risk premium -- but also reduces competition for those who seize the opportunities inherent in being an early mover. The international community will not abandon Afghanistan -- so it is simply a question of time before security improves. This means that those who invest in Afghanistan now can secure unmatched returns, though this opportunity will not last long.

There are many promising sectors. First, agriculture and value-added food processing. Before the Soviet invasion, Afghanistan had major agricultural exports. It has excellent soil, water resources, climate, and talented farmers. Great gains will be available to those who help Afghanistan reclaim its place in world markets.

Second, many opportunities will exist in terms of procurement services for international assistance agencies and businesses, as well as other services from accounting to hotels and restaurants.

Third, as Afghanistan emerges as a stable land-bridge to Central Asia, investments in transit infrastructure of all kinds and shipping companies will yield great returns. Central Asia’s energy, farm products (such as cotton), and other goods can reach international markets much more efficiently to the south. South Asia’s goods can flow north as well.

Fourth, Afghanistan has enormous natural resources. China will invest approximately $7 billion to develop the Ainak copper deposit, including not just the mine but also extensive transit and power infrastructure. There is natural gas in northern Afghanistan, and a survey by the U.S. Geological Survey has indicated that oil, precious stones, and other resources exist as well.

Fifth, energy and power is another promising sector. Afghanistan needs on the order of about 4000 MW of power, and only about 10 percent of this requirement is produced today. Key opportunities include refurbishing the country’s hydroelectric capacity and creating local and national energy grids.

Sixth, reconstruction programs will continue for many years -- creating opportunities in road construction, water management, new urban developments (such as the new Kabul city project), and other areas.

These sectors are just illustrative, and many more exist. My point is just to highlight that the fact that the United States is committed to Afghanistan’s success makes these opportunities tangible and real.

At the same time, the government of Afghanistan – like government in any successful country – has responsibilities and obligations vis-a-vis the private sector including security for the business community; commercial courts; eradicating red tape and corruption; and introducing laws and taxes which are business friendly. The development of a successful private sector would fast track Afghanistan’s efforts to become self sufficient. And by creating jobs and prosperity, the business section can help Afghan society as a whole.

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In closing, I would like to return to the foundation of all these possibilities -- the partnership between the American and Afghan peoples.

This partnership enabled us to defeat the Soviet Union in the 1980s and to topple the Taliban / al Qaeda regime after September 11. It has provided Afghanistan with a historic opportunity to become a modern successful country.

The economic partnership is just as important as the geopolitical one. Your contributions to this effort -- productive business-to-business relations – will create a network of ties between America and Afghanistan that will share knowledge between the two countries and create opportunities and gains for both sides.

And as we succeed in building a strong and stable Afghanistan, this partnership will help us together to promote the transformation of the broader Middle East, which is the defining challenge of our time.

Thank you, and may God bless the peoples of Afghanistan and the United States.