India Ink : Heather Timmons
It was a standing-room-only crowd Thursday at the Taj Palace Hotel’s Shahjehan Hall, as Afghan government officials and business executives wooed foreign investors at an all-day conference in New Delhi.
Hundreds of businesspeople and diplomats were in the audience, including representatives from China, Iran, Kazakhstan and Turkey, as well as from multinational conglomerates, including General Electric, Exxon Mobil and JPMorgan Chase.
Investment-led domestic economic growth will “ensure the economic stability of the country in the current period of transition” and in the coming years, Zalmai Rassoul, Afghanistan’s minister of foreign affairs, told the crowd.
Fahim Hashimi, the president of the Hashimi Group and director of international affairs for the Afghanistan Chamber of Commerce and Industries, expressed optimism about the country’s development, saying, “From a decade of turmoil, conflict and mismanagement, to an emerging market, Afghanistan has come a long way.”
As the United States and Europe wind down their military presence in the country, the Afghan government is hoping to replace foreign aid with taxes and profits from domestic industry. So dependent is Afghanistan on external aid that in 2010, international assistance amounted to roughly 97 percent of the country’s gross domestic product, according to a commonly cited World Bank estimate.
Thursday’s conference, sponsored by the Confederation of Indian Industry, is part of India’s recent increase in engagement with Afghanistan.
Afghanistan’s Ministry of Commerce distributed a booklet full of investment opportunities at the conference, led by a more than $10 billion pipeline project to deliver natural gas from Turkmenistan to both Pakistan and India. Other options included a $23 million cement plant in Jabal-e Seraj (the handout added that “any investment in the cement sector of Afghanistan would be welcomed”), a $6.6 million investment in saffron processing and a $5 million “poultry economic development package.”
Afghanistan is passing a number of laws designed to make the country friendly for foreign investment, said Prasoon Sadozai, the director of legal and regulatory affairs for Afghanistan’s Ministry of Commerce and Industry, like allowing 100 percent ownership of shares in a company by foreign investors, eliminating export taxes on any goods made or assembled in Afghanistan and allowing foreign companies to roll over loses from one year to the next to offset taxes.
Bloomberg, Samsung and Sony have already registered their companies with Afghanistan’s business registration board, he added.
The country has no restrictions on foreign investment in any sector, can provide land in industrial parks at reduced rents and is building tax-free zones, Wafiullah Iftekhar, the director of the Afghanistan Investment Support Agency, told the crowd.
Foreign attendees mentioned security and corruption as their biggest concerns about doing business in Afghanistan. But several seemed keenly interested in trying to secure a partner there.
Kakizaki Shinsuke, the chief representative in India for Mitsui-Soko International, a Japanese logistics company, said he’d been trying to do business in India for a year and a half and found the competition tough. One way to jump start business is to “go first,” he said, and Afghanistan presents that opportunity. He had already spoken to several Afghan logistics companies, and said he hoped to partner with one of them so they could use Mitsui-Soko’s international network.
Plenty of attendees from Afghanistan were seeking the same.
Saba Sahar, in a glittery silver top, black headscarf and rhinestone-studded glasses, said she came from Afghanistan in search of investors for her film production company. “Afghanistan and India should work together to make films to show their common culture,” she said through an interpreter. She said she was looking for someone to invest in films about social issues, including women’s rights and violence against women.
Ahmad Zubir Arian, internal audit manager of Afghanistan’s Safi Group, said he came searching for mining companies to partner with his company. “The mining sector is a new thing in Afghanistan, and we want professional companies,” he said.
What about the American government’s efforts to help Afghanistan grow its domestic economy?
“They are, you know, trying,” Mr. Arian said, “but I feel customs and traditions are very important.” He’d prefer to find an Indian partner, he said. Indian companies and Indian people have a long relationship with Afghanistan, he said, and “we can easily understand each other.”
Questions from the floor after presentations ranged from the practical to the idealistic. “Yours is such a beautiful country,” one man said, noting that was his impression only from flying over it. But, he said, the tourism sector has not yet been discussed. Would there be programs for developing that as well?
“Ah, well…,” Hazrat Omar Zakhilwal, Afghanistan’s minister of finance, said with a heavy sigh. “Let me say there are four flights a day and I would like that to double,” he said, adding that he hoped the planes would be full of tourists from India coming in, rather than Afghans going out for medical treatment.
Security was widely discussed, both during presentations and privately.
“Security is an issue,” said M. Ayuob Omarzada, first secretary (economic) at the Afghanistan embassy in New Delhi, in an interview. “But Afghanistan is a good source, especially of minerals and mines. A lot of opportunity is there.”
In Afghanistan, Mr. Hashimi promised in his presentation, “you will not see a company closed because of security.” But uncertainty is a “prominent challenge for investors,” he said, adding “just like anywhere else in the world.”
Afghanistan has recently signed a number of partnership agreements with foreign governments including the United States, India and Britain, Mr. Iftekhar of the investment agency noted. “This will, inshallah, remove any uncertainties,” he said.
