Melbourne - Remarks of HE Wahidullah Waissi, Ambassador of Islamic Republic of Afghanistan at the 3rd Australian-Afghan Business Council Conference

I am delighted to have the opportunity to address the Australian-Afghan Business Council Conference, the third in Melbourne, a city, which represents a prominent model of investment environment.

I have the honor of being joined today by Afghan government dignitaries and Afghan private-sector representatives who have one common objective – to provide you with an opportunity to gain a foothold in the fast-growing emerging market of Afghanistan.

Let me extend my cordial gratitude to the Australian-Afghan Business Council and the co-sponsors for organizing this important and timely event, which also aims, among other deliverables, to help stabilize Afghanistan through foreign investment.

I would also like to welcome all participants and thank them for taking interest in attending this important gathering. Let me assure you of the Afghan Government’s unreserved support to this initiative. Our new plans and programs will allow Afghanistan to gradually reduce our reliance on international assistance through private sector led growth, increasing revenues and building capacities.

Today’s event marks the private sector’s potential for generating wealth and new jobs in Australia and Afghanistan and across the wider region – to the mutual benefit of the Afghan people and the investors we’re inviting to invest in Afghanistan.

Three weeks ago President Ashraf Ghani had a fruitful visit of Australia, met the Australian government, civil society, scholars and youth. The President had a discussion with the Prime Minister Turnbull and his economic team on future of economic cooperation in the areas of agriculture, scientific research, mining, livestock and education between two countries. There are lots of potentials on these areas and we really need to work together to define its PPP parts. My colleagues, who have travelled all the way from Kabul to represent the key areas of private sector investment, will discuss in detail.

It will not be a surprise for you to hear that the private sector in Afghanistan works well in certain ways, but in a range of additional ways it could do with some improvement. At this juncture, Afghanistan needs to focus most on not only on growing but also diversifying its economy.

Growth and diversification are crucial for providing revenue for the government on the one hand, while providing jobs and livelihoods to average Afghans on the other.

t present the agricultural sector dominates Afghanistan’s GDP growth, but it is a largely informal and largely un-taxable part of economy, instead of being a major export sector it tends to support rural communities.

Our energy-rich partners in Central Asia are being buffeted by a drawn out fall in oil prices, and around the world as well as our own region numerous countries are experiencing excessive volatility in their stock markets. Currency pressures are continuing, and competitive devaluations have become a valid concern. And for a number of years now, overall commodities markets have actually been contracting. Trade, transit, and the extraction are the keys to our economic future in Central and South Asia.

In terms of Afghanistan, it is the energy and mineral extractives industry that holds the greatest potential for robust exports, steady returns on investment, and consistent GDP growth. However, even if we assume investment on a substantial scale, this will still take 8-12 years for the economy to begin to turn around. In the meantime, with only a gradual ramping up of major extraction, Afghanistan needs to focus more fully in the near term on transit.

Although the stormy weather our regional partners are experiencing is slightly different, they are in need a similar path to calmer economic waters. Short of a turn-around in commodities markets, they have just as much to gain from increasing cross-border trade, transit, and investment as we do.

Over the last few years, there has been a quiet transformation occurring in the county. The Afghan government, in partnership with the private sector, has drafted and enacted more than 20 business-friendly pieces of legislation that form the basis of any modern, vibrant trading regime – including customs reform, trade facilitation, intellectual property rights, food safety, and standardization. The passage of those laws, and other trade-related reforms, culminated in Afghanistan becoming the 164th member of the World Trade Organization in July 2016.

Afghanistan integrated into the global economy and sent a clear signal to the world that the country is committed to establishing a predictable, cost-efficient trade environment conducive to investment.

In the public sector we tend not to be conditioned to think in terms of the private sector. But in Afghanistan and around the region it is high time to unleash the private sector. We public officials need to spend more time with business leaders. We need to better understand their perspective, commit ourselves to taking care of their needs. They have the capital, but we can provide some of the software changes in law, policy, and regulations that businesses need in order to put their capital to work on infrastructure hardware. Thus, it is not the case that the space for public sector actors will be entirely crowded out by private sector actors over time.

With public-private project partnerships being touted as the wave of the future in our region, certainly traditional donors will continue to have an important role to play. IFIs in particular are often very active in this regard, and here in Afghanistan the PPP law is on the verge of being completed to take one example of necessary software.

The total investments during these years exceeded 12 billion dollars and we are pleased to see that these businesses are growing and have created a mutually beneficial outcome for Afghanistan and its neighboring countries in the region. To fulfill these new initiatives, it is clear that the private sector must be fully engaged, both in the early stages of planning, as well as overall project implementation.

Despite the high levels of return on investments and our efforts and measures to create enabling environment for investment, one of the major factors, which has a significant impact on the level of investor interest in Afghanistan is concern over security. While it is true that there are certain areas in Afghanistan where the security situation is not ideal, we should remember that these areas represent a small part of the country. The government of Afghanistan is endeavoring to ensure the security and safety of the population, infrastructure and investments in all other parts of the country while striving to restore complete security to all provinces in this process.

I would like to draw your attention to one important aspect of an inter-linked relationship between economic growth and security. I believe greater investments results in increased economic national activities in any country including - but not limited to - additional revenues, job creation, income generation opportunities which in turn leads to increased prosperity and service delivery. It is widely recognized, and we have noticed throughout history, that greater wealth creation and prosperity has a direct impact on improving security in a country and within its region. So it is important to note that investors who choose to invest in Afghanistan will not only be rewarded with significant returns on their investments, but they will also play a vital role in the restoration of peace and security within the region.

In conclusion, I would like to assure you of the Afghan Government’s active and substantial support to the private sector commercial investment with particular focus on the leading sub-sectors. This support will include, for example, considerably more focused investment promotion activities, more effective incentives and the expansion of opportunities for public-private partnerships.

Potential investors will be provided with better information and data on business opportunities. Access to essential factors of production, such as land, skilled labor and financial resources will be substantially improved. So let me end by wishing you a successful meeting with concrete, positive outcomes.

Thank you.