Transcripts For CSPAN2 Private Sector Development In Afghanistan 20171128

Without the partnership of the Partnership Ambassador tony win the senior advisers csis and a friend and thank you very much tony for everything. I think we will have a very interesting and constructive conversation today and when i think about people who are qualified for their jobs and the right people at the right time i cant think of a better person than my friend from the afghanistanpakistan office at usaid. He summoned that have served in pakistan and afghanistan and served in some of the toughest places in the world. Craig is a friend, greg is a patriot and a qualified individual. Thank god he has raised his hand and agree to public service. Thank you very much. Come on up here. Give them a round of applause. [applause] its very nice to see many of my old friends here in the audience particularly i found from cairo was done a lot of the things that need to be done or might be done in afghanistan. Its great to see all of you and i look forward to meeting those of you that i have not met but id like to say just a few words about the south asia strategy and then a very few points, three each on how that applies to usaids role in afghanistan and i will mention pakistan because the two are related. And then talk about some of the decisions. In essence i felt fortunate to be returning to usaid at a time only actually do have a strategy for what to do in the region and the south asian strategy so i felt fortunate that i have marching orders and within it we have the component as a set for afghanistan and pakistan. The afghanistan role for usaid is to help the three things, first to sustain the gains made in the social or over the last 16 years health, education and womens empowerment. The second is to help build that bond between the government and citizens and that proves the three things that the Service Delivery through Credible Elections and through significantly reduced corruption corruption. The third is your lead economic development. Focused on Market Centers and importantly but not exclusively on exports. I will talk a little bit more in detail on that in a minute after i have a sip of water. This is the very president ial thing to do by the way. [laughter] now in pakistan where we have been engaged for a long time we have three things we are trying to help afghanistan do. Fortunately we are in the same page with the government of pakistan and the network of important stakeholders in pakistan. The first one is to help pakistan merge fought off or to mainstream the Federally Administered Tribal Area of fought off. Anyway they feel appropriate with the adjacent province. In doing that to help make that area a place where people who have lived there all along can live a normal life and to help, there were 1. 6 Million People displaced and to the rest of pakistan. 85 to 90 of them have returned so to make it possible for them to reintegrate. Thats the first piece. The second piece is to help communities and pakistan particularly the areas vulnerable to extremism to gain resilience against that and particularly in parts of karachi karachi, southern punjab and the fox as it merges so thats number two. And something very much working with Civil Society and the era are they doing it. And then the third is helping pakistan attract private investment to create jobs particularly for the younger people because of the large the pakistan house. Under all of that to make a maximum effort to be accountable to the taxpayers funds that go into supporting our programs in pakistan and afghanistan and also in the broader context is i will mention in a minute to make the relationship with india as constructive as possible. One of the things that afghanistan has done over the last year is to create a corridor between kabul conduct our this has been a real support to businesses private afghan businesses that are exporting the product of the countryside. The things for which afghanistan is wellknown particularly in markets in the region so fruits, fresh and dried, marble onyx gemstone cashmere wool, those kinds of things and so this corridor has been quite successful and now as i understand from my last trip to kabul they are contemplating extending that to the uae pakistan and some of the Central Asian countries and turkey. As that happens and as we collaborate with business colleagues in england and other places the processing or the ability to invest in equipment to process the products depends importantly on one policy regulatory and administrative environment and no one knows it better than the Business People themselves. Second security, electricity easy clear access to land and a transparent relationship between the business and the government so they pay their taxes, get their permits some of the things they need to do to do that kind of business. We think that is a real opportunity for afghanistan and so we are doing everything we can to support it and we would like to see five, seven, 10 years what one can see if one drives from cairo to alexandria producing highvalue profits for local and export markets. We are going to be focusing in our support strategy on the market areas in the larger cities in the areas adjacent to them where the workforce is available and where the government has greater control than it does in some of the other parts of the country. The idea being that given the right policy environment and conditions there are ready our existing afghans and there will be more who can set up facilities to process the product of the countryside and reach out as one of the businessman i businessmen i spoke with when i was over there a few weeks ago. He is mining for onyx and helmand and processing it here in kabul. Others growing fruit and vegetables fresh and dried in conduct art and selling it in india. Recently we sponsored a trade event for three days at the end of september where we had between the indian and afghan business government officials media people Civil Society representatives. There were 1700 people that participated in that event for three days. Out of that came 27 million in sales contracts, afghan products for the indian customers and another approximately 240 million in various types of agreements that have yet to come to fruition. But some of them well. That shows though that their existing businesses and afghanistan that no other deal with the region and they have products that are acceptable to make that grow and we will be doing a number of things to support those businesses including as we have done with many of our programs that many of them are run and owned by women. Another piece of that we are now looking at is a quarter of the electric Power Requirements in the earth in afghanistan and so we have had for years our support to electric power set the amway are still working on that but this is to succeed there would be significant privatesector led Economic Growth that would relate to exports in the region and other places. What are the electric Power Requirements of that . So we are trying to get a handle on that in the government and the private sector by the end of january and then to see what we can do to hone in on that unsupported as we move forward. An important part of it and i was in talking with the leadership of the chamber of commerce and they said 70 of the jobs depend on trade with afghanistan. Its also true when you talk to people in afghanistan who are in business that a lot of the opportunity relates to exporting and it would be nice if there were Free Movement of goods across the afghanpakistan border. And so from both sides, from pakistan and from afghanistan bear going to be doing everything we can to help get a yes on that. Another important piece and the one last thing im going to mention is the extracted sector. We worked for several years with afghanistan to help develop that and the efforts really werent very successful. Now we are open to doing that again and we are looking to support it in ways that afghanistan wants to do. We are not going to get ahead of the Afghan Government or ahead of afghanistan on supporting extraction. It would be huge burden than waste of money and time however we have engaged in u. S. Geological service, Geological Service to take the huge amount of raw data that was developed years ago on the Mineral Resources of afghanistan and to put that into some form that is useful to potential investors and extractive industries. We have contracted that and that is going to happen. That way the Mining Companies will no if there is a particular resource, what it is and where it is. The independent Anticorruption Agency called the monitoring and evaluation has done corruption vulnerability assessments. They started with the industry of health and then they went to the ministry of education. The next target is ministry of mining petroleum. We are supporting them to do that and also supporting their quarterly followup on action taken against the recommendations made. The ministry of mines has a very good roadmap we think for development of the extractive industry of petroleum. So as the effort with the anticorruption push the president donnie emphasized at the senior officials meeting in kabul following up one year after brussels as they push forward without theres a roadmap that they have developed to develop the extractive sect are. We will do what we can to support them including a new project that we have coming on to help the Government Industries address the sources of corruption within them and to help Civil Society to monitor the extent to which that is being done. The final point that i would make and forgive me for going on longer than i was allowed, the final point is that there is a u. S. Afghanistan compact which is an afghan initiative that includes over 200 Performance Measures related to the whole gambit of issues that face the country including privatesector Development Issues and so that is an afghan initiative that president ghani has emphasized that they are moving forward at that. They are available in helping them to move on those things and that was the reason it was requested we have capability to do it. In parallel to that we have its not brandnew but has called for new Development Partnership which is taking key reform measures, Performance Measures and relating the u. S. Financial support to them. So its a fouryear, 800 milliondollar program of 200 million a year related to specific Performance Measures between the u. S. , usaid and afghanistan. Those are elements that can support the more specific private Sector Development initiative that we know is absolutely essential to afghanistan achieving the goals set president donnie has laid out at the senior officials meeting in kabul which is to move from talking about how to get more donor assistance to private assistance so afghanistan can stand on this own. Still to move ahead. That again relates to the overall objective of the strategy which is to help afghanistan be stable enough to manage extremism within its borders and help pakistan be secure enough to play a constructive role in the region. I look forward to having the chance to say hello to my old friends. Thank you. [applause] thank you very much mr. Huger. Hello everybody. My name is Romina Bandura and im a senior fellow here and i will be moderating this excellent panel today. Im going to introduce briefly our distinguished panelists and then i have a dozen questions to ask you. First a member of the afghanistan womens Chamber Commerce and industry. Ambassador Anthony Wayne a former deputy ambassador in kabul and coordinating director for development and Economic Affairs of the u. S. Embassy in kabul. Jeffrey grieco is president and ceo of the Afghan American Chamber of commerce and former usaid assistant administrator and mr. Hussein a romney entrepreneur and member of the federation of afghanistan craftsmen and traders. I would like to divide the panel into the u. S. Perspective and jump into one of the local voices. We will start with a feelgood story. I would like to ask some questions about the achievement of afghanistan and the private sector and in particular in the last 16 years. Jeffrey grieco and Anthony Wayne but in your opinion are the three main achievements that the third and afghanistan have accomplished . I will start with the private sector. Afghanistan, i think you have to historically look at it in context and im very aware that cspan is here today so we have a larger audience than just our audience here today watching and its really important the American Public know that the success in afghanistan has had with a lot of support from the United States and other donors of the latter on bilateral have not just been in health and education and womens empowerment. There is a lot of success going on in afghanistan to enforcement a lot of that success cannot be talked about publicly because of the insecurity level and the possibility that you could bring others into it who would like to take down that investment or take down that successful project. Im going to try to whip through a few private sector successes in a broad categorical way that i think identify how far we have come. Going to start with a sector that is close to my heart. In 2001 there was virtually no cellular or mobile telephone they and afghanistan let it go let alone women having access to anything telephony related. 18 million mobile subscribers now exist with the penetration rate or women between 86 and 92 having access. Thats an incredible achievement. How does the Afghan Government and the afghan private sector got there . He was with a lot of support from the Donor Community and there is no arguing with that. Early donor vestments for starters early as 2002 came from the department of defense come the state department usaid helping to implement over 2. 6 billion worth of infrastructure within the i. T. Sector inside of afghanistan and the cognitive structural base with an additional 200 billion of afghan other direct investment coming from outside donors to help build up some of the ip infrastructure inside afghanistan to bring it to where it was a few years ago. Unfortunately we are going to talk in a few minutes about what needs to be done now this is one of the sectors where they have fallen rapidly behind the investments to keep it a big Success Story for themselves. Secondly as agriculture. Everybody knows afghanistan is primarily an agrarian economy. 22 of the economy and im not talking poppies in afghanistan this ad driven as a percentage of the 2016 gdp numbers. Thats a pretty sizable percentage that afghanistan agriculture still the main driver for employment. The main driver for subsistent living. Wheat is the main component of that and afghanistan is now the largest percapita wheat consumer of the world outstripping every developed country as well and the developed countries as well. The main products and agriculture include not just wheat and opium unfortunately a big part of afghanistan still. Mutton sheepskin and lambskin are counted as key potential export items. There is a lot of exporting going on with pomegranates and dates in fruits and. The third area is infrastructure development. Its been a major amount of infrastructure involvement done by the United States by the Asian Development bank the world bank and others as well as the Afghan Government. In a series of private Sector Investments that will hopefully longer term be privatized and fully skilled as utilities and other operations in afghanistan. This includes the dam. They were released phase two and the contract was awarded for general electric. There is a turkman gold line that has been constructed an almost finished. A 500 fault line is almost finished. The kabul main public utility turned into a private semiprivate hopefully soon to be privatized fully and available to a foreign dust or if they afghanistan Power Systems longterm. They have spent a lot of time on the regionalization notches of their electricity and their power supply grid. They have done a power supply agreement successfully with the uzbekistan turkmenistan and tajik span print all of those will come into what is in the future we hope going to be a very diversified electrical system that will have major components owned by private Sector Companies and operating utilities under the new independent Power Production. The last issue is the attempted and i think president ghani deserves credit for this. They have attempted to regionalize a lot of the economic infrastructure that will support the longerterm private sector. That includes the kandahar port deal which gives afghanistan an agreement with india and iran and a port that they can ship products due to go to the indian ocean. They started Freight Train connections with china working through the kazakhstan and the uzbeks. The salmon dam was in the air corridor notably the great talk about is an Exciting Development because its long overdue in the afghans need ways to get their private products out to private markets abroad and thats a way to do that. That was a great introduction pana covers the highlights of where we have been. It is true that percapita 64 since 2002. Overall the economy has grown but its also true that despite our recognition of all the donors for a long time its been hard to foment growth of the other in afghanistan. As jeff mentioned agriculture remains the sector that employs 70 of the population. It was 20 in gdp and thats right and services are 65 which is where afghanistan has failed large tradition of Small Traders and other services. You have a Business Industrial sector with the more around 25 and the Development Bank in their last report said they be the real business sectors tend to all . So there is a lot to do out here even with the ambitious and determined not to bud norris that exist. Of course a lot of the initial growth involves as many of you in this room know came because the International Funds flowing into afghanistan a lot of dreg from military spending that was going on to support spending, logistics and a good deal tied to the development of sources. What you saw was the shock that hit the economy where all of those with true and 2012, 2013 and 2014 and a real drop in gdp growth. Happily that is now reversing and you have seen an upswing in gdp so its expected to be, its about 2. 6 this year growth and expected to be lower than 3 next year. But there is a lot that has to be done. The private sector comes as an important component in a number of areas that need to be worked on simultaneously as greg knows well and others know well but if as you are supporting the private sector you still have to get better at collecting government revenue and you have to know how to do it in a way that doesnt harm the private sector which is one of the areas its being worked on right now between the government and the private sector. How can you expand your revenue and at the same time flow meant more private sector growth and not overburdened them with bureaucracy or just focused on the biggest evidence sources of taxing. You also have to get a lot better and actually expanding your Government Funds up. You have to provide Daily Services as was mentioned in a way that people appreciate it and thats the general population as well as to the business at her in the air. And the infrastructure was a very important part of making it possible in that infrastructure now has to be contained because a lot of it is not maintained sufficiently in the past several years. So you have got to work on that. And not just to talk on the top side, there are a lot of reasons that confidence hasnt been high or Consumer Confidence the slow pace of reform and the continuation of corruption and the weak regulatory system and the legal system that is fair. And will probably go through them all right now but there are a number of steps to improve the dialogue in the private sector so that best practice for better practices in dealing with tax problems and audits and practical things that make it hard for businesses. And then there are a number of things that they are going to have to keep working on in the medium and long term, some of which jeff and greg mentioned and we can come back to. So i guess i would say theres a lot of work to do, but we all recognize the vital importance on getting this privatesectorengine moving and one of the most important facts about that is 400,000 young peoplecoming into the job market every year , and if you dont generate jobs , whats going to happen to them . But we know young people without jobs are usually not good for societies. The private sector is in place that you cangenerate most of those jobs. Thank you. So mister grieco, what you think of the sectors that have the highest potential for growth and why . Im going to start with mining and extract its because thats got a lot of focus from the Afghan Government and the United States government in the past few months since President Trump came to office. In afghanistan, there is a huge amount of illegal or what we call illicit mining already happening around the country. Am of the deals are struck for shipments out to the middle east, lebanon, but a lot of it now is heading to china and with special deals between chinese Extraction Companies and afghan governors or regional players or militia leaders or in some cases. The Afghan Government is trying to get a hold of that and trying to bring the Mining Sector into the formal economy in a way that structure and plan and hopefully compliant and ethical so its a big lift to get there. The areas the usg and the Afghan Government are looking at right now are of course marble. Afghanistan has wonderful marble exports occurring regionally. They want to expand that dramatically. Their Cargo Network is going to help to do that. Cold, the world bank and the only exception for clean coal in the world for afghanistan this past year which was a big deal if you know the bank and how they been pushing solar and wind the past few years. Afghanistan has clean burning coal located through the country and if you know coal, it has the ability to bring portable generation capacity to villages and areas that never would have had Energy Development there for years or decades so coal represents a sizable extractive resource. Lithium. The government has had meetings internally and with the afghans about a possible joint venture between the United States and afghanistan to explore lithium. The us Geological Service is in the process of doing an evaluation with the Afghan Government and us military to take the analysis they did from 2006, another level deeper so extractive assessments could be made on the best locations for that. Iron and Copper Investments are huge, theyre already there. Theres a major coppermine having problems getting going. That was done through a Chinese Investment agreement. There are growing demand in china and ef for for copper and iron aswell as gold and other precious gemstones as well. Thats extracted. Second sector i would put is ict. I opened with a discussion about ict as a success but if you know the itt industry, you have to make confident investments to improve the offerings for your consumer Led Community thats your subscriber base. They should have moved on 4g more than three years ago. It was delayed a number of times. They published and i give you as a and ambassador lawrence a huge amount of credit, they published their new open access policy on their website and they are promoting an open access which means foreign direct investors can come in and compete with afghan partners for developing their 4g modernization assets. We are expecting a spectrum anytime in the next month or two on 4g which could bring another round of major investments. Its late but theres going to be major jobs with that and its a huge uplift to the economy because it alone level skill jobs, medium level skill jobs and a few highlevel skilled jobs in the main areas. Last sector is energy and power. They have a new independent Power Production law passed a year and a half ago that allows independent power financing to be done by outside companies coming into afghanistan and in a Partnership Agreement with the Afghan Government or regional government, they can structure their own itt agreements. The usg was financing goes through solar agreements but solar, even afghanistan put solar anywhere it would only get them three percent of their energy needs so theyre looking at trying to do itt and coal and other areas, natural gas, they have Strong Deposit there and hydro, afghanistan is a hydrobased company with small and large capabilities for longterm energy plays as well and ill stop there. Thank you. Ambassador wayne, you mentioned regulatory obstacles. For afghanistans private sector. Id like to hear your views and of course mister grieco was on what are the main challenges that the afghan private sector is facing today and what would be three major reforms that would help it develop . Challenges and what are the main reforms. I think ill let our colleagues in afghanistan talk about what the afghans are saying. But it is true that what afghanistans been trying to do is pursue goals that are sometimes running into each other. Weve seen that over the past few years. The government needs to dramatically increase its income. Right now, they cover about 40 percent of their budget each year. The other 60 percent provided by International Donors and all the donors are saying that revenue to lighten up because we dont want to be funding it forever. We are only here for a while, its not going to change so the revenue collection parts of the government are going out, theyre trying to root out corruption because a lot of this money that was being collected wasnt in the middle government, theyre trying to get more efficient and transparent in collecting that but along the process they strongarmed a lot of people and they focused on the most obvious, Biggest Companies to try to get that money out of them and that doesnt only happen in afghanistan. Ive been a lot of places where it happens to and so now the need to go to a phase where they still are finding ways to expand the tax base and that input but do so in a way that facilitates the creation of jobs and the maintenance or the creation business, maintenance of business. And they are trying to do that through those work on onestop shops thats being done for businesses to come in and work that i think is not there yet at its meaning for next year if i understand correctly. There are revising the kind of penalties that come from audits and things though people can easily appeal if they think theyre being unfairly charged. Itwas very difficult before. Theyre making , introducing Electronic Filing for taxes and other fees, all of which are aimed at making things easier, more transparent and theyve created this new highlevel counsel which is focused on the private sector and as many of you know, theyve made private Sector Development one of their National Priority clusters or theyre working on which is an important recognition of the importance of this area. There are a number of specific things that will help this dialogue go forward and a lot of this is the need to keep the dialogue going and take the ideas that come up in the dialogue from the private sector and put them in practice which is not easy for many governments around the world. It will take i think a lot of hard work and the continued interest of many of us to get that done. I would jump in on a few things. Again, looking at the private Sector Development lens, capital is the number one issue for me. The lack of access to capital for the private sector in afghanistan is atrocious. Its only two percent, only two percent of afghan firms right now as of 2016 use any type of for the finance investments. It is not feasible for them. Its improving too slowly. The government has to move more quickly on it. Theres little Debt Financing available, all the investments occurring and there are millions of dollars of investment going in, mostly through private afghan hands into the country and thats happening in a pure equity based investment so overregulation, i think post kabul bank scandal, they went to an extreme and thats hurting the ability for the private sector to get access to capital. The private banks lending at rates of 15 percent to other banks in the country when most banks and get 15 percent from the central bank, why do they need to lend to somebody else. They can keep taking 50 percent all day long so thats number one, number two is the insecurity. He had talked about it but the insecurity issue is a major issue in afghanistan from a political legalization endpoint. But hasnt necessarily impacted major infrastructure investments. They havent gone after them systematically. There is a lot of investment going and thats not getting attached and if theres not a problem with those investments, i dont want to talk about that publicly but we have to talk about this insecurity is really right now in the last few years and focused on creating political expediency for the terrorist organizations and caliban specifically but not necessarily hurting their ability to feed themselves, to grow products and so forth. Thirdly, theres poor structure of the enabling environment inside afghanistan or business and this is from our specially are afghan members, this is their number one issue. There has been a change from i think the Karzai Administration to the Ghani Administration that the private sector as an ancillary accessory to a big institutional state structure that we need to be doing and building a capacity and thus the private sector feels to the side where there seen only as when theyre needed kind of thing. That needs to change. The image needs to change. Afghanistan has to be open for business, their government has to be willing to say we want direct investors, we want afghans abroad but afghanistan is extremely successful and a proud segment of the global country and a Global Economy around the world. Have money and equity to bring in to invest but there needs to be a change in that. Theres a feeling of overregulation and micromanagement of the private sector economy. Wed like to see that improved. One inf and World Bank Report from september october said theyre only spending right now 35 percent of their development budget. On projects for Critical Infrastructure that affect economic development. Wed like to see that about 75 percent, not 30 percent. Can you improve the private sector economy if the government is not executing on the budgets given to it and the trust funds out there . Next is over taxation. Our members are up in arms about this. 80 to 90 percent of the afghan economy is informal. The reason theres a high informal economy is because of the high marginal tax rates that exist. Its a disincentive or companies, many of which have moved out of afghanistan. Pakistan and other Regional Centers where the taxes are lower. The current rate is about 40 percent and you can go to the world bank doing business website to look at how calculated with all the fees, investments, taxes you pay on all your different Business Activities and when you compare that to the us and iran, i should note that two of the countries are 44 percent. But the regional neighbors are much lower and theyre competing for that Foreign Direct Investment with those neighbors. Qatar at 43 percent, uae it working percent. Curtis dan, 29. Pakistan is at 33 percent. Ill leave it there. Id like to hear the perspectives from our afghanistan private sector president in the table, the same question, what do you think are the main challenges for the private sector and just three challenges and maybe what do you think are the reforms needed so the private sector can grow . Good afternoon. First of all i want to get some background in these situations and normalizing in afghanistan as you have there, even the taliban, we did not have access to education. And since the taliban, we had Development Projects in afghanistan and we did have a number of scaled assets to come to their workforce and market. And we do have, households gave access to our education inside and outside the country. Decides that, the technology is one of the main competence for Business Development in his country so now they afghan women have access to Technology Using the small health phrase so one of those abilities that we do have in afghanistan is that afghan women are not able to speak other languages either past june or something but now they are. [inaudible] and they can talk in different languages and can Access International markets easily. So what the challenge is in afghanistan is with the private sector so of course we do have the challenges that access to finance because you do need to provide the number of banks and county to get the access of finance and then there is also some cultural things in afghanistan that we are not able to get a good project or a approaching easily with the government of afghanistan so we do need to do more hard work to reach these opportunities. And then for. [inaudible] is one of our afghanistan implements, we do not have access to transportation easily or placed inside the sea so i cannot even talk to provinces of afghanistan with also is in afghanistan. This is what we are looking to be first in the taxation is also one of the biggestproblems , we have a very high range of taxes that we have to give to our government and to find that caution is one of the problems, taxation that we are bringing to clear our taxation. We have to give more than our taxation are or a fee for the person who works there. So im thinking that if you have that government, that the government, that system in afghanistan that everyone would be able to have a problem and so that would be part of the problem with the businesses. And besides that, we do have the column, we didnt have any Good Government support. Officially with the private sector. So fortunately, we do afghan women or women in afghanistan, we do have the Afghan Chamber of commerce in afghanistan but for women its always very family. We never get involved with the various meetings, planning or activities. So there are so many things going on but beside that we have so many positive things that i have mentioned in the meeting. And its really changed in afghanistan. Thank you mister off ronnie. You very much. We are happy that we are not alone here. We are facing from afghanistan here. And we have been working for the Afghanistan Organization for many years. [inaudible] we have been dedicated to working for the government on the private sector. And what i want to say is all the states are rightly, so many good news in afghanistan but they have been active since 2006 and i started a Small Business in afghanistan basically, our growth in the last 10 years, 10 times and its a good thing but i also see a problem, my counterpart in the United States, 10 times problem of isis and afghanistan, its 10 times higher. Its true, but theres no access to finance in afghanistan but theres more access in other counties. The Cultural Development funds, they provide and give land loans to the country but who can say, theres no private sector. We are going to the market,to the other plant, to the workplace. Its a bit of an effort. And why, there is no capital in the private sector at all. For having access to finance, theres a lot of policies that need to be conceived. Its true as the subject, theres a lot of good things in afghanistan but we have good access to itt. The government and itt. The corridor and like media and all of these things are very good. Services are also broken but the countries are very, they are big business here and they are doing well. Theyre doing even better finance. They have their own financial ability. But what and afghanistan and the nutrition of afghanistan, we have to forecast on this. And the medium can support farmers, they can support all access economy and can ensure sustainable economic government. If you go to the afghanistan market, theres lots of tutorials. We have. [inaudible] in 2015. There are 600,000 micro interference in afghanistan. Each afghan has at least one worker in the labor force, one. And they have maximum up to 10 or 15. So they are the main provider of afghanistan jobs market. International organizations. For the United States, if they want a business strategy, they need to provide them with a situation that they can be able to hire one person in the year in their village so they can provide 600,000 jobs. Its much more than what we require in the job market. But unfortunately, those 600,000 are neglected during the process, we can do that. They have been discriminated, they have been disciplined in the government and still not being able to Pay Attention to them and sometimes they have been kicked out by the government institution. Thats why they are not competitive. They cannot provide good service and another good challenge for this, we have to lets say why is the opportunity . Because they are free in the government and they are informal. They have apprentices that the government does not organize them. Their expertise, their experience. And its a lifetime in just the margin, they have an active municipality. Other challenges on the governmentside is , part of the private success are also private Sector Institutions are not very much doing well. They need to be a little bit under capacity, their competency to provide Service Markets or based on their members. Members are also skeptical. 400,000 workforce in the market, formally 200,000 is keeping from them. Coming to late europe or that because we have disappointed them and cannot work. Most of them are very well educated and experienced and they have visitors in afghanistan. They just lived that business. Bankrupted and these are also, from the government side, deforestation, commerce , finance and many other amenities so you would achieve the department. But none of them are, they are very attuned to the private sector. During the private sector, based on their trajectory, or impediments and they are just looking at the factors of employment. They are partition and the mentality is like if you were to put the government office, they would look at you not as someone that for example money was like. Or lets say lets ride or something. So these are uncoordinated Public Sector for example. They have a lot of additional integration. [indiscernable] politically we have one member of every afghan faction and commerce and nyu in india, [indiscernable]. If something happens, then i dont know. So very interested in the market that they have uncoordinated and specific, week in regard to providing. [indiscernable] also, what you just mentioned women, they can make a bigger contribution. Not the traditional way of business, in that split. If you go to interference, like the bigger traditionally learn that its not very much away. So how we can make this security and practical work and knowledge and practical things to make them available to their competency and, yeah. Another challenge is also seeing in the neighborhood of china and india that they make very cheap products and that would allow them to ruin the market. Thank you. I wanted to touch upon the issue of jobs. Afghanistan has a very big youth population. I think approximately 84 percent under the age of 24. What are the opportunities, what are the current Job Opportunities that you have had no young women and young men and afghanistan and can you talk a little bit about the rural setting versus urban setting . And what are the main challenges they are facing as entrepreneurs, as workers. Afghanistan is mostly an agricultural country and that country has a lot of competitive advantages so that no country can compete and we have a lot of. [indiscernable]. But i would like to say that in regard to the balance allotment is the value chain. A coordinated network of culture for that value chain. Zero so for policymakers who want to fight for the private sector. One thing also what was the change and although the government had a lot of that should be considered a much and this can help for example to come to the province to the Industrial Area and then they can be exported to the local market. This can covers the rural area. In addition to that theres also opportunities for job, Job Opportunities and the infrastructure. Organizing efficiency recognizing the importance of the value of providing Vocational Training and vocational educational training to particularly the market who spend 10 or 15 years and their lives as an apprentice but they dont have knowledge. This should not only be forecast in the big cities but also to remote areas. In that regard we have a tendency to increase and theres a high chance that they can get a job and they can commit to a job. Please. Thank you so much. 70 of women involved in the Workforce Development in the afghanistan market but because of the gender gap in never counted as a formal job. It never counted as a formal job. Unfortunately in the last few years we had businesses with the Afghanistan Government and about 95,000 jobs around afghanistan. Its very tricky especially for women because first of all we need jobs for the afghan people. Actually we do have Job Opportunities with the development project. We have Job Opportunities for some other companies where they are only coming to work for shortterm and afghanistan by the same time we need a sustainable job at creating and establishing and developing the mining their in order to export promotion for jobs and afghanistan. As far as women finding a job i have a personal experience especially when we were implementing a Youth Project so in 2013 people implemented the project for the first time. We have trained them in different sect errs in finance, marketing, h. R. And finally we understand that most of them want to work in the back office. They never want to work as a marketing person and its a challenge from the beginning because they didnt know that. The women love to work in the back Office Rather than a marketing so then we decided to have everything before we select them. Of course women because of cultural barriers in afghanistan we need to build in and management administrative sect there to work and back offices for the government and the private sector. So i really emphasize jobs building factories and we also can encourage more women to get involved with formal businesses and entrepreneurs in afghanistan to create jobs. So, thank you. Im going to ask the same question to all the panelists. How has the u. S. Businesses helped foster a more vibrant private sector in afghanistan . And what role can the u. S. Private sector play . I guess thats me first. This is a tough one. There has not been significant u. S. Investments in afghanistan. There has been a lot of u. S. Corporate participation in afghanistans development but they are through donor assisted mechanism, programs and government led kind of programming. As a result its been very hard both tickets of the insecurity issue, because of the lack of sustained compliant Government Development in the country on the private sector side. Hasnt allowed an interest really from a lot of these countries for a lot of these companies to go into the country and invest. I talk a great deal about the fact that the United States has now been afghanistan since 2002 and we do not have a bilateral Investment Agreement, i bilateral trade agreement a bilateral treaty with afghanistan by we have that with every other nation around that in the. And in some places they can in place for more than a decade times decade. Why is it that the United States has put so much blood and treasure into the nation and yet wont have these foundational tools for private Sector Investment in place for their companies to be able to go in and make strategic investments. Lawyers for multinationals have told me they wont allow the company to send people into the country to do prospecting and Marketing Missions because they dont have any protection under the u. S. Bilateral agreements with afghanistan. Without those agreements in place its very hard to get interest in the investment side. We will continue to try and our hope is that there will be at least a bilateral Investment Agreement in place within the next year or so. These are not difficult documents. They are about 60 pages if you look at the pages around the ustr. Even pakistan has a robust bilateral assessment agreement which as a result if youve been to karachi all the u. S. Major investors are there and spending money. If you have been for delhi for the summit last month u. S. Investors are all over india so we need to give afghanistan the ability to attract the same companies that are in the region working and investing in producing products not just for export to the u. S. Or developed country markets, they are investing for the growth of those countries and their economies and we need to invest in that pic on. On the ict site we have had major u. S. Investors in that have gone into look at it because they partner with afghan and that could still be an area without necessarily right now having that Investment Agreement in place. Our hope is we have had major u. S. Construction firms working with afghan Construction Firm trying to elevate the capacity of their level of competitiveness and compliance and good programming for management. Our hope is those relationships will continue beyond the Development Cycle really into private sector led programs because there is a lot of potential tied up in those original partnerships that help on the development side. In addition to doubt what jeff said is correct. The issue is security and a lot of people are not wanting to take the risk to invest a lot of money in until the security situation has improved. The u. S. Government has been willing to invest 620 billion or so but the private sector makes the choices than they are going to do that unless its a good Legal Framework and less they feel theres a good secure situation as well. Thats part of the problem that we have the do not just the bilateral but the multilateral donor efforts and what has been talked about and what i hope there will be an increased focus on this a couple of things that came up better budget is execution to get the money in the afghan economy and selecting projects as hussein just said the value chain and the agricultural area because a lot of times the environment helps the private sector develop its value changed enough so we can do. I hope we increased focus among donors by saying okay Afghan Government what do you executing your budget with a focus on employment and consumption . It comes from employing people because you not only get the value out of the direct value chain itself but in those workers who work in it. They are going to be spending money with those microenterprises and you are going to have a multiplying effect. I think we need that very much to help it grow in addition to the large projects of them for structure. And i think the project greg was talking about helping foreign. Is going to be important in that sense too. I would like to see more tied into the agricultural areas in general because thats where most of the people still are. It will be good if we can get them some income. The private sector has a lot more efficiency than the Public Sector in any project. Another project the u. S. Is spending hundreds of millions of dollars in afghanistan and one of the projects has a 120 million. This 120 million from the United States will invest and 12 million and afghanistan. If you want to create jobs and develop afghanistans economy just as an example. People from that region air they have are from their land or whatever. You have the technology we have the knowledge and experience and everything. After 10 years will be the result of . I think companies will not come. This is like her example lets make something in afghanistan. A u. S. Brand, lets make it in afghanistan. We have good investment and we are businessfriendly. Some of us are practical in afghanistan. Will the private sector. The security concern to have in afghanistan i can say afghanistan is a land of opportunity for everyone for mining, for agriculture, for everything. At this stage i would have one comment that we would be able to create jobs. They are trained with technology and they are trained with the source of technology knowledge. We do have a very talented young people. They are welltrained but unfortunately they dont engage outside the country. Right now i do believe that we do have so many workers from china and other countries that are working for Technology Companies so as concern of security one of the good parts that we do have we will be able to help them by giving jobs with your carrier. Thanks so much. Just one final question and then im going to turn it to mr. Huger for final thoughts and then open up. This is a room of foreign investors. If you had to sell afghanistan what would you tell them . Investors looking for actors. Labor, land, technology and security. And capital, exactly. Capital and technology from the United States and Human Resources or manpower. This makes such a nice joint venture and i believe those who are armed and fighting against the government they need to start working with their companies. You have to attract income and for them its work to go and make some for most people its a job. If you give them a secure job it will lead to Better Future for afghanistan and peace for afghanistan. We have a lot of other good things like mining and mining is not the only generous. For example wheat compared to so we recognize and identify those areas and is very attractive for the businessman. Manpower and achievements. Okay do you want to comment . Of course i mentioned before first of all my message for u. S. Investors lets first get a peaceful afghanistan and then we have so many in afghanistan because we do have a very talented generation waiting for a better career so you have mining, you have agriculture and you have many things that you can invest their but first of all of course we should be more focused on better security because we do want you to be there with better achievements and Better Business future. Thank you. Mr. Huger do you want to get parting thoughts and then we will have 20 minutes of q a. Then i guess thank you and thank you palace. It was a very good discussion and many different points of view. If im i presume to summarize this rich discussion i would say perhaps private Sector Development has with the overall aspiration for afghanistan is derived very much from addressing the security and governance concerns. And the International Community is and will support afghan efforts in that direction in security, im not very qualified to comment. Its not my lane. Governance as it relates to business and as it relates to taking the image of the opportunities of the in less than is pretty much in our times arlene, not exclusively. There i would say we cant want it more than afghanistan does. Thats also true anywhere including any neighborhood including any country. We camp wanted more than afghanistan does. My sense of that issue of political will having been away from afghanistan for about four years is that in the National Unity government we have a real partner who does have the political will in spite of all the challenges to move forward with things that make sense to afghanistan. We dont always understand immediately why something might make sense to afghanistan but i do think that we do understand we have a row partner. With that and there were discussions here of different mechanisms, different contexts and approaches to the governments efforts and societies effort to translate that puggle will into a reality that supports private Sector Development. We are supporting them as are the other donors so thats good news but its not to use. There is a direct relationship i believe between the progress in governance, the progress in security and the opportunity to get business local and foreign. I think it also makes sense to be practical about what are the real opportunities and on this panel many sect errs or areas of endeavor were mentioned but i would emphasize the overall agribusiness, the extract disc, the ict that jeff was talking about. I would add to that we are very important our trade events in india, that they are not exclusively related to india but they are important and that is private sector involvement in health and education. Feeforservice medical services and affordable private schools. Those are very interesting and potentially lucrative businesses businesses. There are networks of private schools in pakistan and india and many other places. There is work going on in that realm in afghanistan and we are supporting it so there are a lot of Different Things the private sector can do as security and governance evolve for the better better. As investment finds opportunities there that will help the security and as the people in government have the political will and this was said here listen to the people who are actually in a position to invest in mining or education or producing fruits and vegetables. Then it will get right but its not going to be quick. However from the u. S. Governments perspective its important and so we have ace strategy not with a limited timeframe nor with limited ambitions. We have ambitions that track with the objective of afghanistan becoming a place to manage extremism within its borders and all that we have been talking about her part in parcel to handle that kind of thing. So i thank you all for the opportunity to participate in the panel and congratulate all the members for your interesting and important comments and we all look forward to your comments and questions. Thank you. [applause] we are going to take two questions. Can you please identify yourself yourself . The gentleman here and the lady here. Thank you very much. My name is mike delaney and i was the forums Service Officer and the trade representative eyes involved in south asia and recently with the department of commerce commercial lot of film and program. My question relates to something mr. Huger said about external trade and i fully agree with the idea that you really need to be able to get your goods out of the country because if you cant theres really little purpose in developing the industries. We have struggled mightily without much success in getting a good viable longterm Transit Route through the port of karachi which is the traditional Transit Route and this is a long unhappy story. Kandahar air route is a good idea and i wish everyone well. I think it has limitations and i dont see kandahar talk to traders. Youll find or i ran there are all kinds of problems. Most of them have serious issues with payment and Everything Else else. So to get back to something you said about doing everything we can to get the trade situation done can you outline what it is or what efforts are underway to try to normalize afghanpakistan trade particularly the traditional route through the karachi port . Thank you. Im, thank you very much. I am a sociologist here at tcu put it like to ask you a little bit more about Women Entrepreneurs and the kinds of businesses they are supporting. What happens to young women who go to universities in afghanistan and . What are they studying . What are their plans for when i graduate and if you could talk a little bit about working at home for some afghan women, this might be more desirable so what kind of opportunities are there to do homework and that might be with the itu or other kinds of enterprises. If you could elaborate on that i think we all like to hear. Okay. Its been a maybe i could take a at the first question. A very good question. We are involved in the region not just in one country. The issue you raise is a regional issue. Its not one that we can solve on our own. Its one that needs to be dealt with in a regional context and is like one of those, you have the little one is the core and as you get vigor it looks the same. This is one of those things and so in that way we are involved in the United States in the south asia regional strategy and we are working with the neighborhood to help create and act don and enhance appreciation of the benefits of open border for goods between and among the countries in the region but particularly going to your question going to the afghanistanpakistan. At one level we financed and managed their implementing partners the construction of worldclass highways that connect the ring roads with the indus highway which essentially connects europe with china and india going through central asia afghanistan and pakistan. We have supported both governments in the creation and the trade agreement and efforts to discuss and improve that and not lamented. Thats a work in progress, a long ways to go. We were can i working with the private sector in both countries. I mentioned to times in my comments two weeks ago i was sitting with the leadership of the chamber of commerce and push our many of whom were old friends from my service there and they have ideas. They have influenced that we dont have. So working at the broader diplomatic political level working in the physical infrastructure level we have also in terms of helping create better procedures for customs and border clearance have had for years a project in afghanistan. We have one in pakistan to help with that. We cant want this more than the people who are directly involved want it and so far the collective will has led to an impasse and we hope that the result of all of what we are doing together with the various participants in the south asia region and its neighbors will lead to a viable answer to your question. It will be a major source of opportunity for people and it will also be a major linkage that will be a peacebuilder over decades. The physical infrastructure is there, the administrative support as they are, the political will is expressed on both sides but we need to have a common will to get it done. We will be a part of that but we cant be the only one. I times i think there is also a component to this that based on the hub of afghanistan serves in the position that is in the region and the stand has to depend on a diversified Transportation System to export to the region. It shouldnt be dependent on growth and shouldnt all be dependent on rail. Should that times a competition. I would like to see that and government where the airtrans rotation system is competing so if we build a noncorrupt or as little corruption as feasible and in air Transportation System that will put positive pressure in road transportation Custom Windows and all the requirements that they have to fulfill. I think thats a positive thing. At the india conference that we attended the last day of the conference it didnt get any publicity because they made after the conference started to close down. Air india have announced direct flight from delhi to kandahar, jalalabad and addition the turks now have direct flights coming in and that will create more competition but those planes may be going in full but coming back empty. But the usa is doing on the charter air cargo side cant open up a whole host of other air cargo options that maybe those economies can be improving because they are private sector driven. Companies will now want to get some of that shipment out cheaper than what it takes them to have two weeks to get into karachi or someplace. Theres a question on women. Spent women in afghanistan support traditional and nontraditional. They are nontraditional businesses that times but they are more involved with the traditional businesses like hand crafts and jewelry making and processing Agricultural Products like making jam and pickles from the agriculture sites. In part jobs for women that are homebased. If we find a market because there are more options to work at home. They couldnt find a good market to send them. It takes six months just to complete on. Then it costs 600 which is nothing if it count the materials and then you can create jobs for women by providing jewelry and basic tools that they would be able to create to use at home and of course again we need ideas only to find a market and jar making and pickles. They need packaging for their jobs to produce them and then they can bring them in the local market. The basic tools of packaging and some training for quality and hygiene to make sure that they have better products. Of course we have a very talented afghan team that are welltrained. Creating jobs that are on line based would be more beneficial for them. The girls are studying in universities that they get jobs. As i mentioned they are more comfortable working in the back office and thats where it they are looking to become a teacher or working with the government or the earth or marketing, working with finance and h. R. And the admin departments. After the university they are normally working with private and government jars. Of course in the last two years a number of jobs have decreased in afghanistan. A large amount of women are jobless. Two more questions. The lady over there and the gentleman over here. Good afternoon everyone. I am running at the structure and firm and afghanistan and engineering and construction. My question would be for investors coming to afghanistan. How much they will consider the afghan woman owned firm because so far investors who come to afghanistan know are involved and i want to know how much attention they will give to afghan women and also the percentages reduced so badly and only 2000 afghan women owned firms exist right now. Thank you. I am a student at the university university. My question were first to mr. Jeff. I would be impressed to hear your perspective on Afghan American Chamber of commerce. What would be your selling point text thank you very much. The question on women and entrepreneurs. Maybe do you want to answer that that . Okay, okay. The first question was about Women Entrepreneurs and i think it comes from a progressive change of attitude within the women and within society to be brave enough to set up a business even here is a rare thing. So many of them go bankrupt very quickly. They are the biggest source of employment anywhere. So for anyone to take on setting up a new business is a big challenge and it takes a brave soul to do that. For a woman and afghanistan to do that it takes a much braver soul and with some support. It would be probably unrealistic to expect to have a very large number of Women Entrepreneurs coming almost immediately. In that context the one initiative of which i am aware is the usaid funded promotes program. The basic concept there is that the people who are really going to solve or take to the next level the issues of gender as they apply to women in afghanistan are the afghan women themselves. The project then focuses on a group of 75,000 women who have at least a High School Education education. That is evolved a bit over the last three years and it could be someone also doesnt have a High School Education or university but basically the women who have gotten the education and have gone through all of the slings and arrows of outrageous fortune that it takes to get through school in afghanistan as a woman than to provide opera period of your tech help to them in terms of training, in terms of mentoring, in terms of getting into Civil Society, government and business to them play a significant role, not a subservient role, and society and over at period of time those 75,000 women are going not to figure out the whole equation but they will be in a good position to move it or word and alongside of that are many different initiatives. Some are supported by donors, some are private initiatives and some are government initiatives that they support groups of female entrepreneurs. There was one that recently graduated from a Business Incubator 17 Women Entrepreneurs with their businesses. Thats not transformative of afghanistan but its important. I was answering what i thought was the previous question so moving to your question your question if i might and im sure the other panels will have something to say as well. I dont think businesses calm looking for women not to put yours or other subsets that relate to things other than the capability of that partner to do the business at hand so i dont think you get very far in expecting International Businesses to come looking for womenowned Business Partners unless the women owned aspect of it is particularly advantageous to the business to be done. I have experienced in some countries in the middle east a situation where i did my business role realize the best slice of that market for partners was with womenowned businesses and business professionals because they were so far, so much more capable than their male competitors because the mail competitors already had gleaned all the good opportunities in these wonderful women and their businesses who are sitting there struggling trying to get something going and i is a foreign business person heading up a Foreign Company was able to link up with the women employees and the women businesses who were suppliers or partners in one way or another and they were so much better than the mail ones who were available to me who didnt have the hunger to do well. They expected to get the business so i think there are damages that i have seen that Women Owned Business is canned exploit but its not just because you are a woman or a woman owned business. It you have got to have something more than that in the effort we have is to create something more than that until people have those opportunities. No just had very quickly there are a number of businesses that will specific they try to encourage and support Women Entrepreneurs and areas. We currently have dean poll worker at the white house who was in charge for Goldman Sachs with a special program to mentor when Women Entrepreneurs from around the world to give them opportunities by creating experience in networks. Didnt necessarily give them a contract that created those opportunities and similarly and i was in afghanistan and greg was there too we had a number of businesses that were specifically expressing interest in supporting Women Entrepreneurs because they knew how hard it was to be and entrepreneurs and afghanistan. Number them as greg said were in markets where they knew they could sell products because there would be an attractiveness to doing that. There is also if you establish a reputation for honesty not bankrupt in doing good work that also can work in favor of a company that you created and led and there are challenges making that known finding the Networking Opportunities that let those qualities been known to others in the country. Just one comment. The way the afghan private sector economy is structured now 92 of the economy is small firms. About six or 7 as large firms and no mediumsized Industry Sectors so my recommendation would be to identify strong sustained managed Women Owned Enterprises that have been around for 10 years and a target program thats going to go in and help them become a major mediumsized enterprise. That makes them more competitive with external partners especially investors but it also makes them a better trade partner inside the country because from that mediumsized may be doing manufacturing times manufacturing of widgets for of widgets to go to india or china but within 10 years based on every model thats ever been done for export led promotion you should be able to defeat that Chinese Company on price and quality within 10 years of that subcontractor work. Thats where i think the women can have a leading role because their firms had to be more more wellmanaged. The biggest problem is that sustainability that sustainability neck gets back to what greg said they have all bunch of other things within the country close really that they deal with separate on the Business Aspect itself. So a question with private sector, basically i dont think you are a member Bar Association which im happy to have you join me because they usually give this pitch at our membership meetings the focus would be between frontier investors. Those are people that are half risk capital and want to they are a number of them in washington d. C. Investing and have asked and enterprises. Some of them 150 million in afghanistan. The kind of stuff they are in this esoteric to me but it works and theyve been in afghanistan for over a decade. Some of those frontier investors very much appeal to the pitch that if you get in now you can structure your deal much better than what you are going to be up the structure five or six years now. Secondly the government is interested in the soap into concessionary negotiations on private sector transactions scaled opportunities for frontier investors scale is important to times that they get the scale the more likely that i can make my money back faster which means a direct in the country to get my money back and my longerterm investment is great for me. Also i think frontier investors already know who the main afghan players are in the sectors they want to operate in. Their biggest problem is that they might not be able to get that Afghan Company to partner with them. Thats a different issue that we can talk about separately. Ict and agribusiness sector is my pitch would be if you focus on the regional players regional investors that have an existing operation all around afghanistan but not enough and afghanistan those players will be interesting the marketing play but they have potentially going into afghanistan. Cheaper labor access to regional transportation grids that maybe they couldnt get going anywhere else and maybe even reduce corruption levels on the pastors because now they can expedite products a different way than they could before when maybe they had to do rail to truck to an airport or Something Like that. Lastly for money because mining seems to be the cost delivery. Afghanistan has huge problems on the Mining Sector side. Part of it is the government doesnt control most of the country so as a result you are negotiating transactions where security of that investment you have to put a lot of capitol in early and equipment and early. You are not going to get an faster data unless unless theres an integrated negotiation between the National Government the Regional Governors and maybe some other players that are critical to that investment. I dont think its impossible. Has been done in other places. In this talk a lot about columbia and integrated kind of investments after they were able to get stability going there. Think their models that we can use and we should use. Bear right on time. I want to thank everybody for coming and for an excellent panel and come again to our next event. Thank you. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations] host taking us deep inside afghanistan as john sopko Inspector General for Afghanistan Reconstruction also known as cigar. Thank you for joiningng us. Remind us how your office came to be, but the role list. At first about the pleasure to be here and i admire you for putting on these three hours on afghanistan. Its our longestserving war and we need more people to focus on it and i think thats very