Monday, May 16, 2011


As Afghanistan, with the fresh encouragement given it by the death of Osama bin Laden, seeks to haul itself out of chaos, it cannot escape an observer's notice that there are many players vying to claim some sort of stake in the country's future. For the most part, this, in keeping with the trend of global integration of economies, is beneficial to the country, but must also be managed properly.

The most prominent international player would no doubt be the US, but not only because of the American combat brigades stationed there. American businesses are also viewing Afghanistan as a location ripe for investment, albeit with increased security needs; as of September 2009, there were 10712 Defense Department security contractors in the country. The fact that the Afghan economy grew by 13.5% in 2007 has assured investors that Afghanistan can be a viable business opportunity.
PepsiCo's planned plant in Afghanistan augurs well for Afghan employment, as well as the Afghan consumer products market.

That is why PepsiCo, in April 2011, signed a deal with Dubai-based Alokozay Group to manufacture and distribute Pepsi, Diet Pepsi, 7 UP and Mountain Dew in Afghanistan, via a $60 million bottling plant in Kabul. The plant, expected to come online in 2012, is estimated to create 3000 direct and indirect jobs.

But it's not just business that attracts Americans to Afghanistan. The Department of Defense Education Activity programme recruits and sends teachers to Afghanistan. Non-profit education outfits are also in the game, such as the American University of Afghanistan, which operates on the US liberal arts model and has 780 students as of 2011.The hope is that Western educational efforts will develop strong human capital in the country, as well as a generation of tolerant and open-minded youth to lead Afghanistan in future.
Afghan girls in an American run school. Focusing on education would provide better alternatives than the Taliban to Afghanistan's youth, and liberate oppressed communities like the Hazara.

Another major player in Afghanistan is India, whose efforts have been met with contempt by erstwhile rival Pakistan. Since 2001, India has given about$1.2 billion in aid to Afghanistan, in addition to undertaking several major infrastructure projects, like the construction of the Afghan parliament (scheduled for completion this year). Bilateral trade between the two countries stood at $358 million in March 2008.

The killing of bin Laden on Pakistani soil tarnished Pakistan's image in both Kabul and Washington; India, seeking to press this advantage, pledged on 12th May to bring total aid up to $2 billion, while also beginning to train Afghan police and forming an Afghan female police battalion.

The problem with India's dreams is simply that Pakistan would not like it. The fact remains that the Taliban was created, funded and armed by Pakistan to gain leverage in Afghanistan, which it hoped would then be an ally against India. After all, Pakistan never purged the Taliban on its soil until strict demands by the US. At the same time, one recalls Baitullah Mehsud's 2008 pledge to fight alongside the Pakistani government if war broke out with India. An Indo-Pakistani power struggle over Afghanistan would further destabilise the country's safety, and hence, its economic prospects.
Though Baitullah Mehsud is no more, the Pakistani-created terror network he helmed, the Taliban, continues to ravage Afghanistan.

Inevitably, China is also looking to boost its profile in Afghanistan. Chinese companies go about winning resource contracts in the country in much the same way they have been doing so in Africa. (In fact, the method is actually called the Angola model). For example, in February 2010,China Metallurgical Group Corporation won a contract to mine Afghanistan's Aymak copper mine with a $3.4 billion bid that included a commitment to build a power plant, a railway that will link the mine, the smelter and China (!), schools, roads and mosques. The deal also promised that all non-managerial staff will be Afghans in five years.
China's method of securing contract's in resource rich developing countries creates indirect GDP growth by bringing with it roads, schools and, in Afghanistan, mosques.

The fact that these countries are willing to make huge economic bets on the future of Afghanistan augurs well for that future, as well as American efforts at maintaining security in the country. Whatever the case for foreign investment, eventually Afghanistan must be strong enough to prioritize domestic investment, sales and consumption. For now though, here's to Afghanistan's future, to the continued growth of its people.