Indian External Affairs Minister S M Krishna inaugurated the Delhi Investment Summit on Afghanistan yesterday. He said India is making efforts to promote investment in Afghanistan. The Summit organized by the Confederation of Indian Industry and both governments. Representatives of firms from over 40 countries participated.
S M Krishna said a narrative of opportunity to counter the anxiety of withdrawal, uncertainty, instability and foreign interference is needed to be presented. He added that the military drawdown should not result in a political or security vacuum that will be filled by extremists once again.
He further said that a major investment summit on Afghanistan when international troops are withdrawing by 2014 and terrorism continues to take a toll of lives, may at first sight appear counter-intuitive. Afghanistan may not be the easiest destination to sell to an investor. But India has ventured to do so.
With the rush of the US and NATO withdrawal strategy, there is an overall feeling of uncertainty about the future of stability in Afghanistan not only among the business and investor community, but also ordinary Afghans. Besides the uncertain security situation on ground, decades of war and conflicts in Afghanistan has stamped the mark of a general insecurity all-time-and-everywhere for outside world, promoting an unfavorable picture of the overall situation in the country.
Though some parts of the country are constantly under insurgent threats and militancy, but during the last ten years economic development in Afghanistan has quite hopeful and successful. There are over about 10,000 companies and firms, of which about 300 are owned by women.
According to the World Bank's "Doing Business" report, Afghanistan ranks 30th among 183 economies when it comes to the ease of starting a business, requiring four procedures and seven days to register a firm. Business has boomed. The fast growth of sectors like telecommunications, finance and banking has been at par with many regional countries, despite our decades of instability and wars.
With the developing picture of uncertainty regarding stability after 2014, already the capital flight from Afghanistan has started. Cash are being flown out of the country in gulf countries. Local Afghan investors and business community are first among those taking their capital out of the country. In such an environment, it is hard to sell the idea of investment in Afghanistan to foreign companies.
India as a strategic partner and friend of Afghanistan has been making meaningful contribution in our reconstruction and development. The Delhi Investment Summit is an important event. India has relaxed customs duties for Afghanistan's exports as part of an initiative for Least Developed Countries in the SAARC.
S M Krishna rightly urged the investment community to act together in the interest of the collective security of Afghans and the international community. He said India encourages its industries to venture into Afghanistan in numbers together with Afghan partners.
Foreign Minister Zalmai Rassoul said it is true that the security situation in Afghanistan is not ideal, but it is also a fact that insecure areas make only a small part of the country. He added that the situation is improving. He rightly said that stability and security have a direct link with prosperity. If investors take steps to invest in Afghanistan they can usher in a more hospitable business climate.