SOM To Focus On Revitalizing Economy: Ghani


President Ashraf Ghani on Friday night officially opened the Senior Officials Meeting (SOM) of donor countries in Afghanistan where the Afghan National Unity Government (NUG) is expected to present reports regarding commitments made during the London summit last year.

At the London summit the NUG leaders presented a reform plan to the international community regarding areas of good governance, fighting corruption, security, supporting women and children rights and the growth of the economy.

Addressing delegates on Friday, Ghani emphasized the need to promote economic growth in the country.

He said: “You will be joining a long and productive conversation on development that for more than a decade has delved into the very deepest questions about poverty, nation-building, knowledge, and the global economy.”

“Afghanistan is a conundrum. For not just centuries, but for millennia we were a central node for world trade, culture, entrepreneurship, and the exchange of ideas with the world at large. Our cities were the hubs where the caravans of Asia rested before continuing their journeys through Iran and Turkey on their way to Venice. Even as late as the 1960s, Afghanistan was the tail end of a young people’s discovery route that connected Europe to Asia,” he added.

He also said that forty years of conflict has destroyed not just a vast amount of material and lives, but also the sense of time and space that is needed to rebuild the country on a foundation that will yield the prosperity and trade that is Afghanistan’s birthright.

“Rebuilding Afghanistan is going to be a long-term endeavor. The question for this meeting is, what kinds of investment should the government and the people of Afghanistan be making and in what sort of sequence to rebuild a sustainable economy that can secure the welfare of its people?” he said.

He emphasized that eight months ago “our National Unity Government (NUG) presented an agenda for achieving self-reliance in the London Conference on Afghanistan’s Development. That strategy is being put into effect, and over the next two days we will discuss how well it is performing.”

“But to understand the Self-Reliance strategy, we need to first examine the context in which it is taking place and the theory of how Afghanistan will revitalize its damaged economy,” he said.

Ghani also said that: “My remarks tonight will concentrate on five related propositions that describe our model for building a productive and inclusive economy. All five propositions begin from one irreducible fact. Afghanistan’s productivity is very low. The fundamental development challenge for Afghanistan is how to raise the productivity of our assets, our people, and our factors of production, and to do so in a way that spreads the benefits of a market economy not just to the entire Afghan population, but to their children and their children’s children in a virtuous circle of sustainable growth.”

“The first is that we need to mobilize our assets in ways that will stimulate growth. The second proposition is that there are historical experiences both from our region and from elsewhere that can bring short and medium term increases to productivity. The third is that Afghanistan must not just be open to market development, but that it must now build the institutions that regulate markets and create the enabling conditions under which markets can allocate resources efficiently. The fourth proposition is that in countries as poor and devastated as Afghanistan, historical experience shows that state-private sector partnerships are fundamental, particularly through state purchases of public goods such as infrastructure and human capital.”

“In Afghanistan, for the next several years it will be state demand that provides the incentives for firms to form within Afghanistan and to propel the virtuous circle of recovery and growth upwards. My fifth and last proposition is that Afghanistan needs a strong state that can formulate and implement good development policy, but building the machinery of that strong state requires a fundamental re-ordering of what the government does for the economy,” he added.

On production, Ghani said that Afghanistan produces little that the world wants. “Economically, we are a country that has $400 million in exports and $8-12 billion in imports. Even if there was no Taliban ravaging the countryside, our trade imbalances would condemn us to perpetual poverty.”

He stressed that between Friday and the upcoming meetings in Warsaw and Brussels there will be a tremendous amount to discuss.

“Afghanistan is advancing along the path of self-reliance but we continue to need our partnership so that by the end of the transformation decade we will no longer be dependent on aid, but will instead have become a member of an alliance that supports democracy, protects human rights, and secures its future through trade and investment,” he concluded.

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