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Afghanistan courts business to stabilize after war

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NASR UL HADI | June 28, 2012 10:10 AM EST | AP

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NEW DELHI — Afghan officials appealed to foreign companies Thursday in an effort to attract corporate investment to help stabilize their country after more than a decade of war.

A delegation led by Foreign Minister Zalmai Rassoul courted companies based in the United States, Europe, India, China, Japan, Saudi Arabia and other countries at a conference in New Delhi.

"We plan to gradually reduce our reliance on international assistance through private sector-led growth," Rassoul said.

More than 90 percent of Afghanistan's 2011 budget was funded by foreign donations.

Rassoul played down security concerns for after NATO's planned military drawdown in 2014, saying volatile regions represent only a small part of the resource-rich country.

The meeting Thursday was part of a wider effort to open Afghanistan to international markets, with a donors conference scheduled for next month in Tokyo expected to secure financial commitments to Afghan security forces and the government.

India, encouraged by the United States, has recently increased its role in post-conflict Afghanistan, including pledging to train police forces.

Indian Foreign Affairs Minister S.M. Krishna acknowledged the risks of investing in Afghanistan, which has almost no infrastructure and is still besieged by violence. But he urged investors to help play a part in stabilizing the country for regional security.

The planned departure of U.S.-led forces should not be allowed to "result in a political or security vacuum that will be filled by extremists," he said.

For several years, companies have been scrambling for access to Afghanistan's minerals and fossil fuels, estimated to be worth about $3 trillion, according to the Confederation of Indian Industries, which organized Thursday's event.

China is digging copper mines and planning oil wells and refineries in the country. An Indian consortium recently won the rights to exploit Asia's largest iron ore deposit in the central Afghan region of Hajigak.

Mining accounts for 20 percent of Afghanistan's gross domestic product, and is expected to grow to as much as 45 percent by 2024.

Agriculture is another target area, Kabul-based investment analyst Greg Aasen said, as it needs little investment upfront with a ready workforce in place.