CFC Afghanistan Review Newsletter, 07 February 2012

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  • 8/2/2019 CFC Afghanistan Review Newsletter, 07 February 2012


    C I V I L - M I L I T A R Y F U S I O N C E N T R E

    Comprehensive Information on Complex CrisesAfghanistan Review

    07 February 2012Week 06

    Economic Development

    Governance & Rule of Law

    Security & Force Protection

    Social & Strategic Infrastructure

    The Civil-Military Fusion Centre(CFC) is an information andknowledge managementorganisation focused on improvingcivil-military interaction, facilitatinginformation sharing and enhancingsituational awareness through theCimicWeb portal and our weeklyand monthly publications.

    CFC products are based upon andlink to open-source informationfrom a wide variety of organisations,research centres and media outlets.

    However, the CFC does not endorseand cannot necessarily guaranteethe accuracy or objectivity of these


    CFC publications areindependently produced by

    Knowledge Managers and donot reflect NATO or ISAFpolicies or positions of any other


    The CFC is part of NATO AlliedCommand Operations.

    For further information, contact:

    Afghanistan Team

    The Afghanistan




    This document provides a weekly overview of developments in Afghanistan from 01 February 06

    February 2012, with hyper-links to source material highlighted in blue and underlined in the text. For

    more information on the topics below or other issues pertaining to events in Afghanistan, contact the

    members of the Afghanistan Team, or visit our website

    Economic Development Steven A. Zyck steve.zyck@cimicweb.orgfghanistans economy could face a serious downturn as foreign security and aid

    spending dries up in the coming years, reports The New York Times. The World Bank

    predicts that aid to Afghanistan by 2018 will be 10% of what it is today. One expert

    told The New York Times that Afghanistan currently has a bubble economy which is in the

    process of deflating, costing thousands of Afghans their jobs and livelihoods in the process.Many Afghans, including many who repatriated to Afghanistan after 2001, are preparing to

    close their businesses, sell their property and depart the country. Productivity at local factories

    is reportedly declining, and demand for foreign cars is plummeting. Property values, which

    rose rapidly in recent years, are deflating. In addition, The New York Times says that the

    Afghan government has had a hard time supporting national industries. Now that the Afghan

    army is responsible for purchasing a portion of its own supplies, they have begun importing

    cheap Chinese and Pakistani boots for its soldiers rather than buying them from their former

    Afghan supply company.

    Amid concerns about reduced foreign spending in Afghanistan, the United States Agency for

    International Development (USAID) signed an agreement to provideUSD 800 millionto the

    Afghanistan Reconstruction Trust Fund (ARTF), according to Tolo News. The funds are

    intended to support agriculture, health, training and reconstruction. This grant is part of a move

    by USAID to provide a significant amount of its aid to the Afghan government or through

    funds, such as the ARTF, which support the governments operations and priority programmes

    In the past, USAID has provided only 5% of its aid to the ARTF but is aiming to provide 35%

    of its assistance through the fund in the future. This may have implications for the Afghan

    economy, according to a 2009 report from Peace Dividend Trust (PDT). The report found tha

    funds spent through the Afghan government were much more likely to benefit the loca

    economythan funds spent through foreign companies and non-profit organisations.

    A representative of Afghanistans Carpet Association told Tolo News that carpet production in

    Afghanistan hasfallen by 70%over the past two years. The high cost of raw materials and the

    lack of weaving facilities are cited as two major causes of the decline. While the Ministry of

    Commerce and Industries (MoCI) says that it has built industrial parks with carpet production


    To Our ReadersYou will note that this week the Afghanistan Review newsletter includes

    four rather than six sections. The CFCs Afghanistan Team will now be divided amongst the

    following sectors: Economic Development, Governance & Rule of Law, Security & Force

    Protection and Social & Strategic Infrastructure. Socio-cultural development issues will now be

    addressed within this final sector given the inherent linkages between infrastructure (e.g.,

    schools and clinics) and the services provided through them (e.g., education and healthcare).

    Humanitarian topics will be addressed in special sections as humanitarian crises or issues

    emerge. We hope that this approach will help to draw particular attention to such issues and

    stories. This shift does not reflect a diminished commitment to either socio-cultural

    development or humanitarian needs. Thank you for reading. The Afghanistan Team$_Twice_Report_0709.pdf,,contentMDK:20152008~pagePK:141137~piPK:217854~theSitePK:305985,00.html,,contentMDK:20152008~pagePK:141137~piPK:217854~theSitePK:305985,00.html,,contentMDK:20152008~pagePK:141137~piPK:217854~theSitePK:305985,00.html$_Twice_Report_0709.pdf$_Twice_Report_0709.pdf$_Twice_Report_0709.pdf$_Twice_Report_0709.pdf$_Twice_Report_0709.pdf,,contentMDK:20152008~pagePK:141137~piPK:217854~theSitePK:305985,00.html
  • 8/2/2019 CFC Afghanistan Review Newsletter, 07 February 2012


    07 February 2012 Page 2

    facilities inNangarharandFaryabprovinces, Tolo News reportedly found that the Nangarhar facility had not yet been constructed

    despite the fact that funding was allocated three years ago. In addition to domestic factors, the low value of the Pakistani rupee relative

    to the afghani is also contributing to a downturn in the Afghan carpet industry. Pakistani traders had previously purchased Afghan

    carpets but now do so less frequently given that, in rupee terms, Afghan carpets have become more expensive.

    Several mining articles emerged this week. According toMining Weekly,Kilo

    Goldmines, a Canadian firm that won the rights to one of the four blocks at

    theHajigakiron ore deposit late last year,will soon complete related contract

    negotiations with the Afghan government. Kilo plans to spend two years

    exploring its blocks followed by a two-year feasibility study. Accordingly,

    extraction at Kilos Hajigak block would not begin until 2016, which is onpar with the anticipated start date for a consortium of Indian companies which

    won the rights to the other three blocks of the iron ore deposit in central

    Afghanistan. Many of these same Indian firms are also planning to bid for the

    rights to gold and copper deposits in four Afghan provinces, says Reuters.

    The Afghan Ministry of Mines (MoM) has requested expressions of interest

    from mining companies or consortia by 09 March.

    Some truck drivers and business owners in Mazar-e Sharif told the Institute

    for War and Peace Reporting (IWPR) that new pollution-control measures

    have hindered their livelihoods. Authorities have forced brick kilns and other

    factories to relocate


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