Assalam Alikum Warahmatullah wa Barakatuh.
Regular Protocol.
Afghanistan is at an important juncture in its contemporary history. At this historical juncture, addressing the economic problems of the Afghan people and better management of the country's economy is a priority for the Islamic Emirate of Afghanistan. Before addressing the view of the Islamic Emirate on the economy, I consider it necessary to make some introductory remarks on the country’s economic management in the past.
For the past two decades, Afghanistan's economy has been built on disproportionate amounts of foreign aid. Afghanistan's level of dependence over the past twenty years has been unbearable as the 75 percent of the government public spending was financed from external financial resources making the economic situation of the country unsustainable and unpredictable. Foreign development assistance was conditional with most of its terms being political. The aid system was ineffective in its nature, which promoted the culture of economic dependencies, increased development costs and caused widespread corruption.
A large amount of foreign aid was repatriated out of Afghanistan through affiliated contractors. During these years, the previous administration and donors tolerated corruption and continued to support unsustainable institutions and systems. Most of the small ruling groups and politicians benefited from the aid and uncontrolled corruption due to lack of accountability. Despite the influx of billions of dollars, the majority of the poor and needy people of the country became poorer and poorer. Self-sufficiency was just a slogan that the authorities of the previous administration did not want. In fact, what they wanted was to get more money from donors anyway.
The overnight collapse of the system, immediate suspension of international aids, the decline of all the 75 percent development expenditures to zero, the banking sector crisis, and most importantly closing door of multilateral development organizations are the indicator that the support of international community was completely political.
Unfortunately, the 9.5 billion offshore financial reserves of the Afghanistan has also been frozen and formal and informal economic sanctions has been imposed as well which consequently impacted the life and livelihood of the Afghan people and put hundreds of thousands of children to malnutrition in the country.
On the other hand, every change has an opportunity. Now it is the time to make the most of this opportunity to adopt new and effective economic policies. I am pleased to present today the vision and the economic transition strategy of the Islamic Emirate for Afghanistan. Based on this economic perspective: We welcome the humanitarian assistance of the international community. We are fully committed to supporting the humanitarian assistance of the UN and other donor organizations. In addition to this, we assure the full security, access, flexible policies, and enabled environment for donor community in continuing their humanitarian assistance. At the same time, we asks for the equitable, transparent, and efficient distribution of the humanitarian assistance. Afghanistan will continue to need development assistance after overcoming the current problems. However, we need to think differently about development aid.
Political and unrealistic conditions of donors are unacceptable. We never want the measure of economic dependence that causes a long-term financial sustainability crisis. We never want to sacrifice the independence of the country's economy, depending on donor’s political conditions. We do not want to create an aid-dependent economy that perpetuates dependency. What we are proposing is that foreign aid be received directly in the short term and that donors be happy to be responsible for the outcomes and impacts. The Islamic Emirate of Afghanistan will monitor this process to see if aid really reaches the people, especially the vulnerable, including women and children. We will coordinate with the international community, initiate and support projects, and present our views on progress. However, Afghanistan cannot rely on aid forever. We need an indigenous, strong and dynamic economy that relies more on domestic capacity. Our long-term goals are the economic self-sufficiency of the Afghan economy. To achieve these goals, the IEA will focus on creating a productive, vibrant, competitive, and corruption-free private sector. The role of the Islamic Emirate of Afghanistan in providing a supportive policy and legal environment will be predictable and clear. We will continue to work on regulatory simplification, investment promotion and accelerating regional cooperation. We assure our investors that once their investments are approved in accordance with the applicable law, they will no longer face political interference or demand for illegal overheads.
We will continue to focus more on improving the agriculture, banking and mining sectors, which will be further discussed at this conference. We will focus on the public sector limited on what is needed to perform the core functions of the government. Now let us look at what makes a fair and sustainable economy. First, the problems of insecurity and corruption that were poison to economic growth and development are now gone. Second, the war is over. Our country has finally calmed down. Extortion, kidnappings, usurpation of government land, which had created fear in the minds of businesspersons, are all over or under control.
Third, the unfair livelihood system in Afghanistan, which had the highest development costs in the region, is now rational and equitable and we can do more with less. Fourth, in accordance with the teachings of the holy religion of Islam, the current administration meet the needs of business and working well to remove barriers and encourage investment. At the same time, it is clear that it is not possible to implement plans and achieve them overnight. Endurance and patience are needed for us to implement our economic vision in the field of action and achieve tangible results. In continuation of our efforts in the economic and financial sphere, we are happy to hold our first economic conference on Afghanistan. In this conference, we will discuss the recent developments and exchange ideas on the important sectors of the Afghan economy including; humanitarian assistance plus, private sector development, banking sector, agriculture and mining industry. We expect that this conference will help us to receive constructive recommendations and opinions from the expertise of the valuable participants and panel discussions, and the IEA will use these recommendations and opinions for developing effective and rational development policies under the economic vision of the IEA.
Finally, I once again express my gratitude and appreciation for the presence of the esteemed guest in today's conference. Special thanks to all those involved and the organizers of the Afghanistan Economic Conference. Thank you to the leadership of the Ministry of Finance and all the esteemed staff of the Ministry and other departments working with them for their hard work in organizing this conference.
Wa minallahe Tawfiq
