US embassy cable - 05KABUL5032

UNCLAS SECTION 01 OF 03 KABUL 005032 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR SA/FO, SA/A, EB 
NSC FOR KAMEND 
TREASURY FOR APARAMESWARAN 
COMMERCE FOR AADLER 
 
E.O.12958: N/A 
TAGS: ECON, ETRD, PREL, KPWR, EAID, PGOV, AF 
SUBJECT: AFGHANISTAN (WITH UK HELP) LEADS BABY STEPS TOWARD 
REGIONAL ECONOMIC COOPERATION (EXPANDED DISTRUBTION) 
 
-------- 
Summary 
-------- 
 
1. (SBU) The joint GoA and UK-hosted Regional Economic 
Cooperation Conference was held in Kabul December 4 and 5. 
The event featured an opening address by President Karzai, 
and speeches by GoA economic ministers and regional 
delegates, who were primarily at the ministerial and vice- 
ministerial level.  Four separate working groups were 
formed to examine areas of potential cooperation.  While 
the resulting Kabul Declaration offered little in the way 
of concrete steps forward, the GoAs initiative in putting 
this conference together allowed Afghanistan to showcase 
its role as an emerging regional player.  End Summary 
 
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Speeches, Speeches, Speeches 
---------------------------- 
 
2. (U) President Karzai opened the Regional Economic 
Cooperation Conference, held in Kabul December 4-5, stating 
that Afghanistan has emerged from decades of violence and 
is now able to make a positive economic contribution to the 
region.  The legacy of the countrys troubled past, he 
said, has contributed to the region as a whole not 
realizing its full economic potential. 
 
3. (U) The conference was co-chaired by GoA Minister of 
 of 
Foreign Affairs Abdullah Abdullah and UK Minister of State 
Kim Holmes.  Attendees included regional delegations, led 
primarily at the ministerial and vice-ministerial level, 
from Russia, Iran, the Central Asian states (except for 
Kyrgyzstan, which failed to show), Pakistan, India, China, 
Turkey and the UAE.  Delegations from G-8 countries, 
international financial institutions and private industry 
representatives also attended.  The U.S. delegation 
included Ambassador Maureen Quinn, SA DAS John Gastright, 
NSC Afghanistan Director Anthony Harriman and USTDA Eurasia 
Director Dan Stein. 
 
4. (U) Three-quarters of the first day was devoted to 
opening speeches from the heads of each regional delegation 
and presentations by six separate GoA economic line 
ministries, all of which outlined their Goals and 
priorities for the conference.  Points ranged from the 
suggestion that countries should move forward to promote 
investment despite festering disputes (Minister of 
f 
Economic Cooperation, Pakistan) to a pitch for the quality 
of Tajik building materials (Deputy Minister of Industry, 
Tajikistan) to details on measures being taken to protect 
the region from Avian Flu (Minister of Health, 
Afghanistan). 
 
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Working Groups Come Up Short 
----------------------------- 
 
5. (U) The afternoon session was spent in working group 
meetings.  Heads of regional delegations attended a 
ministerial-level session entitled Strengthening Regional 
Cooperation Mechanisms, while remaining delegates 
participated in one of three working groups (WGs) on the 
following topics: Electricity Trade and Energy Development; 
Trade Facilitation and Transport; and Trade, Investment and 
Business Climate.  The WGs were asked to develop short 
lists of specific recommendations on impediments to 
regional economic cooperation in these areas. 
6. (U) The first two WGs produced 2-3 page papers with 
recommendations for consideration by the heads of 
f 
delegations.  The Electricity Trade and Energy Development 
WG focused on the importance of power purchase agreements, 
large-scale transmission projects, security for 
transmission lines, and the necessity of developing 
bilateral and multilateral agreements on hydropower 
resources.  The Trade Facilitation and Transport WG 
highlighted trucking industry reform, maintenance of 
existing transport infrastructure, and better border 
management. 
 
7. (SBU) The Trade, Investment and Business Climate WG did 
not produce a paper, held back by heated discussions on 
issues such as dumping, Pakistani customs, corruption and 
business visa facilitation.  It agreed only that these 
issues required further dialogue and solutions. (Comment: 
Consensus among Mission delegates was that all WG 
discussions were general, Afghanistan-focused, and lacking 
in active participation by representatives from regional 
countries. End comment.) 
 
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Kabul Declaration 
----------------- 
 
8. (SBU) Day two began with a report on the discussions 
that took place in each WG and the ministerial session. 
The plenary then broke to allow for final deliberation on 
the text of the conference paper.  The resulting Kabul 
Declaration is a three and a half page document with an 
introduction affirming participants basic commitment to 
mutually beneficial regional economic cooperation and 
sections containing Noted, Urged and Decided points, 
summarized below: 
 
--Noted-- 
 
-- Trading power through Power Purchase Agreements and 
accelerating construction of transmission infrastructure is 
of mutual benefit and merits urgent consideration.  Steps 
should be taken to efficiently use the regions hydropower. 
 
-- Opportunities for improved cooperation and management of 
regional water resources exist. 
 
-- Countries should examine ways to create, develop and 
maintain inter-continental transit routes, selecting the 
most promising and prioritizing investments accordingly. 
 
rdingly. 
 
-- Countries will encourage and facilitate regional 
transportation of energy resources. 
 
-- Countries will seek to bring together systems and 
procedures to facilitate cross border movements of goods 
and services and strengthen border management. 
 
--Urged-- 
 
-- That regional organizations avoid overlap and 
duplication of effort in their programs through improved 
coordination. 
 
--Decided-- 
 
-- The short term focus for cooperation should be on 
practical projects in the fields of energy, transport and 
trade for which there is high-level political commitment. 
 
-- Bilateral WGs with Pakistan and Iran will be established 
for the Kabul and Hari Rood/Helmand water systems and a 
multilateral WG with the Central Asian countries for the 
Panj-Amu Darya systems. 
 
-- Participant countries will pursue improved mechanisms to 
combat narcotics within regional organizations. 
 
-- Participant countries are encouraged to prepare concrete 
proposals on improved border management for the upcoming 
Doha II Conference. 
 
-- Participant countries will meet again in nine months to 
review progress on these discussions, with the GOA taking 
the lead for follow-up. 
 
-- In preparation, national focal points will be created to 
help identify, evaluate and implement regional initiatives. 
 
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Comment 
------- 
 
9. (SBU) The conference, while short on substance, did 
reaffirm participant countries overwhelming support for 
the basic principles of regional economic cooperation and 
set the stage for more specific negotiations during 
upcoming conferences.  That the GoA chose not to include 
conference participants from outside the region (except the 
British), itself leading the conference discussions  of the 
Kabul Declaration, allowed Afghanistan to emerge somewhat 
as an independent regional player in its own right. 
 
10. (SBU) The GoA has expressed its commitment to take 
concrete steps that will facilitate improved regional 
economic cooperation, as outlined in the Interim Afghan 
Development Strategy.  Furthermore, simply co-hosting this 
event was a worthwhile capacity building exercise for the 
GoA and Kabuls ability to organize such a high-level 
conference on relatively short notice is, in and of itself, 
a sign of this citys economic progress.  The Embassy will 
follow up on conference outcomes, most notably proposals to 
transport power from Kyrgyzstan through Tajikistan to 
Afghanistan. 
 
Neumann 
n