Tuesday, May 21, 2013
Statement By H.E. Abdul Hadi Arghandehwal
Minister of Economy
Islamic Republic of Afghanistan
19th Session of the Commission on Sustainable Development
High-Level Segment Roundtable 4
بسم الله الرحمن الرحیم
We align our self with the position of the G77 and China and thank the panelists for their excellent presentations. We also express our appreciation to the Secretary-General for his Report on transportation, which will certainly play an important role for our deliberations Our gratitude also goes to Bureau of CSD-19 and the organizers of the nineteen-session of the Commission for Sustainable Development.
After more than three decades of conflict, Afghanistan faces steep challenges in the construction and restoration of its transportation sector to promote economic development and improve the living standard of its people. Afghan transportation, particularly aviation, road, and rail, are central to reconstruction and peacebuilding efforts. Throughout the peacebuilding process and in consideration of both increased population growth and the continued development of urban and rural spaces, Afghanistan’s transportation needs will greatly increase over the next few years. This growth necessitates the development of an increased infrastructure for transportation options.
The impact of 30 years of conflict on Afghanistan’s transportation infrastructure must not be taken lightly. Much of the country’s transportation infrastructure has been destroyed, leaving behind damaged roads and structures. Further, the turmoil has turned away international air carriers and other sectors from investing in or servicing Afghanistan’s transportation needs. In this regard, Afghanistan faces a number of key challenges in the development of our transportation sector. These challenges include the legacy of destruction and deterioration that has resulted from prolonged conflict, insufficient and unreliable funding for the reconstruction and development of transportation systems, and a poorly developed consulting and contracting industry.
The government of the Islamic Republic of Afghanistan’s strategic vision and goal for the transport sector is to have a safe, integrated transportation network that ensures connectivity and that enables low-cost and reliable movement of people and goods domestically as well as to and from foreign destinations. This will give impetus to economic growth and employment generation and help integrate Afghanistan into the global economy. A high priority is to have in place an efficient and viable road transportation network for achieving economic growth and poverty reduction, particularly in rural areas.
In addition, economic growth is a fundamental requirement for peacebuilding and stability in Afghanistan, which is only possible through the strategic development of the Afghan transportation sector. Currently, the government of Afghanistan is working to develop and complete a network of regional roads to connect to neighboring countries, the coordination of funding for the implementation of projects, quality control and the development of a sustained operation and maintenance of roads, organizational strengthening and capacity building of technical staff, and strengthening the role and relation of private sector in road construction and maintenance. In this pursuit, Afghanistan would greatly benefit from increased support from the international community including the transfer of technology and capacity building, especially in pursuit of sustainable transportation systems.
Afghanistan’s road network is comprised of 3442 km of regional highways, 4802 km of national highways, 9600 km of provincial roads and 17000 km of rural roads.
Key priority of the sector:
The country faces the following major challenges:
Insufficient and unreliable funding for the reconstruction and development of the transport system
Future investment plan;
Our ministry of public works has prepared a Road Sector Strategy which is cost USD 5.2 billion. This strategy envisions increasing the regional highways, national highways and provincial roads to 9000 km. mean while a special focus will give to quality control, institutional capacity development and maintenance of the roads.
Railways Survey and Design: The feasibility study of 1225 km of railways has been conducted of which;
Planned railways projects: (total 3379 km railways)
The Afghan government is also striving to build trade facilities and infrastructure in order to foster regional trade and economic linkages between Afghanistan and neighboring countries of Iran, Pakistan, Tajikistan, Turkmenistan and Uzbekistan. The government of Afghanistan has now established modernized custom facilities to mentioned neighbor countries.
In addition, significant progress has been made toward the simplification and harmonization of laws and regulation regarding transportation and trade. Particularly, 27 customs procedures have been simplified and streamlined in order to facilitate trade.
There are 47 airports. Approximately 10 of these have paved runways.
* Kabul International Airport (3500 m runway) is the nation’s largest airport and the primary hub for international civilian flights.
* Kandahar International Airport (3200 m runway) is a dual-use airport serving southern Afghanistan.
* Mazari Sharif Airport (3100 m runway) is a dual-use airport serving the northern and central portions of the country.
* Herat Airport (2600 m runway) is the primary civil airport for the western portion of the country.
* Jalalabad Airport (1800 m runway)
Afghanistan’s government priorities include the upgrading of Kabul Airport to an international airport that meets ICAO standards along with the upgrading of Herat, Mazari Sharif and Jalalabad airports to international standards.
We are trying to create an enabling environment for investment in Afghanistan’s transportation sector. Our national road and railway programs have been precisely designed to contribute to regional connectivity. The completion of various segments of railways in Afghanistan, which are under different phases of feasibility study, design and construction, will have a crucial role in strengthening cooperation and connectivity.
Statement by H.E. Abdul Hadi Arghandehwal
Minister of Economy Islamic Republic of Afghanistan
19th Session of the Commission on Sustainable Development
High-Level Segment Roundtable 4
بسم الله الرحمن الرحیم
Afghanistan aligns itself with the position of the G77 and China. We thank the panelists for their excellent presentations, and express our appreciation to the Secretary-General for his Report on mines, which will certainly play an important role for our deliberations.
Although Afghanistan is one of the world’s poorest countries, it has significant mining production potential in natural resources. Afghanistan’s mineral deposits are largely untapped and are estimated to be worth up to 3 trillion dollars according to a recent survey by the United States Geological Survey (USGS). Most of these deposits include significant reserves of iron ore, copper, cobalt, gold and industrial production metals such as lithium. Studies also suggest that Afghanistan has large deposits of niobium (a soft metal used in superconducting steel production) and other rare earth elements. The deposits are large enough to make Afghanistan a major global producer of these minerals.
The USGS also estimates that there are around 700 billion cubic meters of gas and 300 million tons of oil across several Northern provinces. Further, a survey conducted during soviet times estimated that there are more than two billion tons of high-grade iron reserves in just one deposit alone. Afghanistan’s mining potential has already attracted significant foreign direct investment flows. In May 2008, the Government signed a $3.3 billion deal with the MCC Company to explore and process Aynak copper deposits situated in Logar province. The MCC is still undertaking the pre-production feasibility study which is likely to be completed by early 2011. This investment also includes the construction of more than 600 km of railroad and a 400 MW power plant.
The Government currently receives US$20-25 million annually in mining revenues. According to IMF projections, the mining sector is expected to contribute an average of $11 billion annum over the five years between 2014/15 to 2019/20 and is expected to rise to a projected average of $17 billion per annum in the 10 years between 2020/21 to 2029/30. If managed well, the net foreign exchange and tax revenue wind fall generated by mining sector growth can be used to power overall economic growth, and to finance the delivery of social services (such as health and education) and poverty reduction programs. In 5 years time, the expected government revenue will be at least $1.5 billion annually. Sound macroeconomic policies would be employed to maximize the economic return from expected revenue windfalls from the mining sector. The Government can use additional mining revenues to build up foreign exchange reserves. This will ensure that the revenues are not all spent at once, but that they are invested in diverse income bearing assets and for the benefit of future generations. The revenues can also be used to upgrade the productive capacity of the economy (in particular exports) and the strategic growth of infrastructure for production, which includes power generation, roads and irrigation along with enhancing the quality of human resources through investment in higher education.
Achievements so far:
1. A mining law that strengthens the role of the state as “regulator” and aims to attract and retain private investment is in progress.
2. Our world class deposits of Aynak (copper), Hajigak(iron ore), Sherbegon (gas) and other potential discoveries, through our new exploration.
3. In 2006/2007, the government launched the first tender for the Aynack copper deposit. The award was granted to the MCC-Jiangxi Copper MJAM consortium.
4. The ministry of Mines is procuring an international engineering firm to monitor contractual and regulatory compliance, including environmental/social standards.
5. Establishment of a cadastre department to oversee and register issuance and maintenance of various mining titles is in progress.
6. Training and equipment is also being provided to the Department of Mines Inspection and the Afghanistan Geological survey.
7. Afghanistan now has an environmental law with requirements on the preparation and approval of Environmental impact Assessments and Social Impact Assessments.
8. The ministry of mines and the ministry of finance have developed a competitive taxation and fiscal package for mining sector investments.
9. On the transparency side, we are committed to the ELTL and we fully comply by March 2012.
Important challenges ahead:
Although some progress has been achieved, it is evident that much work needs to be done to ensure that the mining sector delivers on its potential to reduce poverty, foster sustainable economic growth, and improve the quality of life for the majority of Afghans. In that sense there are important challenges ahead: Firstly, the development of the mining sector in Afghanistan is a process that will take a longer time and relatively higher capital investment and operating cost.
Secondly, a major mine development will also require the development of infrastructure to support operations (water, power generation), capacity building, and the transportation links to domestic and international markets (roads railways, pipelines). This is well incorporated in the newly developed program called National & Regional Resource Corridors Initiative.
And thirdly, it is crucial that the Afghan government and its development partners continue on with the preparation and implementation of a set of effective policies for revenue management, benefits sharing, and public-private partnerships for infrastructure development.
Dear ladies and gentlemen,
The long term vision in Afghanistan is to develop an economically vibrant mineral sector which creates jobs, develops infrastructure, generates domestic revenue and ensures inclusive economic growth for the benefit of all Afghans. Simply put, mining in Afghanistan has the potential to be a driver of a poverty reduction and sustained growth, if managed properly.
Achieving these developments will enquire strategic actions and a long-term vision in order to create an enabling environment for private sector investments that includes field security, good governance and transparency.
The Afghan government is conscious of the resource curse challenges and has already taken important steps to address them. These steps include actions to improve the implementation of legal frameworks for effective environmental, social and fiscal regimes; the provision of training and capacity building in relevant ministries and agencies; and the overall improvement of the country’s security situation.
At the end, I would like to once again, take this opportunity to express my gratitude to the organizers of CSD 19.
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