Afghan cabinet passes new investment law to boost reconstruction

WASHINGTON: The Afghanistan cabinet has approved a new law to protect investors’ rights as the government pushes forward with reconstruction in the war-torn country, Commerce Minister Hedayat Amin Arsala said.

"I am happy to announce that a new law on domestic and foreign investment was passed by the cabinet two weeks ago and would be enacted after the president’s signature," he told a forum in Washington, without giving a firm date for its implementation.

Arsala, also a senior advisor to President Hamid Karzai, said on Monday the law would provide "even more encouraging protection of investors".

Despite his assurance however, the Afghan government came under attack at the forum for not doing enough to help investors.

"The government of Afghanistan is the biggest obstacle for the private sector today -- the lack of capacity, professionalism and corruption and (existence) of (oudated) rules and regulations," charged Abdullah Nadi, president of the Afghan Builders Association.

He said his company had pumped in seven million dollars on apartment projects in Afghanistan over the last four and a half years. "We have not received anything from the government but obstacles and lip service," he said.

"It costs us a lot more because of obstacles government creates every day," Nadi said, directly addressing the issue to Arsala.

The minister admitted that government capacity was lacking and that there were some in the administration who refused to cooperate with and "were jealous" of the private sector".

"Unfortunately lack of capacity is a big problem," he said.

Another investor, Barrie Nadi, the president of a US food group who attended the forum, said his company’s plans to set up a 10 million dollar soya bean cultivation project was on schedule so far.

"Cultivation probably will begin in May or June," he said adding that the New York-based company Nice Blends also planned to set up a plant to process soya bean bought from the farmers.

Despite a flood of billions of dollars in aid after the collapse of the Taliban in a US-led invasion, Afghanistan remains one of the poorest countries in the world.

Arsala was here to participate in the first round of talks with US trade officials under a bilateral Trade and Investment Framework Agreement.

The agreement signed in September last year provides a mechanism to institutionalize US-Afghan bilateral discussions on trade and investment, officials said.

Through this agreement, a joint US-Afghan Council has been created to set out basic principles guiding the bilateral trade dialogue, they said.

The United States, which led the invasion that toppled the hardline Taliban government in 2001 after it refused to hand over Al-Qaeda leader Osama bin Laden for the September 11 attacks, is the biggest backer of Afghanistan’s reconstruction effort.

It leads an international coalition of about 20,000 troops hunting down remnants of the Taliban and other anti-government militants.