Military

DATE=2/26/02

TYPE=CORRESPONDENT REPORT

NUMBER=2-286887

TITLE=AFGHAN ECON (L-O)

BYLINE=GARY THOMAS

DATELINE=ISLAMABAD

CONTENT=

VOICE AT:

INTRO: At a recent conference in Tokyo, donor countries pledged four-point-five-billion-dollars worth of aid for Afghanistan to rebuild its shattered infrastructure. Afghanistan's finance minister says the flow of promised international aid has been limited, but he says that is partly Afghanistan's fault. Correspondent Gary Thomas reports from Islamabad.

TEXT: Afghan Finance Minister Hidayat Amin Arsala told reporters in Islamabad that the international community has been a bit slow to follow up on its pledges - although he could not say exactly how much had been disbursed. But he says the delay is understandable, given Afghanistan's lack of organization.

/// ARSALA ACT ///

So right now we are satisfied that things are coming or will come. But if you ask me exactly how much disbursements there have been, obviously these have been relatively limited. But that is partly because we have to be organized in order to absorb it.

/// END ACT ///

During a brief visit, Mr. Arsala met with President Pervez Musharraf and senior Pakistani officials to discuss trade and investment between the two countries.

Mr. Arsala spoke of Afghanistan as a new gateway to Central Asia. He said there might be rail and road links through Afghanistan to Central Asian nations, and perhaps oil and gas pipelines as well.

/// ARSALA ACT ///

We hope that Afghanistan will be able to serve as a transit route for Central Asia. So in that context, again, we hope to be able to provide Pakistan, and South Asia in general, with transit routes to those markets.

/// END ACT ///

But that grand vision is years away from fruition. Decades of war and civil strife have left Afghanistan with virtually no infrastructure. Everything, from roads to telephone lines, to electricity grids to rail lines, must be rebuilt.

There is also concern about security. Mr. Arsala said work is well underway to establish an army and national police. But, he added, international peacekeepers are still necessary.

/// REST OPT ///

But, on a less ambitious level, Pakistan and Afghanistan agreed to step up trade links.

Pakistani Finance Minister Shaukat Aziz said trade is being deregulated. Pakistani goods will compete in Afghanistan's fledgling market economy, he said, and trade can be in either Pakistani rupees or U-S dollars.

/// AZIZ ACT ///

We have, sir, deregulated the trade. We have abolished the permit system. There is no restriction also on which currency the trade is conducted in. It is totally deregulated. We want our private sector to compete, as the honorable minister has just said, on price and quality and timeliness and reliability. And from the government side, we want to facilitate in every way possible.

/// END ACT ///

Mr. Aziz said a third border crossing point will be opened for the flow of goods between Afghanistan and Pakistan. (SIGNED)

NEB/GPT/RAE