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Hamid Karzai’s visit to Moscow: Time for economic diplomacy - 25.1.2011
Dmitry Saveliev

Hamid Karzai’s visit to Moscow: Time for economic diplomacy

By Dmitry Saveliev, Vice-President of the Institute of Eastern Partnership

Afghan President Hamid Karzai has ended his two-day visit to Moscow on the 21st January. Although the Russian and Afghan mass media covered the visit widely, they failed to focus on several aspects of the Afghan leader’s visit.

Parliament stages an unsuccessful coup

First and foremost, the Afghan President left for Moscow when the political situation in the country was volatile. On the eve of the visit, the inauguration of the national parliamentary session was once again postponed. The head of a special tribunal investigating election fraud set up by Hamid Karzai, Sidiqullah Haqiq urged the President to postpone the inauguration of the new parliament for one month.

Clearly, the supporters of Hamid Karzai did not exclude that some MPS, who were dissatisfied with the demand by Sidiqullah Haqiq might use the absence of the President, the heads of security agencies and senior officials to destabilize the situation in the capital. Most likely, this was a reason why the Afghan government tried not to give much publicity to the visit to Moscow of the President. These fears proved to be justified. On the 20th of January soon after the President left for Moscow, a group of opposition MPs released a call urging the deputies to prepare for the inauguration of the parliament with the assistance of the United Nations and friendly states. Reports say that MPs planned to seize the parliament and declare the inauguration of the new parliament.

However, the situation was stabilized owing to the efforts by the former speaker of the parliament, Mohammed Yunus Kanuni. After his interference, the opposition MPs agreed on holding talks proposed by the officials of the presidential staff. This made it possible to avert a soft attempt to stage a coup. In view of this, experts point to the influence of Yunus Kanuni on the new parliament and the fact that unlike in other countries, Hamid Karzai could create a new political system where the opposition behaves calmly and poses no significant threat to the stability of the political regime.

New areas for Russian investment

Concerning the talks of the Afghan leader in Moscow, observers insist that although the two sides discussed a wide range of issues, they focused on promoting economic cooperation between the two countries.

After the talks in the Kremlin, Russia and Afghanistan signed an agreement on trade and economic cooperation. The head of Russia’s Chamber of Commerce and Industry Yevgeny Primakov said that Russian companies are interested in taking part in reconstruction and modernizing of the facilities build with Soviet Assistance in Afghanistan at a meeting of Hamid Karzai with the representative of Russian and Afghan businessmen at the CCI headquarters in Moscow. Afghan ministers handling relevant areas and about 20 businessmen who accompanied the Afghan President took part in the meeting.

“Trade turnover between the two countries has reached 500 million U.S. dollars,” Hamid Karzai said at the meeting and urged the Russian companies not to restrict their work only to the reconstruction of “Soviet facilities” and invest money in the Afghan economy. The Afghan leader described telecommunications, the mining industry, banking and transport as attractive areas for investment. “We must establish trade and transport cooperation between our countries as we are almost neighbours,” Hamid Karzai emphasized.

The chairman of the Russian-Afghan business council, Abubakar Arsamakov told the gathering about the activities of the council and its role in establishing contacts between Russian and Afghan businessmen. He supported the idea put forward by Yevgeny Primakov that the Russian businessmen’s readiness to be involved in the reconstruction of “Soviet facilities” in Afghanistan and emphasized that the Moscow Industrial Bank headed by him is ready to finance the reconstruction and modernization of the house building factory and cement factory in Jabal Siraj.

The Afghan businessmen presented their projects at the meeting. The head of the Afghan Business Centre, Mohammad Nadir Shah pointed to the role played by his organization in establishing contacts between Afghan and Russian entrepreneurs and the implementation of several projects.

The participants of the meeting at Russia’s Chamber of Commerce and Industry also discussed humanitarian projects. For one, the director of the State Museum of the People of East, Alexander Sedov informed about the forthcoming exhibitions devoted to Afghanistan and paid special attention to a display prepared together with the Centre for Contemporary Afghan Studies.

Oil in exchange for influence

Hamid Karzai and Russian Prime Minister Vladimir Putin have focused on promoting bilateral economic cooperation at their meeting. Vladimir Putin pointed to the growth in trade turnover between the two countries. “We are ready to work on the reconstruction of the house building factory and the construction of a cement factory,” the Prime Minister said.

The Afghan President, on his part, urged Russia to increase the supplies of oil products. “We are interested in buying more fuel from Russia,” Hamid Karzai said.

In view of this, observers noted the Afghan President’s readiness to sanction more active Russian economic and finance presence in Afghanistan, especially through the reconstruction of “Soviet facilities” and first and foremost, the house building factory in Kabul in exchange for an increase in the Russian oil products supplies to Afghanistan.


In short, the Russian and Afghan leaders at their talks in Moscow outlined the contours and set conditions of new economic partnership between Russia and Afghanistan, and this, on its part, will reset political relations between Kabul and Moscow. Clearly, besides government departments, business community, especially, Russian-Afghan Business Council and Russia’s Chamber of Commerce and Industry, will play a key role in upgrading bilateral relations.

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