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Russian-Afghan trade and economic cooperation gaining momentum - 5.3.2012
Russian-Afghan trade and economic cooperation gaining momentum

On the 2nd of March, the first meeting of the Russian-Afghan intergovernmental commission on trade and economic cooperation was held at the President Hotel in Moscow. After the talks, Russian Energy Minister Sergei Shmatko and Afghan Finance Minister Omar Zakhiwal signed a protocol.

“Virtually, the protocol is a document containing a programme of action that specifies basic trends and projects of our bilateral trade and economic cooperation,” Sergei Shmatko said. He spoke highly of the fast growth in the volume of trade between the Russian Federation and Afghanistan in the past year. “In 2011, the volume of trade grew by 72.5% compared to 2010, and 12 times compared to 2004,” the Russian Energy Minister said. In 2010, the turnover was $571.3 million, while in 2011, it was $984.96 million. 

The Russian Energy Minister described energy sector as a key trend in promoting cooperation with Kabul. “We consider energy area, including the creation of hydrocarbon raw materials shipping routes and power supply lines as a major trend in economic cooperation,” Sergei Shmatko said. He also pointed to Afghanistan’s transit potential saying that it would be interesting for Russia to be involved in the implementation of the TAPI and CASA-1000 projects.

On the 1st of March, the Russian and Afghan officials discussed bilateral cooperation in such areas as energy, trade, investment, industry, transport, infrastructure, agriculture, education and healthcare service at their meeting at Russia’s Economic Development Ministry.  

During the plenary session at the President Hotel, Omar Zakhiwal said Afghan people had welcomed Russia’s involvement in reviving the country’s economy, especially in the reconstruction of the facilities built by the Soviet Union. At the same time, Afghanistan welcomes Russia’s participation in the implementation of new energy and transport projects. In view of this, the Afghan Finance Minister especially pointed to the CASA-1000 project.

Omar Zakhiwal also said that Afghanistan was interested in the implementation of projects related to transport and construction. “We are ready to set special provisions for Russia’s participation in the reconstruction of the house-building factory and the cement factory in Jabal-Seraj,” Zakhiwal said and added that the Russian companies could hope for preferences in these projects.

Russian-Afghan trade turnover, according to the outcome of 2011, set a new record since the ousted of the Taliban regime in Afghanistan. In 2012, Afghanistan forecasts that the trade turnover will grow further. The Afghan Finance Ministry believes that businessmen are playing a significant role to this end. “Undoubtedly, this figure will be doubled if the government lends more support,” the Finance Minister said.

At the same time, According to Omar Zakhiwal, the volume of trade between the two countries is far less than their potential for cooperation. The Afghan Finance Minister urged Russia to support regional projects in which Afghanistan is involved. “The implementation of major regional projects is impossible without Russia’s involvement,” he said pointing to the transit capabilities of his country and the significance of this issue in promoting trade links between Southern and Central Asia.

The participants of the intergovernmental commission session said that favorable business environment and commitments by business community and public figures had played an important role in promoting trade and economic cooperation between the two countries. “Apart from government departments, the business community, first and foremost the Commercial Chambers of the two countries and the Business Council for Cooperation with Afghanistan as well as Afghan Business Centre in Moscow should play a key role. These structures are aimed at mobilizing the capabilities of businessmen in the interests of promoting mutually beneficial trade and economic ties,” Sergei Shmatko said.

The participants of the intergovernmental commission session also drew attention to humanitarian aspects. According to Sergei Shmatko, at present, about 500 Afghan students are studying at Russian higher educational establishments. He said that Russia was ready to increase the number of scholarships for the Afghan citizens in Russian universities and institutes.

As part of the visit to Moscow of the Afghan delegation, a memorandum on cooperation in reconstruction and modernization of the house building factory in Kabul was signed. The Russian President’s special representative to CCI Alexander Shkirando described the signing of the memorandum as an important step and reminded that the CCI started work on attracting Russian companies to this project several years ago. 

Afghan Ambassador to Russia Azizulah Karzai urged Russia to render assistance to Afghan businessmen working in Russia to create an Afghan Trade Centre in the Moscow region. “Our businessmen are ready to invest money in the construction of this centre,” the diplomat said calling on the Russian authorities to help them to solve the problem of getting a land for this purpose. Azizulah Karzai believes this move will make the business conducted by Afghans in Russia more civilized and transparent. Sergei Shmatko supported the Afghan ambassador’s initiative and promised to help to solve this problem.

The second meeting of the intergovernmental commission is planned to hold in Kabul in the summer 2012.

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