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Afghanistan Economic Situation

Volume 461: debated on Tuesday 12 June 2007

To ask the Secretary of State for International Development what steps the Government are taking to promote economic regeneration in Afghanistan. (141268)

DFID is contributing £9 million to the Government of Afghanistan to help boost legal private sector activity. This includes support to reduce red tape, improve the business environment, support the mining sector and encourage foreign investment. Of this, £1 million has been channelled through a Wold Bank-managed trust fund which provides risk guarantees to attract foreign investors. In the past year, this trust fund has supported three projects. These are expected to trigger over £13 million of investment, stimulate the cotton and pharmaceuticals sector and expand access to credit. This will help to further enhance private sector opportunities and regenerate the Afghan economy.

In 2003, the agriculture sector accounted for over half of Afghanistan’s GDP and, since the majority of Afghans are based in rural areas, agricultural performance is central to economic growth. Rural development is one of DFID’s top three priority areas for investment. We are contributing £7 million to the Government of Afghanistan’s national horticulture and livestock programme, which will improve incentives for private investment in these important sectors. We are also funding Government programmes to construct rural roads (£18 million), and providing access to credit (£20 million).