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Afghanistan: Economic Opportunities

Volume 686: debated on Wednesday 8 November 2006

asked Her Majesty's Government:

What new and significant economic opportunities they and other NATO members have identified in Afghanistan; and what steps they are taking to assist in their exploitation.[HL8090]

Mining of Afghanistan's natural resources such as coal, gas and minerals represents a significant economic opportunity over the medium and long term. DfID, the US and the World Bank have provided support to help the Government of Afghanistan develop this sector. DfID provides £3.85 million in technical assistance to the Ministry of Mines and the Afghan Geological Survey to help build institutional capacity to manage these resources and attract foreign investment.

DfID provides £1 million to the Afghanistan Investment Guarantee Fund (AIGF)—a World Bank- administered trust fund that pools funding from the Asian Development Bank and Germany. This is an innovative mechanism which seeks to help entrepreneurs overcome the risks involved in investing in fragile and post-conflict states. To date, $18 million in foreign investment has been leveraged for an agri-business project in northern Afghanistan.

DfID also provides funding for research on other economic opportunities that create jobs andwealth. For example, the Afghanistan Research and Evaluation Unit (AREU) has explored the prospects for trade and enterprise in sectors such as carpets, raisins, and construction materials.

DfID is providing £3 million for research into potential agricultural livelihood options for rural Afghans. The fund helps identify local, national and international market opportunities for high-value alternative crops, including an organic export feasibility study. DfID also provides £3.7 million for new and innovative ways for farmers to make a living in Eastern Hazarajat (one of the poorest areas in Afghanistan), including apricot drying, poultry, honey bee keeping, tailoring and weaving, silk and cashmere wool production and the introduction of fruit tree nurseries and greenhouses for vegetable production.