The South Asia Channel

Virtuous cycles in Afghan north

Virtuous cycles in Afghan north

Driving north from Mazar-i-Sharif, in Northern Afghanistan, to the Uzbek border last week was a revelation. I first lived in Mazar in 1993, while I worked for the International Organization for Migration assisting Afghan refugees returning to northern and central Afghanistan. Back then, the roadway was decrepit and insecure, and travelers feared to veer from the roadbed due to landmines. Recently, as USAID’s senior-most representative focused on Afghanistan and Pakistan, I met with key leaders and observing the impact of USAID projects. This corridor of infrastructure and commerce, includes not only a new road, but a railroad line (Afghanistan’s first!) and new electricity transmission lines that supply cheap, reliable power to much of the north and Kabul. A new customs facility at the border is also generating greater trade – and collecting more revenue for the Afghan government.

There is a virtuous cycle of security, commerce, investment, confidence and good governance building in the north that shows what a successful Afghanistan can look like. This virtuous cycle is essential to stability post-2014, and must be reinforced and replicated. Here is some of what we saw.

First stop: the Hairatan Customs Depot. Trucks and trains from Uzbekistan first arrive in Afghanistan at the Hairatan Customs Depot, where shippers enter their data online, and government officials review their shipments and forms, determine the value of the goods and the tax rate, and begin tracking shipments to ensure they arrive safely at their destinations. With the help of USAID’s technical experts, customs officials have streamlined the process from 26 to 16 steps, cutting processing time by 40% and removing opportunities for corruption. These steps alone are estimated to have increased revenues over $7.5 million in the last year.

An increasing portion of shipments coming across the border move to the next stop — the Naibabad Railroad Depot – via Afghanistan’s first railroad. Here, shipments from Central Asia and Russia – wood, flour, steel, and cooking oil – are loaded onto trucks headed for markets and consumers in Mazar and Kabul. On average, Afghan customs officials collect $1,000 per shipment for every shipment worth $15,000 – resources that are making the Afghan government more self-sustaining. 

Down the road, at the Gorimar Industrial Park, we went to a soy processing plant and an oxygen tank production facility. With support from USAID and USDA, Afghans are processing soy beans into soy flour and edible oil and using the by-product for high-protein animal feed. We watched some of this feed being loaded for export to Uzbekistan. Next door, oxygen tanks – once only imported from neighboring countries – are now produced locally and sold to hospitals in Mazar for 40 percent of the cost just a few months ago. The oxygen factory is an Afghan private investment.

Finally, our last stop of the day – the Balkh Diary Plant, is a cooperative owned and self-sustaining business located in the center of Mazar that produces milk, yogurt, butter, and cheese. USAID has been working to increase the milk yield with local dairy producers – mostly women with 1-2 animals. These efforts have been so successful, increasing milk yields five-fold, that they now have excess milk to sell to the factory. The plant can produce 8,000 half-liter bags of milk per day, each sold for 15-20 Afghanis, and pays approximately 800 farmers to supply milk to the plant, creating a profitable enterprise that is getting resources directly into the hands of Afghan farmers and milk and export grade yogurt into the hands of Afghan consumers at higher quality and lower price.

Afghans have the capacity, will, and resources to create regional hubs of commerce that will carry the economy, fund their government, employ their youth, positively engage their neighbors, and feed their population. Problems of local governance and corruption are hurdles to this dynamic, but the primary constraint at the moment is insecurity as illustrated by the horrific and senseless bombing that targeted Eid celebrants near Mazar in Faryab province last week. Improving governance and the economic environment are essential to further progress and to attracting the private sector investment critical to sustain this momentum.

Given the inherent challenges of the transition through 2014, getting the Afghan people to see and embrace the demonstrable progress they’ve made as a society is essential. It is critical to engage the population around the vision of sustaining these investments – and the progress in the north provides an important window into what that looks like.

Alex Thier is the Assistant to the Administrator for the Office of Afghanistan and Pakistan Affairs at the U.S. Agency for International Development.