Helping the Afghan economy: A view from Kabul

Here’s a response from my old hood to the item the other day about Zalmay Khalilzad, a former U.S. ambassador to Afghanistan, calling on U.S. military spending in that country to be re-directed in such a way as to stimulate the Afghan economy. He says some of the things Khalilzad mentioned already are being done:

Greetings from Kabul. To introduce myself, I’m Colonel (Canadian Army, Retired) Mike Capstick, the Country Director, Peace Dividend Trust — Afghanistan. We’re an International not-for-profit NGO, see: http://www.peacedividendtrust.org/

One of our major projects is Peace Dividend Marketplace — Afghanistan. The mission of this project is to advocate and facilitate local procurement by the entire international community. The concept is simple, keep more of the money being spent on Afghanistan in Afghanistan. On this point I couldn’t agree more with the spirit and intent of the comments attributed to Ambassador Khalilzad in your post dated 16 December.

Ambassador Khalilzad is on target when he advocates an “Afghan First” approach that leverages the impressive spending power of the US military and other international entities to stimulate the economy. He is, however, a bit out of date when he implies that the US Mission is still importing everything that it consumes.

In recent months Ambassador Eikenberry and General McChrystal (as CG USFOR-A) have issued a formal Afghan First policy that applies to the entire mission — the military, USAID, State and their contractors. This policy formalizes the Afghan First effort that the DOD contracting system has been pursuing since 2006. Khalilzad is entirely correct in his assessment of the enormous potential impact of US military spending on the Afghan economy. The Ambassador understands this as does the military — in the last FY, the DOD contracting system awarded over $1 Billion in contracts to Afghan businesses. This represents around 70% of their total expenditures, and we estimate that this will exceed the $2 Billion mark this year.

The DOD contracting system, under the leadership of the Principal Assistant Responsible for Contracting – Afghanistan, actively uses Peace Dividend Marketplace — Afghanistan’s expertise, experience ad services. For example, our Helmand office supported the Regional Contracting Center in Camp Leatherneck with the organization of a very successful business conference this past October. Since then, RCC Leatherneck has awarded over 200 contracts to local businesses, worth around $31 Million. This indicates the impressive commitment that the US military has to the Afghan First policy.

The Ambassador also recalls drinking water imported from Dubai.  He can be assured that this is no longer necessary. In 2006 Lt.-Gen. Karl Eikenberry, the current American Ambassador, initiated a focused effort to get Afghan produced water into the supply chain. Despite resistance, the CG (with the assistance of Peace Dividend Trust) made it happen and the result was the establishment of a now thriving water production company. This, in turn, spurred a number of other Afghan companies to make the necessary investments and the beverage business is now very competitive.

Water is but one example. US military spending in the construction sector has caused the entire industry to improve its quality and standards and almost all Afghan security force uniforms and boots are now locally produced.  Similar examples can be found in almost every economic sector. Finally, Ambassador Eikenberry’s leadership by example on Afghan First has inspired any number of Embassies, UN Agencies and donors to step-up their Afghan First efforts.

Thanks for using Best Defense to raise this crucial issue. Of course, much more needs to be done to build a self-sustaining economy in Afghanistan and to provide employment. Our donors, the Canadian International Development Agency (CIDA), the British Department for International Development (DFID) and USAID fund the Peace Dividend Marketplace – Afghanistan project because they recognize the importance of economic development to Afghans. The US Mission and the military also recognize this, and they have led the way in using their massive spending power to stimulate the economy and to create jobs.

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