Remarks at the World Bank High-Level Meeting on Afghanistan

Thomas Nides
Deputy Secretary for Management and Resources 
Washington, DC
September 22, 2011

This is a week when all who care about Afghanistan are mourning the killing of former President Rabbani. But we have to think about the short-, medium- and long term all at the same time. And today we need to be clear-eyed and focused on a challenge that is just over the horizon.

For the past decade, tens of billions of dollars in security-related spending have fueled consumption and economic growth in Afghanistan, Pakistan, and Central Asia. Today, we are in a period of transition. By 2014, our goal is for Afghans to take full responsibility for their security. Since last November, seven provinces and municipalities have already begun transition.

In many ways, the growth Afghanistan has seen is remarkable, and we should not minimize the gains made over the past decade. But we are right to be concerned that these gains may not be sustainable and may prove reversible – unless the region and the international community start to take action before combat forces leave and foreign spending decreases.

As the Bank’s analysis has shown, fiscal sustainability will be a major challenge—particularly covering the cost of security forces and maintaining existing infrastructure. Without outside help, the Afghans will not have the revenue to do so. This requires immediate attention by all parties – Afghanistan, the region, and international donors.

Growing Afghanistan’s own economy will be vital to this effort. The Afghan government put forward a vision for its economic future based on increased private sector investment and expanded regional trade. I appreciate the World Bank’s continuing analysis, and their focus on encouraging the creation of “resource corridors” to promote sustainable economic development.

I know that all of us are facing difficult economic times. No one, including the Afghans, is interested in having Afghanistan be dependent on foreign assistance forever. This is a time to promote self-sufficiency. This is a moment to draw on the full potential of legitimate agriculture, light manufacturing and extractive industries. All can be sources of prosperity for the Afghan people.

As we focus on these short-term priorities, it is important that we keep our larger goal in mind. Secretary Clinton called for the development of a New Silk Road when she was in the region in July. Afghanistan would be at its heart. Many of our Foreign Ministers, including Secretary Clinton, will meet later this afternoon in New York to discuss this vision of a web of economic and transit ties across South and Central Asia.

Afghanistan’s neighbors have a critical role to play—and much to gain if we get this right. A more integrated South and Central Asia will create jobs everywhere and make the region more attractive to investors. It will increase security and build constituencies for peace.

I have been encouraged to see Afghanistan and its neighbors move in this direction. Afghanistan and Pakistan are working on the technical and financial details to implement a Transit Trade Agreement. India and Pakistan are engaged in dialogue. And next Monday their Commerce Ministers will meet with hundreds of businessmen and women who want to unlock the economic potential of trade across the Wagah (Waa-Gaa) border. In August, a quadrilateral meeting in Dushanbe endorsed the principle of regional economic integration—especially in energy. They recognized it as a means of protecting peace and prosperity.

All of this will require private sector investment. But for that, businesses need predictability. They need assurances that governments are stable, have stable relations with neighbors and will make reforms where needed to improve the investment climate. We—governments and international institutions—need to make sure our political choices increase that confidence.

That starts with a solid commitment to a secure, stable, and prosperous Afghanistan. For our part, America is negotiating a Strategic Partnership agreement that signals our long-term civil-military commitment. We know the cost of neglecting Afghanistan. We will not repeat it. This is not about long-term bases, or about projecting power. It is about supporting the sovereign rights of the people of Afghanistan. It is about finally bringing lasting peace to a young country that has spent much of the past three decades at war.

A key test of our long term commitment will be what we do with the “transition dividend,” as I call it – the savings we will see from a drawdown of coalition forces. The Bonn Conference in December is not meant to be a donor’s conference, but I hope that our countries can make a political commitment to invest a portion of our transition dividend back into the Afghan economy. We know the cost of walking away from Afghanistan. Continuing to invest now may well save us from paying a higher price down the road.

At Bonn, we should agree on a vehicle to coordinate the delivery of the transition dividend to support priorities identified by Afghan government. This could be an existing international trust fund or possibly something new with a focus on programs that promote the regional linkages that would make up a New Silk Road. I thank you for your continuing efforts to bring peace and prosperity to the Afghan people. And I look forward to your ideas.