Trade, Value Chains, and Export Development in Afghanistan

Address at the Meeting with Exporters on Afghanistan’s Air Trade Corridors

• Export Growth: Expanding Afghanistan’s exports.
• Air Corridors: Using air routes for trade.
• Private Sector: Empowering exporters and businesses.
• Value Addition: Increasing processing and product value.
• Self-Reliance: Reducing dependence on aid.
• Agriculture: Strengthening export-oriented farming.
• Logistics: Improving transport and supply chains.
• Market Access: Connecting producers to global buyers.

In the name of Allah, the Most Gracious, the Most Merciful.

Respected ministers, honorable ambassadors, dear merchants, respected sisters and brothers, esteemed compatriots, and dear Mr. Ahmadi; First of all, I offer you the gift of the leader of humanity; Peace be upon you, and the mercy of Allah and His blessings!

Welcome! Welcome! Welcome in goodness!

In the first step, I extend my congratulations to the Afghanistan Chambers of Commerce, Industries, and Women. Today, we celebrate a day when one of the primary demands of the private sector institutions—reliable transport for Afghanistan's exports—has been resolved.

Now, the ball is in your court. How, how much, and with what force will you strike it? How far will you hit it? This now depends entirely on you. Inshallah, I see this strength in you; your shoulders are strong enough to hit the ball far, and Inshallah you will hit it with strength, and you will hit it continuously.

I express my gratitude to the honorable ambassadors who have been exceptionally good partners. Our fundamental appreciation is rooted in the fact that trade represents a fundamental shift in relations between a country that has suffered greatly and our international partners. Our key point is that we do not want Afghanistan to depend on international aid in the long term.

This air corridor is an example of moving from dependency to self-reliance. When goods connect us, the very nature of our relationship changes fundamentally.

For seventeen years, assistance from the international community has been generously given to Afghanistan, and we appreciate all our partners, especially the European Union, which has been one of our major partners, and the honorable ambassadors of all nations. However, the impact of that aid was not felt by the major districts that produce pine nuts, asafoetida, or fruits. Today, pine nuts in Pakistan have gone from one hundred rupees to one thousand rupees; where is it heading next? The objective is that the type of connection and relations we desire should ensure that strengthening and analyzing the market for Afghan products becomes the key point of next year's negotiations. I first thank the government and the private sector of Afghanistan; because this corridor demonstrated that when the private sector, the government, and the producers stand in one line, what people thought was impossible becomes possible.

Setting Export Targets and Building Value Chains

What should our objective be? We must set a target of two to four billion dollars in exports for dry fruits, medicinal plants, and fresh fruit. This will demonstrate that we can fundamentally transform our people's relations with the world and the private sector. In this scenario, instead of looking toward money and capital through theft—God forbid—or illegitimate means, everyone will view this as a vehicle for legitimate progress.

The second key point is that, unfortunately, the added value of everything you export is still extremely low. The value chain, which our colleagues—especially Mr. Saeed, Mr. Mohmand, and others—emphasized heavily, has not yet been established. The only difference that has occurred is that whereas you used to export asafoetida or pine nuts by land, you now export them by air with confidence. The fundamental problem of the private sector is that it has not invested in processing. Until investments are made in processing, the money will flow to others. If you make fundamental investments in processing, the money remains here, and in this regard, I truly thank you and offer congratulations that a large pine nut factory will be inaugurated in Kabul within the next two weeks, and I will come to be at your service to open it with you. But if you want the price to decrease, then the price is tied to quality, and until quality is worked upon, the price cannot be optimized in this manner.

Therefore, my demand to the private sector is that we focus on the value chain as a key priority. Our producer, like the grape producer in Herat who said to Mr. Durrani on the opening day of the exhibition: "I want to know my customer." My request is that our private sector becomes the tool that explains the customer to the producers. In this scenario, the nature of the work we have done alongside the farmer and orchardist must be fundamentally changed. The role of the Afghan woman as a producer, exporter, and processor must be a key point, and for this reason, what is needed? Because the remaining fundamental challenge is still the issue of banking inertia. Our banks are not tools for production; they are tools for collecting money. Our banks are extremely conservative; therefore, if we want to solve the problem of banking and advance payments, it is necessary to establish specific associations. Associations that can clearly explain advance payments and reliable prices to the farmer and orchardist in a transparent manner. Our expectation from international partners, alongside the commitments that Mr. Qayoumi signs, is that the type of program that strengthens the movement toward self-reliance and standing on our own feet must be placed at the top of our agenda.

Regional Connectivity and Land Corridors

Another section of this air corridor will, Inshallah, expand; but the key point is that our land corridor must also receive attention. I truly express my gratitude to all our international partners, especially our regional partners, and also our dear colleague His Excellency Mirziyoyev for opening the route to China.

We demonstrated through the air corridor that we can deliver pine nuts to China and, via air, to Istanbul. Our land corridor must become a key focus so that we can concentrate our air corridor efforts on items whose price is extremely high and whose weight is low. In this regard, if you look at the successful experience of Germany, the United States, and England at the end of the nineteenth century, they created this entire infrastructure through investment. In this direction, it is hoped that the discussion you started, Mr. Ahmadi, with the private sector tonight and continuously, will focus on how supportive associations can be created among themselves instead of competing with one another, and please clarify the role of the government.

The Role of the President as the Nation's Commercial Agent

I was in China a few years ago, in the year 2014—I have told you this story before—I kept coming back to saffron, at that time I did not see pine nuts in detail, I came back to marble, and finally one of our colleagues asked, "Are you a salesman for Afghanistan's exports or the President?" I said the duty of the President is to be the representative of the merchants and producers of Afghanistan.

I am proud to be your representative, but it is necessary that we hold hands, and Inshallah this will happen, and I also thank our international partners very much. With your permission, I will say a few words in English.

I would like to take this opportunity to thank all our partners in the central... The fundamental issue is the air corridor has shown that with little investment we can have maximum impact. Skill, scope and timing is the critical issue. We have gone from pilot now to demonstration. Demonstration effect has been established; the question now is skill. Skill to be able not to bring 6 thousand but 60 thousand. That means both air corridor and land corridor should be brought together and we should embark in a partnership that increases the skill of Afghan exports.

Expanding Scope and Building Agricultural Value

Second is scope; the scope is still very narrow. Meaning that all the key items—and we are very proud of it—the same items were being exported two hundred years ago. Whether it is asafoetida, whether it is pine nuts, or whether it is licorice. It is in the primary form. Its value is very little, so the key thing that we are looking for in the next phase of cooperation, this is in the private sector, is to be able to cooperate on the scope. Now we are focused narrowly on about ten crops. What is the key scope? We have not touched vegetables; we have not touched cut flowers.

There is a range of things that would enable us to think through. We began with established ones because it could demonstrate to everybody that it is possible. But the new skill, the new type of agriculture that we want, is going to require scientific cooperation. The use of water is going to be critical; for your information, we are investing very heavily in pipes. The government of Afghanistan is putting 18 million dollars of its own money.

Scientific Innovation in Water Infrastructure and Standards

We have a global expert, called Dr. Sargand, who has 40 papers on pipes, and he is now spending—thanks to Dr. Qayoumi and colleagues—4 to 6 months a year here. We tried Panjshir; the cost of using pipes for irrigation is four times cheaper than canals. It avoids both precipitation upwards and loss downwards.

So we would like to be able to set some targets, and the critical issue for our partners is standards. For us and you defining the standards, for us and you, so the Afghan private sector can absorb the standards and the producers focus on this. You have been very generous with us, so I would like to thank you for your assistance. But the way aid touches lives, trade does it differently.

Economic Impact on Impoverished Districts

The prime example is... 18 of the poorest districts of Afghanistan in Paktika, Paktia, and Khost are the major centers of production, and then Kapisa, Laghman, Nangarhar, and Kunar. These people did not see the connection, but with this corridor, all of them are seeing the connection. Trade is a language that we have practiced for several thousand years. Afghans really thrive on it. So on that count again, I would like to renew the call to this partnership, and Dr. Qayoumi and my colleagues will focus on it.

Government Institutional Reform and Environmental Sustainability

My last point is to my ministerial colleagues: the way they are doing business is not sufficient to generate and sustain an exponential growth rate. So to all our colleagues, and particularly I want to thank Mr. Ahmadi for thinking through this, and Dr. Qayoumi, preparing Mr. Yari, Durrani, and Karimi, so that our social programs support and expand livelihoods.

When we connect, my last request to you: a lot of these are green products, whether it is pine nuts, whether it is pistachios, whether it is almonds, or licorice or asafoetida. So carbon credits and the new environmental assistance could really provide a way. Because of this very opening of the corridor, you can ask Minister Karimi, who himself comes from Khost and was president of Khost University, people will stop cutting the trees. It is a win-win situation, and once again, thank you for your presence, thank you for the partnership. Now you have a different image of Afghanistan to connect to the pilots of your people, and I hope a significant advertisement for it, as I take pride in it. Thank you.