VZCZCXRO2568
PP RUEHIK RUEHPOD RUEHPW RUEHYG
DE RUEHBUL #3088/01 3360423
ZNR UUUUU ZZH
P 010423Z DEC 08
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC PRIORITY 6262
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC 0694
RUCNAFG/AFGHANISTAN COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RUEKJCS/OSD WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RHMFIUU/HQ USCENTCOM MACDILL AFB FL
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 02 KABUL 003088 
 
DEPT FOR SCA/FO, SCA/RA, AND SCA/A 
DEPT PASS AID/ANE 
DEPT PASS USTR FOR GERBER AND KLEIN 
DEPT PASS OPIC FOR ZAHNISER 
DEPT PASS TDA FOR STEIN AND GREENIP 
USOECD FOR ENERGY ATTACHE 
CENTCOM FOR CSTC-A 
NSC FOR JWOOD 
TREASURY FOR LMCDONALD, ABAUKOL, BDAHL, AND MNUGENT 
OSD FOR SHIVERS 
COMMERCE FOR DEES, CHOPPIN, AND FONOVICH 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958 N/A 
TAGS: EIND AF
SUBJECT: AFGHANISTAN: AMBASSADOR WOOD'S MEETING WITH THE AFGHAN 
CHAMBER OF COMMERCE AND INDUSTRIES 
 
¶1. (U) Summary: Ambassador Wood met November 23 with leaders of the 
Afghan Chamber of Commerce and Industries (ACCI) for the first time 
since its reorganization.  He underscored the central role 
Afghanistan's private sector must play in long-term, sustainable 
development and urged ACCI to become a unified voice for Afghan 
business.  While noting progress and the supportive role of the 
U.S., both sides agreed that much work remains ahead, particularly 
in energy, finance, anti-corruption, taxation, and commercial and 
financial law.  ACCI members complained about their treatment by the 
GIRoA and criticized the international community for insufficient 
consultation with Afghans on foreign assistance.  They also 
requested the Embassy's help in obtaining business visas and greater 
access to foreign contracts for Afghan business.  End summary. 
 
 
¶2. (U) On 11/23/08, Ambassador Wood met for the first time since 
their election with the Board of Directors of the reconstituted 
Afghan Chamber of Commerce and Industries (ACCI) at the request of 
Mahmood Karzai, ACCI vice-chair and younger brother of President 
Hamid Karzai.  The new ACCI is the result of the recent merger 
between the Afghanistan International Chamber of Commerce and the 
former ACCI, which had been headed by Mahmood Karzai and Kabul Bank 
chief Sherkhan Farnood.  The first election of the Board of 
Directors of the merged chamber took place last summer, electing 21 
members by region and Farnood and Karzai again to positions of 
leadership, as chairman and first vice-chairman, respectively. 
 
¶3. (U) In an exchange of views with the entire board, Ambassador 
Wood emphasized that the private sector, not the international 
community, will ultimately assure long-term economic growth and 
development in Afghanistan.  Effective anti-corruption measures, 
affordable credit, reasonable taxes and fees, and good dispute 
settlement mechanisms, are key elements to a business-friendly 
environment, he said.  The ACCI must lobby hard for greater 
transparency and predictability to attract greater foreign 
investment.  The pending commercial and financial laws are crucial 
underpinnings to private sector development, and he urged the ACCI 
to help make their rapid enactment a priority.  He pledged the 
Embassy's continued advocacy efforts with Parliament and the 
administration regarding these laws. 
 
¶4. (U) Ambassador Wood noted the many positive signs of democracy 
and a revitalizing economy he had seen across the country: working 
street lights and bustling traffic in Kabul; prosperous rice farms 
in Kunduz; a women's shura in Badakhshan.  He cited the billions of 
dollars the U.S. has contributed so far to Afghan reconstruction and 
expressed optimism in particular about impending improvements in the 
energy sector.  The third turbine recently delivered to the Kajaki 
hydropower plant and additional supplements over the next 12 months 
promise to provide an additional 50 megawats of power to the 
southern region and decrease reliance on inefficient and expensive 
diesel-powered generators. 
 
¶5. (U) Board members acknowledged the key role the U.S. has played 
in progress to date but stressed the continuing drag that 
insecurity, corruption, high taxes, poor access to credit, and, in 
particular, power shortages place on the private sector.  They 
complained of the bureaucratic complexity of registering a business 
in Afghanistan and pointedly criticized the Afghan government for 
what they called a Soviet-style distrust of the private sector and 
desire to control the economy from above.  (Note: Last month USAID 
launched a Central Business Registry reform, which consolidates 5-6 
stops into one at the Ministry of Commerce for registering a 
business.) 
 
¶6. (U) The Chamber's CEO, a non-elected executive, complained at 
 
KABUL 00003088  002 OF 002 
 
 
length about the government's lack of "respect" for the ACCI and 
asked for the Embassy's intercession in an ongoing property dispute 
between the GoIRA and the ACCI dating from the time when ACCI was a 
quasi-governmental entity.   He also complained about a lack of 
coordination among international donors and argued that some of 
their aid was ineffective because Afghans had not been consulted 
beforehand, and he offered ACCI's help to head off such problems in 
the future.  He and other Board members asked for the Embassy's help 
in gaining greater access to foreign contracts, both for income 
generation and capacity building.  In addition, they asked for the 
Embassy's help in obtaining visas for Afghan businessmen.  To 
applause, the Ambassador reported that the Embassy would begin 
accepting business visa applications in February. 
 
¶7. (U) In closing, the Ambassador noted that despite the very real 
obstacles facing Afghan business, for the first time in Afghan 
history the free market is enshrined in the constitution, a 
remarkable and lasting achievement.  Greater cooperation with 
regional partners, Pakistan in particular, remains a key goal, and 
all should be encouraged by Pakistan's growing acknowledgment of the 
importance of a safe and open passage between Jalalabad and 
Peshawar.  If Pakistan and Afghanistan continue to cooperate 
economically, they can realize their potential to be the gateway 
between South and Central Asia.  Finally, Ambassador Wood urged the 
ACCI to seize the opportunity provided by their merger to become a 
strong and united voice for Afghan business.  They must work every 
day to make their voice heard and to prove their voice is worth 
listening to by being serious and law-abiding corporate citizens. 
They need to lobby the government and parliament for their common 
interests and find an advocate within the government who will take 
their part without trying to make business decisions. 
 
¶8. (SBU) Comment:  ACCI talks a good game, but has shown few signs 
so far of moving beyond the narrow interests of its leadership.  The 
Embassy has continued to urge the ACCI to lobby for market-oriented 
reforms, in particular the passage of pending financial and 
commercial laws key to private sector development.  While there has 
been progress on some of these laws -- most recently the Mortgage 
Law, passed by the lower house of the National Assembly on November 
15 - ACCI has not to our knowledge played an active role.  For the 
moment, ACCI appears less interested in what it can do for 
Afghanistan than in what the government and donors can do for it. 
The Embassy, including USAID, will continue to work with ACCI and 
prod it toward greater professionalism.  Progress, however, is 
likely to be incremental, and the ACCI, sadly, provides a fairly 
good mirror of local attitudes with respect to private initiative. 
 
 
DELL