VZCZCXRO8313
RR RUEHDBU RUEHPW RUEHSL
DE RUEHBUL #0465/01 0381132
ZNR UUUUU ZZH
R 071132Z FEB 10
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC 5416
INFO RUCNAFG/AFGHANISTAN COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 02 KABUL 000465 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: EAID ETRD PGOV PBTS EINV EIND AF
SUBJECT: ACTING COMMERCE MINISTER ENDORSES PRIVATE SECTOR AND TRADE 
DEVELOPMENT 
 
¶1. (U) Summary:  In a January 31 meeting, newly-designated Acting 
Minister of Commerce and Industries (MoCI) Ghulam Mohammed Aylaqi 
told Coordinating Director for Development and Economic Affairs 
Ambassador Wayne that the Afghanistan-Pakistan Transit Trade 
Agreement (APTTA) is his "highest priority."  Ambassador Wayne urged 
continued progress on APTTA and agreement prior to the Kabul 
Conference.  He also highlighted the need to transfer MOCI land for 
customs facilities at Torkham Gate to the Ministry of Finance in 
order to strengthen trade flows and customs enforcement.  Aylaqi 
expressed support for private sector and legal-regulatory reforms 
through the USAID Economic Growth and Governance Initiative (EGGI) 
project designed during former Commerce Minister Wahidullah 
Shahrani's tenure.  Ambassador Wayne offered continued USG support 
to MoCI to promote private sector development and an enabling 
business environment.  Aylaqi sought further USG assistance from 
EGGI in: 1) policy and budget execution; 2) business registration 
and licensing; 3) commercial laws and regulations; 4) a commercial 
dispute resolution mechanism; and 5) industrial park development and 
management.  End Summary. 
 
------------------------------------------ 
APTTA, WTO ACCESSION, AND BORDERS PROGRESS 
------------------------------------------ 
 
¶2. (U) Ambassador Wayne opened the meeting by reiterating USG 
support for APTTA, citing the final communiqu from the London 
Conference which stressed the importance of completing the 
negotiations as soon as possible.  He also expressed interest in the 
next round and encouraged agreement before the upcoming Kabul 
Conference.  Responding that APTTA was his "highest priority," the 
Acting Minister requested continued U.S. support with the 
negotiations and expressed appreciation for USG technical assistance 
under the USAID Trade and Accession Facilitation in Afghanistan 
(TAFA) project.  Aylaqi also noted MoCI progress on World Trade 
Organization accession; a questionnaire was received from the WTO 
Secretariat in Geneva and MoCI anticipates submission of responses 
by mid-April. 
 
¶3. (SBU) Ambassador Wayne requested that Acting Minister Aylaqi work 
with the Ministry of Finance (MoF) to transfer land at Torkham Gate 
from MoCI to the Ministry of Finance to speed progress on building 
customs facilities that will improve customs clearance and trade 
flows.  The land is to be used for a new Customs truck processing 
area, which will facilitate trade after APTTA is signed.  Aylaqi 
responded that the processing area is a good idea, but he did not 
trust MoF to pay for the land. 
 
-------------------------------------- 
ADVANCING AFGHANISTAN'S PRIVATE SECTOR 
AND ENABLING ENVIRONMENT 
-------------------------------------- 
 
¶4. (U) The USAID Office of Economic Growth briefed the Acting 
Minister on the EGGI project, stressing that it promotes economic 
growth by emphasizing private sector development to create 
sustainable industries and jobs.  EGGI provides technical advisors 
at MoCI to advance: 1) policy and budget execution, 2) business 
registration and licensing, 3) commercial laws and regulations, 4) a 
commercial dispute resolution mechanism, and 5) industrial park 
development and management.  Aylaqi welcomed and strongly supported 
continued EGGI assistance with the following: 
 
-USAID senior policy advisor to the Minister for private sector 
development.  This position will assess and develop a roadmap for 
attracting foreign direct investment and ways to improve the 
business enabling environment. 
 
-Expanding and improving capacities of the Afghan Central Business 
Registry (ACBR).  EGGI will provide advisory and equipment 
assistance to existing ACBR offices in Kabul, Jalalabad, Mazar-e 
Sharif, and Herat, as well as planned offices in Kandahar, Kunduz, 
and other potential locations.  Aylaqi said he was committed to 
improving the ACBR and its capacity, adding that he is in the 
process of hiring a director. 
 
-Development and adoption of new commercial laws and regulations as 
recommended by international financial institutions.  EGGI works 
with the MoCI Legal Department on bankruptcy, company, contracts, 
and agency laws and amendments to the private investment law.  To 
ensure adequate understanding and implementation of laws under MoCI 
mandate, the USAID representative emphasized that the Department be 
properly staffed and financed.  EGGI assistance will provide legal 
training to MoCI and the greater legal community to ensure broad 
understanding and methods of practice. 
 
-Developing a functional and competitive Industrial Parks Authority. 
 EGGI will conduct a demand study on industrial parks in Afghanistan 
and management of the industrial parks system.  The advisor will 
provide feedback and recommendations for how to move forward based 
on international best practices.  Acting Minister Aylaqi expressed 
 
KABUL 00000465  002 OF 002 
 
 
agreement with this approach.  He said his vision includes an 
industrial park in each of Afghanistan's 34 provinces, although the 
USG largely sees this as unrealistic and suggests an assessment of 
what currently exists, followed by a phased approached targeting 
commercial centers and trade corridors.  (Comment: Afghanistan's 
institutional arrangements for overseeing Industrial Parks are split 
between the government's Ministry of Commerce Industrial Park 
Department - with nearly 200 employees - and Afghanistan's 
Investment Support Agency (AISA) - a quasi governmental institution 
with greater flexibility and dynamism.  During the summer of 2009, 
President Karzai signed a decree to establish the Afghanistan 
Industrial Park Development Authority (AIPDA), which would 
consolidate Afghanistan's parks under a new quasi-governmental 
institution to reduce confusion and forge a way ahead.  Donors are 
waiting to see how/if AIPDA will be mobilized to assume this new 
function.  End Comment) 
 
¶5.  (SBU) Acting Minister Aylaqi highlighted the need for advice and 
the importance of training, and asked for help in strengthening the 
ministry's capabilities.  With a row of senior ministry officials in 
attendance, Aylaqi presented the image of a ministry with depth, 
although how progressive these senior managers are remains to be 
seen.  Ambassador Wayne urged MoCI to execute more of its 
development budget and to take greater control over its internal 
development both in Kabul and in the provinces. 
 
------- 
COMMENT 
------- 
 
¶6. (SBU) President Karzai's first nomination for Commerce Minister 
in December 2009, Aylaqi failed to garner Parliament's support.  A 
second nominee also did not pass muster, and a third will likely be 
presented after Parliament returns from recess on February 21. 
Parliament will reportedly not approve the semi-annual budget until 
candidates for the remaining unfilled ministerial posts are 
submitted.  Should a new Minister be appointed, Aylaqi is expected 
to remain in the ministry in some capacity -- as a Senior Policy 
Advisor or Deputy Minister.  Although approaching 70 years in age, 
with limited English and educated in the era when command economies 
were in fashion, Aylaqi was receptive to legal-regulatory reforms 
and USG technical assistance.  Whether he is truly committed to 
reducing state intervention and transforming the ministry's 
state-owned enterprises, such as the Fuel Liquid Gas Enterprise 
(FLGE), is not yet known.  Conclusion of the APTTA was his stated 
"highest priority."  To truly manage the process well, however, 
GIROA needs a full-time dedicated lead.  This is currently held by 
Adib Farhadi, who is simultaneously serving as Commercial Attach in 
Australia, raising questions about how much time he is spending on 
this issue. 
 
EIKENBERRY