Afghan President Hamid Karzai has been on a campaign to convince Indian investors to pour their money into one of the poorest countries in Asia. However, a Bloomberg report said some of the investors are skeptical about placing bets in the country as negotiations between Karzai and the US government on inking a security pact.
Business development manager Abhay Barhate for Asia's largest irrigation-equipment maker Jain Irrigation Systems Ltd said his embassy has already warned him about making an investment in an Afghanistan-based solar-power plan. Bloomberg said in its report that Karzai has not dispelled doubts in Barhate, and perhaps to other investors that the former's country will have security problems should all US troops withdraw next year.
Karzai's government was reluctant in signing a security pact with the US, and expressed his reasons why to political and business leaders in India during his speech. The pact, said the report, would allow business to have easy access to $3 trillion in mineral resources in the Afghan region and would set to ensure that the people of Afghanistan gets to receive aid money amounting to billions of dollars over the next ten years. 31 million people in Afghanistan live on less than $2 on average a day, noted Bloomberg. Karzai said unless US showed evidence that it has put an end to terrorism at home and that public peace talks have started with the Taliban, the security pact will remain unsigned. The Afghan president told the reporters that the two conditions are an absolute prerequisite to conclude the security pact.
In a November 29 interview, Jindal Steel & Power Ltd Ravi Uppal said, "We need to know if the Americans are going to pull out. If they are going to pull out, what are Afghanistan's assurances that our investment is protected? Steel factories are long-gestation projects. Before we do that, we need to know that our project has security and stability. Right now, we don't have that." Uppal's company plans to spend $11 billion in an iron ore mining project and a new steel plant in Afghanistan.
According to the US Defense Department, the government will be withdrawing its 48,000 forces in Afghanistan. Karzai stressed that should US withdraw its troops, it could sap his government funds for payment of local security forces, therefore hurting the economy. He said however, that he is not interested in signing right away.
Join the Conversation