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Faster growth to stamp out Afghan opium

Naderi says the Govt is trying to implement schemes to allow farmers to grow more value-added crops.

india Updated: Jan 31, 2006 12:58 IST

Faster economic growth and more foreign aid are crucial to give Afghanistan's poor farmers alternative revenue sources to the growing of opium, a senior official said in an interview on Monday.

Afghanistan, emerging from 25 years of conflict, provides almost 90 per cent of the world's opium. The opium economy, which the authorities want to wean farmers away from, is believed to equal half the country's gross domestic product.

"We have a huge challenge that basically economic growth has to be higher, much higher than otherwise, to accommodate a reduction in the illicit economy," said Ishaq Naderi, senior economic advisor to President Hamid Karzai.

"Seldom has this phenomenon occurred in a very poor country -- our case is different from Colombia which has a stable and very large formal sector," Naderi said on the sidelines of an investment conference. "In Afghanistan, most of it is informal."

Afghanistan's economy is projected to grow more than 10 percent this year but most people live in dire poverty and opium cultivation is seen by farmers as the most lucrative option.

Gross domestic product is growing from a very low base, just $4.7 billion in 2004.

Naderi was speaking on the eve of a two-day donor conference on Afghanistan. The Financial Times newspaper said at the weekend that President Karzai would ask the international community to commit $4 billion more to fund next year's budget.

Naderi said the government was trying to implement schemes to allow farmers to grow more value-added crops, instead of the usual alternative of switching to wheat and grain cultivation.

"We are looking at crop substitutions, orchards are one example but the idea is to encourage agro-processing facilities which will provide employment and boost income," he said.

"The point I want to make is the experience of Afghanistan is worth the attention of the world."

He echoed Karzai's appeal to donors to step up aid.

"The magnitude of the reconstruction and creating new political and social institutions is very costly," he said.

"Not only are we addressing economic development and related matters but also security and installing a democratic system. All this has to be done simultaneously and it costs a lot of resources, time and attention."

While three-quarters of the Afghan budget comes from aid money, Naderi forecast this would fall to 50 per cent in five years.

Over 18,000 US troops are helping Afghan government forces battle insurgents and also to tackle the opium business which many analysts say helps to fund terrorism.

First Published: Jan 31, 2006 12:55 IST