Islamic Republic of Afghanistan - Enhanced Integrated Framework ...

investment opportunities cannot be the responsibilityof only one or two agencies or ministries,but must entail a concerted effort by theentire Government. Efforts to encourage privatesector investment also require the understandingand cooperation of the donor community.This aspect of the private sector developmentstrategy is reflected in many of the sectorstrategies set out below. For example, it representsa major reform in the energy sector designedto attract private investment into thepower sector and development of energy resources.It is the basic foundation for developmentof the mining sector. It plays an importantrole with respect to the efforts to makemore efficient use of state owned land to stimulatecommercial agriculture. The Governmentwill seek to attract medium and large scale agriculturalproducers and processors to invest incommercial agriculture in order to increaseemployment and market opportunities in ruralareas and to develop export markets for highervalue Afghan products. It is reflected in innovativeefforts to try and use public funding tosupport and improve private provision of educationand health services. There is scope forusing donor funding to develop a vibrant andcompetitive domestic private construction industryin the projects being implemented byGovernment ministries.Component 3: Concerted private sectorinvestment promotionThe third component of the strategy involvesconcerted efforts to promote investment fromforeign and domestic sources, including fromthe Afghan diaspora. After a long period ofisolation, Afghanistan must rebuild commercialties and demonstrate that there are considerableprofitable opportunities for investors inthe country. The Afghanistan Investment SupportAgency will play a central role in thisprocess and will be strengthened. But the responsibilityfor promoting increased investmentwill be a government-wide task and willbe an integral part of all projects and programsundertaken as a part of the ANDS.The objective is to make known to potentialinvestors the opportunities available in Afghanistan,to ensure them that the Governmentrecognizes the importance to the country ofincreased private investment and to work withpotential investors to assure them that theirinvestments will not fail due to unpredictableand unfavorable changes in the tax environmentor policies towards private investors.This needs the full support of the internationalcommunity. This can be done through focusedefforts by donors to create conditions necessaryfor increased private investment in the country.It can also be done by bilateral donors usingtheir relationships with firms in their owncountries that are potential investors in Afghanistanto make known the great importancethe Government is now placing on the need toexpand private sector investment and operationswithin Afghanistan.ENERGYRole of the Sector in ANDS:Energy is a critical input to economic growth.The ANDS strategic vision and goal for the energysector strategy is: “An energy sector thatprovides drivers of growth in the economywith long term reliable, affordable energybased on market-based private sector investmentand public sector oversight”. This strategysupports (1) commercially and technicallyefficient energy delivery as a priority; (2) reformedsector governance that will safeguardconsumers, workers and resources; (3) the establishmentof a market-based enabling environmentwhere legitimate private investmentwill be facilitated; (4) the diversification of energyresources for long term low cost energy,energy security and clean energy use; and (5)identifying and supporting inter-sectoral supportinglinkages including comprehensive system-basedplanning not limited to projects, energyfor industry and vehicles. The Governmentputs great emphasis on expanding domesticcapacity for electricity generation andwill take steps to provide the basis for a transitionof the sector from public to private provisionof electricity. As the Afghan energy sectormoves from primarily state owned operationsto a more private market orientation, new institutionalarrangements will be established.The Afghanistan Compact benchmarks thatspecifically deal with the energy sector include:Economical and Social Development 77