Afghanistan will ask international donors next month for $4 billion to revive its agricultural sector. However, it could be a hard sell with massive opium since foreign-funded efforts have largely failed to increase legal alternative to the narcotic though the price of grain has sharply raised.

Because Afghanistan did not honor an agreement with the International Monetary Fund and because the country’s three-year development plan could be rejected, international aid for Afghanistan is now in doubt. This is because the government failed to reach a target amount raised in taxes and the latest drafts of the Afghan National Development Strategy are of very poor quality. It has had time to achieve both these tasks but has not done so.

The World Bank has called for greater efforts to increase international assistance and more opportunities for Afghanistan. After reflecting on progress, Afghanistan is looking to form greater economic integration with its neighbors. The country has come a long way despite its turmoil over the last six years, and it looks to do much more to take the country to the next level and meet the expectations of the Afghan people.

Buoyed by strong year-on-year growth in foreign direct investment, Afghanistan has been enjoying double-digit growth since 2002. The World Bank predicts that in 2008, the GDP growth rate could reach 13 percent. The government in Kabul is doing what it can to keep investors interested in Afghanistan. The current legislative framework, for example, allows for 100 percent foreign ownership, full transferability of profits outside the country, international dispute resolution mechanisms and streamlined investment licensing procedures. Afghanistan’s most lucrative investment sectors are exploration and extraction of natural resources; construction and reconstruction of infrastructure; agriculture and agribusiness; transportation and logistics; power generation and distribution; water supply and management; and telecommunications.

The state-owned China Metallurgical Group has won the tender to develop one of the world’s largest copper mines in Afghanistan. The Group is said to be investing nearly USD 3 billion in the mine near Aynak and will employ nearly 10,000 people. Officials have claimed that there are 13 million tons of copper ore and the site is in a relatively safe area. The Afghan government is keen on attracting foreign investors to the economy which has been slow to recover after three decades of war.

Russian Investors who invest in projects in Afghanistan will be granted benefits by the Afghan government. One of the benefits will be an exemption from taxes, which will apply to companies that have investment projects that are four to eight years. According to Zalmai Aziz, Afghanistan Ambassador Extraordinary and Plenipotentiary, the previous procedure for registering firms in the country has been made much more simple. President of Afghanistan Investment Support Agency, Omar Zakhilwal has said, “Russian business is very important to us, and we are ready to offer benefits and concessions."

Despite resistance from the Afghan government and farmers, the United States remains strong in its drive to remove opium farms from Afghanistan. The opium industry is worth an estimated USD3 billion a year and while the farmers receive some of that money, the rest goes to drug lords and the Taliban, who previously condemned opium for being non-Islamic. The plan to spray chemicals on opium poppies has been resisted heavily by Afghan farmers who believe the chemicals will ruin their land permanently. The dry land and lack of proper resources has prevented the farmers from successfully growing enough wheat and in order to make money, several farmers have planted cannabis. Ultimately, it is hoped that pressuring the farmers to find alternative crops to harvest will boost the Afghan economy.

For the first time in decades, Afghanistan will be host to officials from the Economic Cooperation Organization’s ten countries. The five day conference that includes Afghanistan, Azerbajian, Iran, Pakistan, Turkey and the five former Soviet republics in Central Asia, will convene in Heart. Although the ECO meets annually, Afghanistan has not been the host due to internal war. Sultan Ahmad Beheen, Afghan Foreign Ministry spokesman, said the conference will include discussions regarding trade, transportation and other economic issues as well as potentially discussing the International Donors Fund. The fund was set up to promote reconstruction in Afghanistan. World Bank, Asian Development Bank, Islamic Development Bank, sectors of the United Nations as well as United States officials will be attending the event as observers. Beheen hopes the conference will promote Afghanistan’s potential to become a hub connecting the Middle East and Asia.

Construction on Afghanistan’s Ring Road is expected to begin soon, as funding is already in place. The Asia Development Bank has provided USD176 million and the government of Afghanistan will provide USD4 million. One section of the road will be completed by the Islamic Development Bank and Saudi Arabia. While the completion of the road will be a milestone, it is not expected that is will be finished by the proposed deadline. Niklas Swanstrom, director of the Institute for Security and Development Policy has said, “"Afghanistan has been a crucial factor in the whole economic equation of Central Asia. There have been estimates, for example, that the impact of [completing the Ring Road along with] all the regional network of trade would be 771,000 full-time jobs. It would be immense. It would be very positive."

Afghanistan will receive USD170 million in loans from The Asian Development Bank. The money is supplied to help Afghanistan rebuild it's "ring road", a highway that links Kabul to other large cities in the country. The new highway will go through Herat and Mazar-e-Sharif avoiding the southern part of the country, where the Taleban is most active. The banks says that the road will hopefully encourage more transport links between Afghanistan and it's neighbors. The first road connection to Tajikistan, a bridge across the Pyanj River, was completed last month. The Asian Development Bank has supplied nearly USD1 billion in assistance to Afghanistan, USD600 million of that intended for road construction.