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Cablegate: Ghani, Abdullah Debate Economy--Without Karzai

VZCZCXRO3462
RR RUEHDBU RUEHPW RUEHSL
DE RUEHBUL #2363/01 2271326
ZNR UUUUU ZZH
R 151326Z AUG 09
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC 0829
INFO RUCNAFG/AFGHANISTAN COLLECTIVE

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SENSITIVE
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E.O. 12958: N/A
TAGS: ECON EAGR EAID EINV EMIN ENRG EPET ETRD PINR
SNAR, AF. PREL, PGOV
SUBJECT: GHANI, ABDULLAH DEBATE ECONOMY--WITHOUT KARZAI

1. (SBU) Summary: In a televised August 10th debate in front of a
live audience, presidential candidates Ashraf Ghani Ahmadzai and
Abdullah Abdullah highlighted agriculture and natural resources as
the keys to Afghanistan's economic future. Both candidates sketched
their visions for increasing employment, emphasizing the importance
of including women. Abdullah focused on poverty reduction through
investment in water, energy, transit, natural resources, and
agriculture. Ghani called for widening economic opportunity in eight
"economic zones" and expanded governmental authority for six
municipalities that would serve as models for municipal reform
country-wide. President Karzai declined to participate, probably due
to his vulnerability on the rise of drug trading, perceived
corruption, and nepotism. Despite Karzai's absence, the
debate was another significant step in providing the Afghan
electorate with important information about Karzai's main
challengers. End summary.

Atmospherics: A replay of the first TV debate
- - - - - - - - - - - - - - - - - - - - - - -

2. (U) In overall tone, Abdullah seemed to aim for an air
of "senior statesman," dressed in a dark suit and speaking
in often-poetic generalities. By contrast, Ghani's PhD in
economics was evident in his presentation: he dug deeper
into issues, using specific examples including raisin
production and cement standards to illustrate his plans for
Afghan employment. Wearing Afghan dress, Ghani took
several populist pot-shots at international aid and
subcontracting. Ghani was interrupted three times during
his introductory presentation by spontaneous applause, and
he often joked with Abdullah and the audience. Abdullah
was more constrained, reading his initial presentation and
final address from prepared notes. Both candidates criticized Karzai
for failing to appear.

Abdullah's Five Pillars
- - - - - - - - - - - -

3. (U) Abdullah's prepared speech emphasized sustainable
growth and poverty reduction through market economics, with
the government playing a "pivotal role with respect to
reforming laws, supervising the implementation of laws, and
regulating the private sector." Mentioning that the
government must "intervene in the economy when necessary,"
he proposed a system of joint ventures with domestic and
international companies, industrial zones, tax exemptions,
and expanded employment opportunities for youth and women.
He advocated simplification of investment laws and
elimination of corruption and costly red tape.

4. (U) Abdullah described five pillars of his economic
policy: water, energy, transit, natural resources, and
agriculture (with agriculture receiving "80 percent of
government support.")

--Water: Abdullah highlighted the need to negotiate
transboundary water agreements with neighbors and "educate
experts" on water use.
--Energy: "Afghanistan can become an energy exporter," he
promised, emphasizing that the way to decrease imports is
through sustainable solutions (hydro and renewables).
--Transit: Abdullah again emphasized diplomacy and
negotiations with neighbors, plus interprovincial roads,
secondary roads, and small airfields in remote regions.
--Natural Resources: "Afghanistan's mineral riches could
fund these projects," he claimed, and better
infrastructure, transparent tender processes, and lower
royalty rates will be essential: he put priority on oil,
gas, iron, and copper, while also specifically mentioning
gemstones.
--Agriculture: Afghanistan can alleviate poverty through
self-sufficiency in agriculture; he called for substitutes
for poppy farming and support to farmers.

Ghani's Detailed Vision
- - - - - - - - - - - -

5. (U) In a more discursive presentation befitting a former
Berkeley and Johns Hopkins professor, Ghani outlined
problems that beset Afghanistan's economy, including
capital flight, complicated tax structure, lack of
transparency and infrastructure, landlocked status, and
narcotics production. He also struck a less-factual note
when he complained about "ineffective aid--there are four
or more levels of contractors, and the money does not stay
with Afghans. Ninety cents of every dollar from USAID goes
to the United States." Commenting on Afghanistan's rampant
unemployment, Ghani declared "the government cannot provide
employment" and cited the market as the best solution.

6. (U) Ghani won his first burst of applause during his

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description of obstacles facing Afghan contractors on
international aid projects when he called for "a legitimate
economy to replace the mafia economy." He then called for
insurance for investors (foreign and domestic) and
highlighted the potential for women in the economy
(reminding the audience that the Prophet's wife had been a
wealthy woman in Mecca.)

7. (U) Ghani garnered another round of applause when he
echoed Abdullah's dream that Afghanistan will someday be a
power exporter. He called for a quick regional trade
agreement so that Afghanistan can become "a land bridge"
for the region. Describing extensive Arab investments in
Africa and Asia, he said one of his goals will be to win
Arab investment for Afghanistan's agricultural sector.
"Market access is critical," he added: "If Europe wants to
help, let them open their market to our agricultural
products. NATO should buy Afghan products...Cotton cannot
compete with narcotics, but clothes can. Women can
participate in traditional textile projects, and the United
States should open its market." He noted that Afghan
products would need to meet international standards.

8. (U) As he has done in previous conversations with the
Embassy, Ghani described eight "economic zones" in the
country with different challenges and opportunities,
emphasizing that all regions should have access to equal
development. Ghani also mentioned plans to create powerful
"super mayors" in six cities, which would serve as a model
for municipal reform throughout the country. This "city
solidarity program" prompted another round of applause.

Questions, Answers, and Criticisms
- - - - - - - - - - - - - - - - - -

9. (U) In the question and answer session, the
entrepreneurs and businesspeople present responded
enthusiastically to Ghani's cost-cutting suggestion of
"eliminating the Ministry of Economy." Both candidates
suggested that they would eliminate the presidential Office
of Administrative Affairs; as Ghani put it, "the president
doesn't need 800 employees." Ghani drew laughter and
sustained applause when he asked sarcastically, "Why do we
need international advisors? To help us dig a well?"
Abdullah responded with his own criticism of international
advisors, saying that he had worked in a ministry with "one
hundred international advisors, but there was no impact
after they left. They even took the hard drives, they left
nothing. We need to change this."

Final Wrap-up
- - - - - - -

10. (U) Ghani's final address continued in a populist
vein, calling for Afghan dignity and envisioning a future
where "no Afghan will toil under the hot sun in the deserts
of Iran and Dubai." Saying that "on the 20th of August the
people will choose their future," Ghani called for
"politics to overcome force" and "a government built on
trust." Abdullah used the media to address the electorate
directly, reminding them of Afghanistan's rich potential
and calling on all Afghans to work towards a day with no
poverty: "On August 20th, you decide the fate of your great
land. Don't think you don't have the capability. You can
improve things; Afghanistan has the capacity to
develop...Make the 20th of August a day when we take the
country toward prosperity and peace."

Comment
- - - -

11. (SBU) This first economic debate between presidential
candidates was an important milestone for Afghanistan,
although the two participants' presentations offered few
surprises. Also unsurprising was Karzai's absence.
Although he could have pointed to years of sustained
licit-economy growth and the expansion of media, telecom and
financial services, he is vulnerable to criticism for the rise of
illicit drug trading, perceived corruption, and nepotism. That he
chose not to participate reflects the campaign's political
calculation that, as the incumbent, he has little to gain and much to
lose in such open debate forums. End comment.


EIKENBERRY

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