Remarks at Central Bank of AfghanistanPaul O'Neill,
Secretary of the Treasury
November 18, 2002
Secretary O'Neill: Thank you, Governor [Central Bank of Afghanistan Governor Ahady], it is a real pleasure to be here today.
I was remarking, as we were talking, that it was in February or March that President Karzai was in Washington and we had a meeting at the Blair House and we were talking about this project to create a new currency for Afghanistan. And at the time it seemed like a mammoth project that would take a long time. But I am very impressed at what has been done with the new currency to begin the exchange and to have the prospect of completing the exchange by the end of the year.
As the Governor said, this will create the basis for being able to run a monetary policy with confidence. And it is a very, very good step in putting Afghanistan on the road to a modern financial system so I congratulate you and I am delighted to see that not only are you making the exchange but destroying the old money as well, this is a very good thing to do. So congratulations to you. Thank you.
Secretary O'Neill: Thank you.
I think Afghanistan is off to a good start because of the good work of the President and his ministers, by taking the important steps that are necessary.
One of the reasons that I came here was to have a look at projects that have been undertaken with international assistance. We had an opportunity this morning to go out on the road where the paving is going to begin and to talk with the people that are doing the construction work there. It is really quite an important project, I think, both for itself and for what it will mean in unifying the country's transportation system.
But also it is an important symbol of the international community making good on its promises to Afghanistan, promises that Afghanistan will not be forgotten, so I think the country is off to a good start. The United States is committed to being here for the long term to assist Afghanistan and to turn promises into reality.
Secretary O'Neill: I think it is a good idea, as a general matter, for assistance to flow through the government because it is a way of giving credibility to the government and giving control to the government. I think that this is really quite an important proposition.
Secretary O'Neill: One of the difficulties in making more people understand the assistance that's coming into the country and the development work that is being done is the difficulty of communication in Afghanistan. The country is just at the beginning of the development of a national radio and television system with sound and visual images about things that are going on.
And, there are a lot of very important things going on that sometimes maybe don't have such visual images — like food assistance and getting children into school. So it may not be so obvious that this is happening on a very large scale. But these still may be critical pre-conditions for the society to advance, for the humanitarian aid to be here and maybe it isn't so visible right away. I think there are important projects going on, as I understand. There is a new five-star hotel planned for the city. This is the kind of indication that will bring hope and reassurance that the country and, more particularly, the capital are going to be rebuilt in a way that people will be able to see.
And for those of us in the United States who have an interest in the flow of funds from the United States, we will be looking for ways that we can assure that there is important, useful, and at the same time, symbolic evidence that the assistance is coming and that the country is developing again.
Secretary O'Neill: I think that with time there will be a shift towards construction that will be more visible. In the early stages it is quite understandable that humanitarian needs were given a priority, but I think that you are seeing a shift occurring already. I think that the advancement of the road project was a kind of recognition that there needs to be visible evidence that has also a high value for the country. And I think, as I understand it, that there are other road projects under consideration that will reinforce those ideas.
Secretary O'Neill: I am very, very positive about the financial team in this government. I've had the opportunity now to meet a few times with Dr. Ghani [Afghan Minister of Finance] and he has the skill level and capability to run any finance ministry. And we've had the privilege of providing aid and assistance to begin establishing budgeting systems and accounting systems and the tools that are required for modern management of a country.
Interestingly enough, because you are able to start new, you can start fundamentally at the leading edge, which is a very good thing. It is a privilege for you to have that opportunity, because there are other places that haven't had such systems or are burdened with systems that are a hundred or two hundred years old. In a way, this is an advantage for Afghanistan to start anew with the best ideas and the best technical knowledge. So I am very positive about what can be done here.
Actually, it is critical that the financial team function well because there are significant flows of funds and there are major needs that need to be dealt with and it would truly be a shame if every dollar that is intended for improving the lives of people in Afghanistan doesn't get used for that purpose. That would not be a good thing so I think it is a critical function. So you are very fortunate to have such skillful people running it. Thank you.