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 You are in: Under Secretary for Political Affairs > Bureau of South and Central Asian Affairs > Releases > Public Statements on South and Central Asian Policy > 2002

Reconstruction and Rebuilding Efforts in Afghanistan

Andrew S. Natsios, USAID Administrator
On-The-Record Briefing
Washington, DC
December 23, 2002

Rebuilding Afghanistan: Before and After

(2:40 p.m.)

MR. REEKER: Good afternoon and welcome back to the State Department. As promised, we have a special briefing for you today on reconstruction and rebuilding efforts in Afghanistan. Those of you that attended the regular briefing will recall that we put out a statement noting the one-year anniversary of the Afghan Interim Government, where the transitional, where the initial transitional government, gained support through a Loya Jirga and became an interim government a year ago.

And we are very pleased to have with us the Administrator of the Agency for International Development, Mr. Andrew Natsios. AID has, of course, spearheaded a tremendous amount of the US effort, working with our international partners to reconstruct and rebuild in Afghanistan, and he has a presentation that will run you through some of that, some multimedia, and then we'll take your questions.

Thanks. Andrew.

MR. NATSIOS: Thank you very much, Phil. What I'd like to do is go through what our four objectives are and then show you some slides, because I think when we speak abstractly about what we've done, the message is not getting across, so we took some pictures.

There are four objectives to the American reconstruction effort that President Bush and Secretary Powell have approved and asked me about constantly.

The first is that we continue the humanitarian assistance, particularly for the resettlement of internally displaced people, and for refugees who are returning from Iran and Pakistan.

The second is that we strengthen the capacity of the Karzai government to govern the country.

The third is that we accelerate economic growth, particularly in the agricultural economy, because the only way there is going to be security in Afghanistan over the long term is if there's a growing economy with jobs, particularly for young men. Young men are a source, in north and south, whether they be western countries or poor countries of instability, when they don't have enough jobs and they're out on the streets. And when a country's economy has collapsed, there is a particular problem with young men causing problems. And one of the reasons that the militias have been fueled over the last few decades is because there's basically been no economy in Afghanistan. So the economy is not just a matter of family wealth; it's a matter of security for the population.

And the fourth is, if we do not improve the lives of the average Afghan citizen, if they don't see a tangible improvement in the quality of life, they're not going to be happy and they're not going to think the reconstruction is working.

So what I'd like to do now is show a series of slides and weave through some of the things that we've done, I think very successfully.

This is a picture of one of the WFP warehouses, but please note these are US Government food bags. Seventy percent of the food that's gone to Afghanistan in the last 14 months has come from the United States. We've put in about $200 million worth of food. Now, the first part of that food was for the purpose of preventing famine. It was relief food.

We then began changing the program in the spring to a development program using food aid. One of the things we did, for example, is the civil servants were getting paid, to some degree, by checks through the new Interim Government, but we then started issuing vouchers from the ministries to the employees. There are something like 300,000 employees, and they get a voucher for enough food to feed their family each month, and so their salary was in food. And it was actually more desirable than cash because the markets were unstable in terms of prices, and if you had a voucher and you could get a certain amount of food, it meant that you knew you could feed your family. We did that for six months. Most of the teachers who went back to school, 50,000 teachers, were getting a ration of US Government food during that period.

And then we also used the food as food-for-work. We rebuilt 875 kilometers of tunnels, irrigation tunnels and canals, using food-for-work, and I think about 850 miles of rural roadway.

Next.

And this is some vegetable oil. We also used this vegetable oil in a very interesting way because there is a problem in some countries in the developing world getting equal rates of girls and boys in school because there's a tendency to put the boys in school and keep the girls at home. And so what we did in many areas where we were having trouble getting the number of girls to equal the number of boys in the classrooms was to give a supplement of vegetable oil, which is a very valued commodity in Afghanistan, to families, a monthly ration, if they made sure their girls were in school. And in those areas that we did that, we were able to equalize the rates.

Next, please.

We also, by the way, have, through the World Food Program, put in 77,000 tons of food this fiscal year. Most of that has been pre-positioned in the Hazarajat, which is the alpine plain in the center of the country, and in Hindu Kush. Those areas experience between 4 and 30 feet of snow in the wintertime and it's impossible to move food after a certain point. And we've actually already past that point. World Food Program successfully moved food into those areas well in advance of the snows coming and the passes becoming impassible. And so we're in very good shape for this winter.

This is a picture of the United Nations Mine Action Center, which has been around for years. It's the largest employer, sadly, in Afghanistan. The most effective UN de-mining operation in the world is in Afghanistan. The State Department is the primarily funder of that but AID put, just recently, $2 million in to have them de-mine the road that we're building from Kabul to Kandahar to Herat because, of course, we can't rebuild the road if there are mines in it. And you see here some of the ordnance that's been discovered being blown up.

Next.

We made an announcement, the President made an announcement several months ago, I think it was in September, as I recall, that the United States, with the Japanese and Saudis, would rebuild this road from -- it's the largest and most important road in the country -- from Kabul to Kandahar, down south then to Herat. It has several important functions to it. One is clearly an economic function. It ties the country back together economically. It should take an hour to go to Kandahar, a couple hours from Kabul. Now it takes eight hours because the roads are so bad, there are six bridges that are out. And so President Karzai asked the President if we would focus on it.

Traditionally, infrastructure, big-scale infrastructure is done by the banks, but they wanted it done immediately so they asked us to do it. We've been doing it. We put $80 million in. Forty million have been put in for this fiscal year. The rest will be put in over the next two fiscal years. It's -- my memory is almost 700 kilometers long. It's a very long road. It also has political significance because it will tie the different ethnic groups in those regions together.

And we've already begun work. Louis Berger Associates, an American-based engineering firm, is the prime contractor. We've hired an Afghan-Turkish company to actually do the work on the ground, the contracting work, which will employ thousands of young men. And in addition, we're going to put development projects along the road as we move. You'll see some of them as we go along.

This is the new company out there grading. They've done grading. They will not start the blacktop unless weather conditions permit because it can't be raining, it can't be snow, and there has to be a certain temperature level before we can lay the blacktop. After January, when it gets too cold south of Kabul to do this, because it gets down to 20 degrees there, we will move the whole effort west of Kandahar down south, which never gets to be winter temperatures, and we will finish the winter going west of Kabul, and then we will move back up when the temperatures improve and the weather conditions improve back to south of Kabul, and complete the road there. So we want to be continuously working through our contractor the whole year.

This is a school that we're building along -- in the villages along the highway. The purpose of this is so the villagers see a connection between the reconstruction of this highway, the importance of commerce, but also the importance of public services. So we're doing these things in a combined fashion so that the road is, in fact, a lifeline that will hang off of it health clinics and schools as we go along building it. And the villages will have a vested interest in seeing to it that the road continues, which is a very important part of, in insecure areas of Afghanistan, there are some southern areas near Kandahar that are insecure still, where this is a form of protection for the road.

This is -- remember I mentioned that we're doing heavy work in reconstructing the water system, the irrigation system of the country. The fact is that Afghanistan is a heavily arid country and the kings in the 18th century built among the most sophisticated and extensive irrigation system I have ever seen anywhere in the world. Only in India is there anything comparable to Afghanistan. Much of this infrastructure was destroyed during the Soviet civil war and never rebuilt. The rest of it was destroyed by the Taliban, particularly in the Tajik and Hazara and Uzbek areas. The Taliban just simply blew it all up or destroyed it. Or, in other areas, the infighting meant you couldn't clean these. If you don't clean these once a year, they become blocked, they don't work.

Where the water comes from is from the Hazarajat, this alpine plain in the center of the country where there's three or four feet of snow, up to 30 feet of snow. That melts slowly during the rest of the year and that feeds the irrigation system. So what was a desert 300 years ago became very productive agricultural land through the transfer of this snow, melted snow, through the irrigation system.

That system is now being rebuilt and we have over 6,000 water and irrigation projects across the country at the community level like this one. And I was -- when I was in the Shamali Plain, which is a very rich agricultural area north of Kabul, there were pomegranate, almond, walnut, apple orchards, lemon groves -- it was an extraordinary -- and huge vineyards, miles and miles of vineyards, all destroyed. I mean, it looked like a desert. And I said to the farmers, I said, this is irretrievable. And he said no, absolutely not. This happened once before. Even the branches from the vineyards had been cut and were on sale -- it was very painful to see -- and the trees, the orchards, for firewood in Kabul. And I said to the farmers, I said, I saw the trees are dead. He said the roots are not dead and within three years we will bring back these orchards and they will be producing. And I said I will believe it when I see it. They said we will show you.

And they are beginning to come back now. They started this project in January when I was there and the irrigation of the -- water was beginning to move from the irrigation system. The irrigation system, a lot of it, is not aboveground, it's underground. It's in karezes, which are below the ground, to avoid irrigation -- evaporation by the sun because it's so hot in the summertime.

Next slide.

A lot of our focus is in agriculture, and agriculture is not a visible thing. You know, when you do a physical reconstruction, like a school, there's a sign on it. There is no sign on 7,000 tons of seed that we introduced last spring, and then another 5,000 tons of seed we just distributed. We will, over a three-year cycle, replace 20 percent of the seed stock of the country with a new variety of wheat that will increase yields by 80 to 100 percent and is drought resistant. So if another drought comes, part of the crop will survive and grow food. The country, before 1978 was food self-sufficient. In fact, they exported food. There's been a massive loss of productive capacity over the last 24 years. We're rebuilding that, both for food security reasons, for nutrition reasons, but also for economic reasons. Seventy percent of the people are farmers or herders. If you don't have the agricultural economy moving, there's no jobs and there's no wealth and the country will not come back to life.

You see here something in the traditional form. You can see how arid this countryside is.

Next slide.

There was an 82 percent increase in wheat production this summer; 82 percent is the largest increase we've had since the end of the civil war -- the beginning of the civil war in 1978. Part of it was the improved seed variety from us and from other donors. We put 15,000 tons of fertilizer in, the Pakistanis put fertilizer in, the Indians -- a lot of countries. The Europeans are now contributing to the agricultural renewal. It's a unified international effort to put inputs into the agricultural sector.

But the good thing about this wheat seed we're putting in is that it's so productive, the farmers don't even eat the wheat it produces. They say to us, "We're going to take all of the production from this and use it for the next harvest, and then we'll eat the traditional varieties that don't grow very well." We want to get out of that. I had guys telling me, farmers telling me that north of Kabul when I was there in January, he said, "This seed is so good. We've never seen anything like this before. It's a much more efficient way of growing wheat." And so -- but again, there was an 800,000 ton, 82 percent increase, and yet it's not widely known and there's no sign saying this came from American seed and agricultural products -- development and reconstruction efforts.

Next.

Now some buildings. This was the Ministry of Finance. It had been destroyed, parts of it inside, not terribly destroyed, but it was not usable. Next slide. That's what it looks like now. We reconditioned the whole thing. We've actually reconditioned, I think, about 16 government ministry buildings.

Next one, please. That was the broadcast system for Radio Afghanistan. We completely rebuilt it last March and April. In fact, the Loya Jirga was broadcast on Radio Afghanistan. It was called Radio Kabul then. It was paid for by the US Government, by AID. We not only did the reconstruction of the physical infrastructure, we've also trained 200 Afghan radio journalists in order to get -- it's a radio culture, that's how they get most of their entertainment and news at night is through the radio programming. We also distributed 30,000 radios, shortwave radios, in all of the villages so that it is at least one radio in the villages and people can hear what's going on. We broadcast deliberately the entire Loya Jirga because we thought if people knew who they had elected and then they heard them on the radio and watched their behavior at the Loya Jirga, it might stabilize the situation and people would act more responsibly. In fact, they did. Nothing like public disclosure to make politicians -- and I'm a former politician -- behave well.

Next one.

These are the new dishes. That's Craig Buck, the AID mission director. And that's Bob -- Ambassador Finn, the -- I believe, the Ambassador.

Next one, please.

And that's some of the transmission equipment that we're using. In fact, we're funding a new radio station, a second one, because we don't want just one, that is a private radio station, not controlled by the government, that we put some initial capital in to set it up. It will go online later this month, as a matter of fact.

Next.

This is the Ministry of Culture. Next. That's what it looks like. It wasn't completely finished there but you can see some of the renovations during the reconstruction.

Next.

What we also did in 16 of these ministries is we put in the heating systems, we put in computer systems and we put in telephone systems with other donors. The Japanese put money in, the Europeans put money in, the EU, and together we were able to make many of the ministries functional. That's the same boiler system now.

Now, why that's important is when I was there in January, during the day it was 20 degrees Fahrenheit. It's a little cool. So if the ministries are not -- don't have heat in the wintertime, they do not function very well.

Next.

This was the Ministry of Water and Power, which is very important for electricity and for irrigation and for the urban water systems. Now look at the -- could you put it back for just one second? Look at the second floor. You can see it was gutted. Next slide. We reconstructed it. Here's the renovated building after it was completed.

Next, please.

This is the Afghan Teachers College. It's the principal means for educating teachers in Afghanistan. We made a decision to invest heavily -- this was actually from the instructions directly from the President and the First Lady that they wanted a heavy focus on education and reconstruction. And so we did it at different stages. Unless we produce more teachers through the colleges, there isn't going to be a supply of trained teachers in the system, so the first thing to do was to rebuild the school, the college. That's the same building now and these are young women who are training to be teachers. Two-thirds of the teachers in Afghanistan are women and they are going to lead the way toward the reintroduction of women in a visible role in Afghan society, which is another reason why we did this.

There's another reason why we focused on the schools. Having the kids off the streets, in homes -- I mean, instead of on the streets, in school, is a way of stabilizing the society. One thing that did happen is we produced 10 million textbooks in two months. It was 200 textbooks, 100 in Dari and 100 in Pushtu, grades 1 through 12, for the whole curriculum. We underestimated -- in fact, I thought we had produced too much and I thought we were going to get criticized for having all these surplus books. We grossly underestimated. There are a million more kids in school than we had expected. And the Afghan Ministry of Education asked us to -- we were going to actually reform this curriculum. They said don't reform it, we like the curriculum, don't touch it, just print more books. So we're printing another six and a half million textbooks from the same curriculum set for the opening of school in March.

Next slide. Yes? I'm sorry.

QUESTION: Could you give us the numbers again on how many textbooks you --

MR. NATSIOS: We printed 10 million textbooks. Actually, it's 9, to be precise, it's 9.7 million textbooks for the opening of school last spring. They've asked us to print, which we're doing now, another 6.5 million textbooks for the opening of school this spring. It's 100 books in Dari and 100 books in Pushtu, the two major languages of the country, and they are grades 1 through 12.

We also trained 1,300 teacher trainers, who will go back to the villages and train the teachers. Most of the teachers are simply the literate people in the village. If you have a high school degree, you become a teacher. And that's not sufficient to be a good teacher. You need some pedological or pedalogic -- what's the proper term?

A PARTICIPANT: Pedagogical.

MR. NATSIOS: Thank you -- training. And they're getting that through this -- it's through the University of Omaha, Nebraska, the University of Nebraska Afghan Studies Center. This is a contract with -- a grant with AID. Can we put these up? Can I have one of those, please?

USAID Administrator Natios at December 23 Briefing: This is an example of the schools weve rebuilt. Weve rebuilt 142 schools, daycare centers and vocational education schools. This is the Sultan RaThis is an example of the schools we've rebuilt. We've rebuilt 142 schools, daycare centers and vocational education schools. This is the Sultan Razia Girls School, which is -- my memory is it's a girls high school. There are 5,000 teenage girls in it. That's what it looked like before we did it. This is a joint Civil Affairs unit/AID project. Civil Affairs in the US Military. Next slide. That's the same building and those are some of the workmen there finishing it off. It just opened a few weeks ago.

Next slide.

These are some of the kids in the schools, obviously a little girl there. I think it's a wonderful photograph, actually, of the interest in this. I was there in January and they had -- it was extremely cold and there was basically no heat in the buildings, and yet the kids were all there in the schools and they were extremely anxious. Very interesting.

I asked the kids, "Do you know who President Bush is?" And I would ask the question, "Do you know who Colin Powell is?" They all knew instantly. Everybody would raise their hands. If you asked most kids in the United States, "Do you know who the President of Afghanistan is," do you think you'd get the entire class raising their hand?

It was an interesting thing of what they were aware of internationally and what they -- this is the first grade class, by the way. This is not a high school class that I asked these questions to. But there is an enormous thirst for education. I had people tell me that the hope for the country is an educated citizenry. Not an American saying it. These were Afghan parents who were illiterate in the rural areas.

Next.

We've invested some money into -- the first ministry we rebuilt was the Women's Ministry in Afghanistan because the roof had been blown off. We replaced the building roof last spring. And Sima Samar asked us to do that. We did that first. But we're also supporting a number of women NGOs, women's NGOs, and there's a women's newspaper, a network newspaper that we are supporting in the country.

I think that's -- is that the last one?

A PARTICIPANT: No, sir.

MR. NATSIOS: Okay, next.

Okay, these are WFP bakeries in the large cities. And widows and indigent women run them. And they ran them, actually, through the Taliban period, but they were shut down, in many cases, by Taliban last spring and last summer of 2002, before the terrorist attacks, because they didn't want women running these. And we've revived them through WFP, but again, most of the food being used to make this bread, this flat bread, is from the United States Government.

Next.

And I think this woman is -- works for one of the aid agencies, but it's -- I haven't got a clear readout on exactly who she is, but I thought it was an appropriate picture to end it.

A PARTICIPANT: -- the World Food Program.

MR. NATSIOS: Does it say? Yes. Let me just give you a few statistics. I mentioned 6,100 water projects. We've rebuilt 72 health clinics, birth centers and hospitals, four mountain passes, including the Salang Tunnel, which is the primary route from the Kabul area through the Hazarajat North into the northern part of the country. And when that gets shut off, of course all commerce ends to the north. They've been kept open. We invested money, $5 or $6 million to make sure that the Salang Tunnel stays open the whole winter.

We've reconstructed 31 bridges. And this says here now we've rebuilt 4,000 kilometers of road, both through food-for-work -- I mentioned 850 kilometers of road through food-for-work, but we've also begun to do farm-to-market roads because if the farmers produce a surplus and they can't get the surplus to market, they are not going to produce the surplus the next year. It's a waste of time for them. And so we want to make sure that there is a marketing system for the agricultural products that are being produced.

We've also rebuilt 142 schools, daycare centers and vocational schools. You saw a couple of them there on the screen. Do we have any -- the posters? Can we take them up? Because I want to give a sense of how much money we've spent and where we've spent them. Why don't we just hold them up since there's not enough time to paste them up?

People ask how much we've spent. We have, to date -- since the beginning of the terror war at the beginning of October of last year, so it's 14 months -- in 14 months we have spent $600 -- I'm sorry -- $848 million on humanitarian relief, rehabilitation and reconstruction. And these are the sectors it's in: $200 million for food -- I'm sorry -- $100 million for food here; $140 million for refugee resettlement. That was done through the PRM Office, Gene Dewey's office in the State Department, through UNHCR. We are, by far, the largest donor to the United Nations High Commissioner for Refugees. And 2 to 3 million refugees have come home much earlier than any of us anticipated. But the UN has done some very fine work in resettling these refugees. But again, we're the major donor to that.

Spot reconstruction. We've had 200 small projects doing spot reconstruction. What are small projects? The girls school in Mazar-e-Sharif that I showed you, that's a small project. The heating system for one of the ministries that you saw, that's a project. We're doing the hospital generators down in Kandahar in one of the big hospitals that had no heat and no electricity. But there are 200 of those small projects. We just signed last Friday our 200th small grant to do these small-scale reconstruction projects.

The agriculture program you saw the evidence of in the increased harvest, the 843,000-ton increase in the harvest, an 82 percent increase in production.

The health is most interesting. Do we have the health one here? We've just finished this last week. A consortium was set up between the European Union, the United States and the Japanese working with UNICEF, all of it being done through the Ministry of Health -- if you ask the Minister of Health how happy she is with what we're doing, we've had people on her staff in her office for the last year working with her on getting this. She's one of the great, charismatic figures in Afghanistan. She's a general. She survived all of this. She's a surgeon, a very skilled surgeon, and a very powerful lady. She's a wonderful role model for Afghan women. She refused to wear the burka during the Taliban period. She said, "If you want me to be a surgeon, I will be a surgeon. I am not wearing the burka. Period." And they let her, they left her alone because she's one of the best surgeons in the country.

What we did was, in order to assess what we have to do, we did this survey. AID actually conducted the survey through a contractor but we worked with these other agencies who funded it with us. And what this map shows is the level of service per 10,000 people in the country and this will help us to assess the underserved areas, because you see some of the brown areas down there are one health facility per 50,000 and on top, in the white areas, it's 1,000 per 10,000. So obviously, we want to create -- we have a standard that we've set up and the standard is that there will be a health clinic -- there are 1,034 health clinics right now in Afghanistan. We want one health clinic per -- within a four-hour walk of anybody in Afghanistan. It's a very, very aggressive standard to follow. But we want it within walking distance.

We think we can dramatically drop the child mortality rates, which are among the highest in the world -- 25 percent of the kids die before they are five years old -- and it's the highest maternal mortality rate, with Sierra Leone, in the world.

QUESTION: Did you say before five or four?

MR. NATSIOS: Five. That's the standard. Under five. Infant mortality is under one, child mortality is under five.

And what this tells us is where we will have to build more clinics. And in the survey that was conducted, it also tells us the physical condition of the structure, how well trained the health workers are and whether there's pharmaceuticals in the buildings.

We will shortly put out a contract -- is it out?

A PARTICIPANT: No, not yet. January.

MR. NATSIOS: January. We'll put out a paper -- I think it's for 500 health clinics to rebuild 50 percent of the health clinics in the country and to train 50 percent of the staff. The Europeans and the Japanese have agreed to put in the rest of it to finish off the project. But that will have a functional healthcare system for the country and that's where the bulk of the care will be provided.

Why don't we go back to the earlier slide here. Sorry about that.

So that's the health system as it's getting organized.

And then I mentioned the education. It's teacher training. It was the teacher salary. It was the -- we're going to build several hundred schools more beyond the ones we've already built and we will also continue to help the teachers college in Kabul produce more trained teachers. So that's the education program.

I mentioned the Kabul-Kandahar-Herat Highway. I mentioned the governance area here. We put a $100 million into the Interim Government. Most people don't realize it, we did not advertise it when it happened, but the logistical system for the Loya Jirga was run by the US Government, by us. That is to say, we did the monitoring of the Loya Jirga selection process at the village level, we transported the delegates to the capital, we provided food and accommodations for them -- there were a couple thousand of them as I recall -- at the conference for, I think it was a week or two -- and all of the logistical arrangements for it. And that cost us about $7 million. But it's unlikely that would have taken place had we not done the logistics.

The currency -- we don't advertise this, but the Afghan currency is out. They printed it on their own with their own money in Germany, privately, commercially. However, the counting machines, the shredding machines for the old currency, the security systems to deliver the currency to the regional banks, and the public affairs and the currency advisor, who is an AID economist, helped the Governor of the Central Bank put all of this together and make the currency successful. And it's been a very successful rollout. The Governor of the Central Bank and Ashraf Gani, the Finance Minister, and President Karzai will tell you that this is the most important thing they've accomplished is a stable Afghan currency. So that's part of governance.

And then the de-mining effort. Again, the de-mining effort is a State Department function, not our function. We put a little extra money in to cover the de-mining of the road area. The blue you see on the left is security assistance. That's State Department to help build the Afghan army. But, again, that's not AID's function. That's a State Department function.

The green is the reconstruction and the red down below is the humanitarian relief. I've seen the comment made in the newspapers in some of the reporting that all that's going in is humanitarian relief. That is simply not accurate. And that chart very clearly tells you that. We had to do relief earlier. We have had large-scale loss of life. And there was -- and saving people's lives is what the Secretary of State told me to do and the President told me to do. And they were absolutely right. I can't just sit here and say we're going to do reconstruction and let tens of thousands of people die.

And so we successfully averted a famine. We began setting up a system of relief that would support people who are completely indigent who are returning from neighboring countries, or refugees, or internally displaced people resettling. We've rebuilt 70,000 homes in the northeast region of the country that were destroyed during the fighting.

The primary fighting, as you know, was between the Tajiks and the Pushtuns, and that was in the northeast and so that was heavily focused in that region. But 70,000 homes is -- now, these are $150 homes. They're not expensive homes.

Are there any more -- there's one more slide, isn't there?

A PARTICIPANT: We have these charts available (inaudible).

MR. NATSIOS: Okay. That's some of the statistics that I mentioned earlier.

So are we finished? Absolutely not. Have we made a very good, strong first year effort? Absolutely we have. And are there challenges? Yes, there are challenges. But I think we're further along than any of the other reconstructions I've participated in, either in the NGO community or in the first Bush administration. And we've done reconstructions in Mozambique, Ethiopia, Eritrea, Sierra Leone, Liberia, Nicaragua, Bosnia, Kosovo. This is not new. The donor governments have done this before. This is actually much more rapid than it normally is. But people are very impatient. They want work done immediately. And I understand that. After what they've been through, they deserve it. But the President and the Secretary have instructed us to move to an accelerated level and we are doing that.

Are there any questions?

George.

QUESTION: Lots of questions, but I should only probably ask two. Do you think the security situation is sufficiently under control to permit this kind of work to continue relatively unimpeded?

And could you give us a brief evaluation as to what has transpired since the Tokyo Conference about 11 months ago? Are countries donating what they said they were going to donate?

MR. NATSIOS: The first question, George, again, was?

QUESTION: About the security situation.

MR. NATSIOS: The security situation. We believe in 26 of the 33 provinces there is moderate to good security, sufficient for NGOs, the government ministries, the United Nations, the ICRC to function efficiently well, unimpeded. Is that the whole country? No. But it's the great bulk of the country.

So there are seven provinces that are still unstable, and they will be these provinces -- we've told the local leadership that if you want us to start the reconstruction effort, you have got to get control of the security situation yourself. You know, I've read a lot of the commentary in the media about the warlords and the instability and all this. There has been instability in every single, every single conflict and reconstruction effort that I personally have been involved in, and that AID has been involved in. This is not new. And the notion that a huge force is always needed from the UN to provide security is simply not the case. I can go through a whole series of countries where that -- that we had no, in fact, very few troops from abroad from the United Nations or donor governments or any other governments, and yet the country gradually returned to normal.

Once the economy starts producing jobs, the young men will leave the militias and they will go get the jobs. And that's what we want to do. The economy is most important at this point, most important.

And the second question was, oh, other countries contributing. I think part of the problem is, so many countries gave money, or pledged money in Tokyo that have no aid agencies and no mechanisms for disbursement of the money. Some of them were at a loss as to how to do this. They don't have local NGOs. They didn't even have mechanisms in some cases or embassies in Kabul to transfer the money.

So, was there a slow start in some cases? Yes, but it was for understandable reasons. The major donors -- the European Union, the United States, the British, the Germans, the Japanese, the Italians, the French, actually in the Nordic countries -- did put in money rapidly and that's why we -- this is just what we accomplished. This does not go through what the other donors have accomplished. For example, Mrs. Ogata and I made an agreement last spring that we would redo the radio system and she -- the Japanese Government redo the television system because there's a television station in Kabul that covers most of the country. She said we did that years ago, we'll do it again, you guys do the radio system. So the donors are sort of dividing up what we do versus what other people do.

Yes sir.

QUESTION: I remember that the Iranians made a substantial pledge in Tokyo one year ago. Did you see any money coming from Tehran?

MR. NATSIOS: Yes, a lot of the money went through into the Hazara area. I mean, Hazaras are Shias and it's not unusual for governments to provide assistance based on ethnic loyalties in the country. But there was assistance provided to the Hazaras which live in the Hazarajat. They are underserved population, actually. They are among the poorest people in the country because they've been discriminated against over the years.

And in the greater Herat area, they did it as well. They built a road from the Iranian border to Herat and there is commerce going back and forth. Now in Herat there are actually street lights and electricity functioning and the water system is functioning. So there is aid that went in.

Yes sir.

QUESTION: Two questions. Can you give us a breakdown on a fiscal year basis. How much did you spend an FY02? How much or how can you spend in the current fiscal year? How much you think the administration will ask for for FY04, specifically for this type of Afghan assistance?

And secondly, why do you think -- you asserted that the progress has been much quicker here than in a whole series of other countries you had mentioned. Why is that? Is it the level of funding, the desire of the people, some other combination of factors?

MR. NATSIOS: Well, I think part of -- to answer your first question last, we've been through this before, and we know the things that didn't work too well, and so we've corrected for them. For example, there's provisions of the Foreign Assistance Act that allow us to suspend federal procurement law, which is very time consuming. It takes three or four months just to put out a contract. We can do it now as a matter of a few weeks. We did it for this road, for example. We did have competitive bids. We had five bids. We went through the process. But we didn't use the long normal process which federal law allows us to suspend in the national security interests of the country. And we never used those before. I think Bosnia may have been the first time those statues were -- those special authorities were used under the statute. So we use authorities AID was unfamiliar with using, even though they had them in previous years.

In terms of the breakdown, I can get them for you. I don't have them in front of me. But this year, I would expect just in reconstruction, not in -- this does not include humanitarian assistance -- I would expect we'll spend at least $300 million, maybe $400 million dollars. But that depends on what the Congress passes for a bill, and that hasn't happened yet, so I don't want to prejudge what our colleagues in the Congress will do.

QUESTION: Let me ask the question in a different way, without asking for specific numbers. Do you see those numbers, reconstruction and humanitarian, going up or going down (inaudible)?

MR. NATSIOS: We expect the humanitarian assistance will go down because the country's returning to normal. With a 850,000 increase in tonnage for wheat crop, there's no reason to send as much food aid as we did last year. We've dramatically dropped the amount of food aid because we just don't need it as much.

QUESTION: And reconstruction will continue to go up?

MR. NATSIOS: It will continue up. Humanitarian aid will gradually slow down and reconstruction aid will gradually rise.

Yes, sir.

QUESTION: Yes, on the road reconstruction effort between the US, Saudis and Japanese, how has the cooperation been and how has the grants from those three countries come together? I know there's been some press accounts.

MR. NATSIOS: There have been press accounts, and we're still in discussions with the Saudis. I was a little surprised by some of the things that appeared in the media, in The Post, I think it was this morning. Wasn't it this morning? Or this -- yesterday. There are still discussions going on with the Saudis. I think there may be disagreements within the Saudi Government as to what's been agreed to and what has not, and I'd rather leave it at that because we think we can work through this.

QUESTION: Do you have any comment on some of the reports just that, I think they quoted some US officials, or even USAID people? Do you have any comment on those quotes, where they came from or was it --

MR. NATSIOS: They didn't come from me and I didn't give authorization to anybody to say -- in AID to say those things, and I'm not sure Secretary Powell or Rich Armitage did in State. So I don't know who said those things under what circumstances. I do know there is some disagreement, apparently, within the Saudi Government as to what was agreed to, but we're discussing this with them. They know how important this is and we'll see if we can't work it out.

Yes, sir.

QUESTION: Can you talk about some of the disappointments? Is anything not going so wonderfully? Opium poppy comes to mind as the question to ask but maybe that's --

MR. NATSIOS: We've had a 400 percent increase in cotton production through a project we're running in the Helmand Valley where 70 percent of the opium is produced in the country, and that is an effort to substitute cotton for opium. Now, the base for the cotton was not huge. But the problem was there was no market at a good rate, good rate of return, and now there is. We set up a system for selling it in Pakistan, and we've got the market involved. We don't have to worry about it anymore but we're trying to get more inputs into the cotton producers to go -- move from opium to cotton. And that's going to be a -- it's going to be a slow process to do that because heroin is very profitable. The good thing is that it's a depressed price right now and so it's a little easier to get it done because it was an oversupply over the last few years.

QUESTION: And on my original question, what other areas just are not going as well or as fast as you'd like them to go?

MR. NATSIOS: I would like the economic governance stuff to happen now. We have economic governance package with seven indicators of -- results indicators that we're going to use. It's currency reform, that's gotten through.

Karzai wants, President Karzai wants to sell off 300 para-statals that are owned by -- they're government-owned businesses, like the cement factories, for example, and the fertilizer factories. He wants to privatize them.

We want -- we're going to work with them through the Finance Ministry on reform of the revenue collection system so they can produce their own revenues so they can support the government.

We did the same thing in Kosovo. It's very interesting, when we started the Kosovo reconstruction, 92 percent of the revenues for the Kosovar Government were donor foreign aid. It's now only eight percent. Ninety-two percent is locally produced revenue. And the man who orchestrated that, Craig Buck, for AID -- that's one of AID's functions there -- is the person we put in charge of the AID program. So he's transferred a lot of -- he also did the Bosnia reconstruction. So he's taking lessons he learned in terms of economic governance structures and transferred them.

They are working with Bill Taylor, who is the US Government Coordinator through the State Department of the whole relief effort. We report to him and to the Ambassador there.

Yes, sir.

QUESTION: Remember last year, there were a lot of reports about how many people were at risk of hunger over the winter, in the millions of people. Do you know this year how many people are at risk?

MR. NATSIOS: I don't -- it wasn't risk of hunger, it was risk of starvation. There's certainly hunger in some areas. That's why the 77,000 tons of food were pre-positioned in the Hazarajat area. The amount -- I don't even recall the figures but it's relatively low.

A PARTICIPANT: Six million will need food aid this year.

MR. NATSIOS: Six million will need food aid. Half the country needed it last year at this time.

Yes.

QUESTION: How long do you think it will be before this reconstruction aid and development aid is sustainable in the sense that the Interim Government -- I know that it's still an interim government right now, but will be able to administer its own infrastructure, its own institutions, things like that?

MR. NATSIOIS: Well, it won't happen all at once. It'll happen in different sectors more quickly or more slowly, depending on the ministry and the leadership in the ministry and the qualification of the people who work in the ministries, because there's 300,000 Afghans who work for the provisional government at the central level or at the regional level or at the local level. Some of them are highly skilled. Some of them aren't so skilled. So it's not -- it's going to be a murky picture. It's not going to -- it's going to look like a mosaic instead of a clear, sort of, diagram that will show even movement in all of the sectors in all of them. That's not how these things work. I can't give you a date where everything will be functional.

I can tell you the health ministry is in very good shape in terms of, we've got the structure in place, we've got the agreements, we've got the funding, we've got the assessment, the bids are going out for the contracts now, the NGOs are in place. So that's moving along fairly quickly. I think the educations system is moving along faster than I thought it would. So it depends on the ministry.

Yes.

QUESTION: Did I hear you say that the UN Mine Action Center is the largest employer in Afghanistan?

MR. NATSIOS: Yes it is. In fact, it is the largest UN mining -- de-mining effort in the world, and the most competent and best managed and organized.

QUESTION: Do you know how many employees?

MR. NATSIOS: My memory says 5,000, but I'm not really sure. And when I say employees, other than the government. The government obviously employs more people than the UN does, but don't put that down because really not sure that's the exact, that's --

QUESTION: How many mines do you think there --

MR. NATSIOS: Oh, there are millions of mines. I don't have a figure for you, and we don't really know. We have estimates that the United Nations has made, but they're guesses. It is one of the three most heavily mined countries in the world, though, with Cambodia and Angola.



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