Karzai Seeks Foreign Investment From Indian Companies

Afghanistan interim leader Hamid Karzai visited India on February 27 on a mission to attract additional foreign investment for his country's reconstruction. Both Karzai and his Indian counterpart, Prime Minister Atal Behari Vajpayee, sought to dispel the impression that closer Afghan-Indian ties would pose a threat to Pakistan.

Karzai led a 36-member delegation of Afghan political and business leaders on the visit to New Delhi. The delegation included Foreign Minister Dr. Abdullah Abdullah and other top officials in the interim administration's planning, rehabilitation and reconstruction, information and commerce departments. The officials held talks with their Indian counterparts about assistance to Afghanistan and possible joint projects.

In a speech to leading Indian business executives, Karzai said that India's solid industrial and technological base could help boost Afghanistan's future development. However, the interim leader did not attempt to gloss over Afghanistan's existing problems, caused by over 22 years of civil strife. He said his government's first order of business would be "to reach provinces, to reach people" who need salaries or owe taxes. In this spirit, he promised complete transparency and a good environment for Indian businesses that decide to invest in Afghanistan.

Local political observers portray Karzai's visit as a goodwill gesture in recognition of India's help in promoting Afghan reconstruction. India is providing humanitarian and financial assistance to Afghan education, health, agriculture and information technology. And New Delhi also pledged US $100 million in financial aid to Afghanistan at the international donors' conference held in Tokyo in January. After February 27 talks, Vajpayee announced that India would contribute a further $10 million to the World Bank-managed Afghan Reconstruction Trust Fund.

Showing the same diplomacy that impressed United Nations delegates during a January visit to New York, Karzai appeared determined to remain neutral in the rivalry between India and Pakistan. Vajpayee dodged questions about how Indo-Afghan ties affected India's relationship with Pakistan, saying that he would work with Karzai to ensure peace and stability in the region. The two jointly resolved to combat terrorism and religious extremism in all forms.

At a joint press conference, Karzai denied that India had deployed peacekeeping forces on Afghan territory. He said Indian officials would contribute troops to an international peacekeeping force only if directly requested by the United Nations.

Karzai has repeatedly called on the UN Security Council to authorize an increase in the roughly 5,000-strong peacekeeping force stationed in and around Kabul. [For more information, see related Eurasia Insight story]. In New Delhi, Karzai met with British Foreign Secretary Jack Straw to discuss the peacekeeper issue. Karzai reportedly asked Straw to push for more UN peacekeepers to be deployed in up to five Afghan cities. In January, British Prime Minister Tony Blair declined a similar request; Britain is leading the 17-nation peacekeeping force.