Afghanistan Telecom Brief
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Afghanistan Telecom Brief By Ken Zita In 2002, Afghanistan’s prospects for telecom appeared bleak. The political instability and profound poverty Contents following 23 years of continuous conflict suggested Political and Economic Brief 2 that Afghanistan would have neither the economic Demography and Economy 4 means nor political will to restore its shattered Telecom Policy Environment 7 communications infrastructure. After just two years, Telecom Market Overview 9 dramatic progress has been made. The government has approved a sector development action plan; put in place a progressive policy and regulatory roadmap; and attracted an estimated $130 million in private investment. In this short time, more than 170,000 mobile users have been added – increasing the number of people with access to telephone by a factor of five. Throughout 2004 the Ministry of Communications will begin implementation of several major projects Key Indicators that promise to make a profound impact on the Transitional Islamic State of country’s overall pace of change and continued Afghanistan progress toward civil security. A new Population ~25 million telecommunications law under the recently ratified GDP $4 billion (2002-3) constitution will separate the government’s role from GDP growth* 28.6% (2003) service operation; establish an independent regulatory GDP per capita $180-$190 authority; identify clear property rights for the private PPP $19 billion PPP per capita $700 sector; and define market-oriented rules for Literacy 36% interconnection and the issuance of licenses and Phone lines 85,000 (2004) tariffs. Phone density 0.34 (2004) Mobile phones 500,000 (2Q04) Significant commercial projects are also being Sources: U.S. Department of State, CIA initiated by the state carrier, Afghan Telecom, with the Factbook, World Bank, Network Dynamics assistance of the international donor community. A national satellite network will be commissioned to link provincial capitals and major towns as well as outlying district areas. Local access networks are being expanded with wireless systems acquired through international competitive tenders, and a planed fiber optic backbone is expected to progress from feasibility and planning to implementation, with active private sector participation. Despite the overall level of market risk, Afghanistan has embraced a liberal approach to the private sector and telecom growth in the near term is expected to be strong ____________________ Ken Zita is president of Network Dynamics Associates LLC (www.ndaventures.com), a telecom sector management consultancy active in 35 countries worldwide. Network Dynamics served as the principle U.S.-appointed policy advisor to the government of Afghanistan. This paper was adapted from a Briefing Book prepared for the U.S. Trade and Development Agency conference on South Asia Communications Infrastructure in New Delhi, India in April 2004. Network Dynamics Associates LLC USTDA South Asia Communications Infrastructure Conference www.ndaventures.com New Delhi, India – April 21-23, 2004 Afghanistan Telecom Brief 2 Political and Economic Brief Afghanistan continues to astonish and captivate the world with the resilience of its people and culture. Throughout two decades of conflict Afghanistan has survived a Soviet invasion and occupation; superpower proxy warfare; a nasty internecine civil war; political and military tinkering by powerful neighbors; an Islamic fundamentalist regime led by the Taliban, which devolved into a global terrorist client state; five consecutive years of extreme drought; and the military firepower of the American-led Operation Enduring Freedom. Roads, electric power plants, hospitals, schools, irrigation and telecommunications infrastructure, sparsely developed before the quarter century of destruction, were in ruins by the time the Taliban were ousted in December 2001. Unlike Iraq, the political and economic reconstruction process in Afghanistan is successfully passing key milestones. Afghanistan benefits from the presence of a broad multinational coalition coordinated by the UN and supported by donor agencies and many nations. The International Security Assistance Force (ISAF), a 5500-strong international peacekeeping force, has had a positive impact protecting Kabul. After transitioning to North Atlantic Treaty Organization (NATO) command in February 2004, ISAF began to deploy beyond the capital into provincial areas. As of April 2004 the U.S. leads an additional force of 13,500 that has stepped up operations in a coordinated effort with Pakistan, Operation Mountain Storm, characterized as a ‘hammer and anvil’ approach in seven southern and eastern provinces. U.S. forces are now also leading Provincial Reconstruction Teams (PRTs). The PRTs reflect a shift in strategy away from large military deployments to a “hearts and minds” campaign focused on community-level civil projects and improved local intelligence. By summer 2004, 16 teams will be in place, each consisting of 60 to 100 members tailored to a region's specific needs. Taliban elements and allies in Pakistan continue to operate out of the Pashtun tribal belt, attacking Karzai supporters, foreign aid officials, and the U.S. military. The new Afghan army and police are making good progress but training will take time, forces remain weak and recruitment lags force demands. Regional warlords, entrenched since Afghanistan’s civil war and growing stronger with bumper profits from drug trafficking, continue to pose challenges to the evolution to democratic rule. Overcoming autonomous local leaders and warlords outside the capital pose a big challenge to central authority. The most prominent regional leaders are Ismail Khan in Herat, near Iran, ethnic Uzbek warlord Abdurrashid Dostum in the northwest and his rival Atta Muhammad around Mazar-e-Sharif, and Gul Agha in southern Kandahar, as well as some functionaries who work for the transitional administration. UN Secretary General Kofi Annan highlighted the dire security situation in December 2003: "Unchecked criminality, outbreaks of factional fighting and activities surrounding the illegal narcotics trade have all had a negative impact." The framework for post-war Afghanistan and the political process for establishing a permanent national government were set at the December 2001 Bonn Conference. At that time, representatives of Afghanistan’s major political and ethnic groups elected now-president Hamid Karzai as chief of the transitional authority. Karzai, an ethnic Pushtun, anti-Taliban activist and son of a prominent political family, has acted shrewdly since being installed as leader. In accordance with the Bonn accord, Afghanistan’s loya jirga (grand assembly) met in June 2002 and elected Karzai president of the Transitional Islamic State of Afghanistan (TISA). It met again in December 2003 to debate and ratify a new constitution, superseding the 1964 Network Dynamics Associates LLC USTDA South Asia Communications Infrastructure Conference www.ndaventures.com New Delhi, India – April 21-23, 2004 Afghanistan Telecom Brief 3 constitution and amendments made during the Taliban period. The constitutional adoption process posed the biggest confrontation of Karzai’s presidency: a strong minority of delegates opposed the presidential system that was later adopted, favoring instead greater provincial autonomy. In the build-up to the loya jirga, the Taliban stepped up their assassinations and kidnappings of foreign aid workers and contractors and their attacks on U.S. and Afghan soldiers in southern Afghanistan. The new constitution is an inspiring document, pledging a multi-ethnic future that defends universal human rights and provides protection to minorities and women. The difficult work of implementation lies ahead. Presidential and parliamentary elections scheduled for June 2004 have been postponed under the advice of the UN Mission in Afghanistan (UNAMA), the European Union and others. Security conditions remain dangerous or uncertain in at least a third of the country. Reports as of 1Q04 indicate that only 8 percent of eligible Afghan voters have been enrolled; among women, only 2 percent have registered. The UN has said that for the elections to be considered successful, at least 70 percent of eligible voters should be registered. The voluntary repatriation and resettlement of over 2 million Afghan refugees from Pakistan, Iran and the Central Asian Republics has been an extraordinary achievement. Afghan refugees have posed an overwhelming crisis for the international humanitarian assistance community and neighboring countries. For twenty years, an estimated 4-6 million refugees fled to Pakistan and Iran alone, plus those internally displaced within Afghanistan and 100,000 refugees from Tajikistan’s civil war in 1992-3. UNHCR estimates that 1.9 million refugees from camps in Pakistan, 670,000 from Iran and 230,000 internally displaced Afghans have returned home since voluntary repatriation efforts began in 2002. Many have received materials for rebuilding homes from UNHCR. UNHCR is optimistic that another 400,000 Afghans will return in 2004 from Pakistan’s North West Frontier province, under a tripartite agreement between UNHCR, Afghanistan and Pakistan. Despite many positive developments, Afghanistan remains an insecure country with daunting challenges. Political tensions over central leadership remain high. The Karzai administration is a coalition government comprised of former Northern Alliance supporters (ethnic Tajiks) and Pushtuns (who comprise approximately