Switzerland pledges SFr30 million for Afghan reconstruction

Some $15 billion is needed to rebuild Afghanistan over the next ten years Keystone

Switzerland has joined a group of wealthy countries pledging some $3 billion to rebuild post-war Afghanistan.

This content was published on January 21, 2002 minutes

Switzerland made the pledge at a donors' conference in Tokyo, noting that it would provide SFr30 million ($18.5 million) for the impoverished nation, chiefly for humanitarian work and reconstruction.

More than 60 other countries and 20 international organisations attended the two-day talks in Japan, which end on Tuesday.

The head of the Swiss Agency for Development and Cooperation, Walter Fust, told swissinfo that the total amount pledged was a "success, from the point of view of both Afghanistan and the international community." But he added that "political pledges are one thing and facts and reality are another."

Fust stressed that Switzerland's contribution was "minimal" compared to Afghanistan's needs, but was nevertheless a considerable sum in view of the small size of Switzerland. The amount would be honoured and paid within two weeks, he said.

The World Bank and the United Nations Development Programme (UNDP) have said that at least $15 billion would be needed over the next ten years to rebuild Afghanistan.

The Swiss delegate in Tokyo said the most urgent priority of the donors was to ensure that the interim government in Kabul had sufficient financial means to enable it to function and carry out it work.

Relief work

Aside from the initial donation, Switzerland is contributing to a multilateral fund with other countries and continuing relief support through the international food aid program, Fust explained.

In addition, Switzerland was also contributing to the United Nations High Commission for Refugees (UNHCR) and the International Red Cross.

"Swiss contributions will almost certainly continue next year, providing that conditions allow it," said Fust. "And if our humanitarian relief activities in Afghanistan end next year, we'll also see whether we can increase development co-operation further."

International donations

The United States has pledged $296 million for 2002, while Japan has offered $500 million, to be spread over the next two and half years.

The European Commission has also agreed to put up $487 million in 2002, with the EU saying it aimed to provide a total of €1 billion ($885 million) over the next five years.

The creation of a special fund for the country is also under discussion - it would be jointly managed by the World Bank, the Asian Development Bank, and the United Nations Development Programme (UNDP).

The World Bank has proposed contributing $500 million over the next 30 months, with an added $50-70 million in immediate grants. The funding is still subject to the approval of the bank's member country shareholders.

Cancelling debt

The Afghan delegation in Tokyo said it was "satisfied" with the initial donations, despite the interim government in Kabul having cited a figure of $35-45 billion over the next ten years for reconstruction costs.

Hamid Karzai, the head of the interim administration in Kabul, has also called on the international community to cancel the debt accrued by former regimes in Kabul and to reintegrate the country in international financial institutions as quickly as possible.

Karzai also admitted that there were "legitimate questions" over whether the impoverished nation could absorb the sudden influx of funds.

Swiss investors

Fust said although he hoped the international donations would go a long way towards setting up a basic infrastructure in Afghanistan, it would probably take longer before Swiss investors would feel ready to move into the region.

"It remains to be seen whether Swiss investors are ready to go to Afghanistan, or whether they'll wait to see how development shapes up," said Fust. "Of course, there's no security for investors at the moment, as there's still no government infrastructure and no legislative framework."

"But there'll be a lot of opportunities for Swiss development companies working in the field of infrastructure, particularly in energy and telecommunications," Fust added.

by Ramsey Zarifeh and Vanessa Mock

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