Dr. Omar Zakhilwal - Minister of Finance, Afghanistan HARDtalk

candidates. Now on BBC News it's time for Hardtalk. International

forces are pulling out of Afghanistan and much of the support

will dry up with its huge natural resource is worth $1 trillion. It's

one of the most corrupt countries in the world. I guessed is in carpel,

the Finance Minister. He has publicly accused the MPs of

corruption and had to defend himself against the charges. There's money

to be made but will be Afghanistan people see this? Welcome to the

show. How much do you think Afghanistan will suffer, the economy

will suffer, when the international forces leave? There is commit by the

international community for the long-term support from the

international community providing development assistance and forces

and the impact should not be that great, but the impact and the

concerns and fears that are generated by the negative publicity

with respect to that. The security forces. Just sentiment you are

saying but what are the effects? We are hearing the sounds of building

and thunder but there's been some affect people changing business

plans. Is already evidence the economy and the property market and

supermarkets and people losing their jobs with the power to buy. It has,

it's the fear and the concerns. That's why we need to go against the

negative publicity. It has really affected the mindset of the people

here and the traders and investors. It's unjustified? It's not fault of

the assessments to us. It's fear. Fear that we need to go against

that. Louise Hancock says people are fed up with Afghanistan feeling they

have not got value for what they have put in. As a result of

corruption, a result of what has happened here, there's a feeling

that an awful lot of aid is going in and people will perhaps give up?

Afghanistan has come a long way. Look at the indicators, healthcare,

look at education. From a few will hundreds out and men to now millions

of students in the school 's. The GDP is up to about $700. That's all

dependent upon aid about 90% of the national budget. It's the

effectiveness of it. To keep that aid you need to prove you are doing

something about corruption. Absolutely. You shocked and

delighted people when you named six MPs in Parliament who you said were

corrupt. They all deny it but give us an example of the things you

spoke about? Smuggling, for example. You talk of MPs calling you

up allowing illegal vehicles into the country? They have said that

actually you are just accusing them because they tried to impeach you. I

have submitted my evidence to the Attorney General and he says they

should resent themselves for investigation and now they are

resisting and they need to clear their names. I was accused. I went

to the Attorney General and asked him to investigate me and I was

cleared. You have not produced evidence and you will make it

public? I don't have too. The investigation and the power of

investigation. You will provide evidence? I have. They are

investigating. Why only those six, because everyone says it's far more

wides read. You picked those six who went after you. I had evidence

against the six and I cannot give you a figure but anyone else with

evidence should come forward. They talk about regions. Some of them had

served in important positions and I have the evidence. You sat in the

Finance Ministry and there was Customs under that and one imagines

an awful lot of those deals and illegal corruption was going on. You

could, surely, have got to the bottom of it going public, not just

about MPs but against some of the very powerful people in the country,

former warlords who sit in senior positions? I have taken action. In

Customs, the biggest number of people who have been fired and

replaced, they were primarily from customs. Three months ago I replaced

every direct in the customs. Will you say that any time you come

across anything that is corrupt? Absolutely. We will explain as a big

thunderstorm going on here. It's usually far hotter here. We are

talking about the trouble within the political class. A US official

quoted in the New York Times said Afghanistan is the United States. Is

he right? The big contracts, certainly, they are open to

corruption. Contracts we have nothing to do with. People who make

hundreds of millions of dollars here and don't pay tax. There are

contractors who have violated us and have been involved with smuggling.

Here, lots of money comes through. 20% is taken up coming through the

budget from the Government and 80% is spent. That's the problem. That's

also because people don't trust it going through the Government and

non-government sources may have their problems. Absolutely. When

there is money in the system countries like E and a stone --

Afghanistan, you cannot say you don't trust the budget. Actually, to

use a phrase, the fish rots from the head. The leadership in Afghanistan

needs to tackle this and it is not. We have, we have. Not compared to

where we stand. Some of the key indicators. The open budget index,

where the fourth most transparent with a score of 56 to 59. Four years

ago it was down to it eight. The president is doing all he can? We

can certainly do more but on the whole. Could the president do more?

He certainly could do more but he's look at one of the sources and

contributing to the corruption here of opium. This country could not

survive without it could it? It can, it can, and we need to get to the

bottom of this question. In the name of fighting drugs, we have seen not

much of that but who is spending it in what ways? The livelihoods that

was promoted stop. These are mostly led by UN organisations. I've seen

the situation in Helmand province which constitutes nifty % of the OPM

from Afghanistan. They have managed to reduce it a bit that they still

talk about three quarters of the level from peak in 2006. Ten years

ago, 26 provinces were producing opium but today it's only a handful

of provinces producing. When you are out they provide alternatives the

suggestion is that they cannot do anything until the central

government goes after those at the top, those making the money. That

people at the top are not here stop its the international media. It's in

Central Asia, Russia, Europe. It's the Mafia in Europe. You are saying

the opium from the UK where a lot of it goes, if the UK sorted out the

drug problem Afghanistan would have no problem? If you can't deal with

there, we will have established institutions, sophisticated

systems. Here, this country has institutions and security in most

places where opium is produced. There are individuals here making

millions. There are also in Europe. The government should go after them

and that's not happening. I think you need to do your research to go

out there to see how many people are behind bars because of it. Yesterday

and today in Customs we arrested two people smuggling heroin and they are

in prison today. If the international community over the

past 12 years was unable to deal with opium, what hope is there that

the national government would be able to cope with it after 2014? It

will expand, isn't it Western up with opium, if there is no

international response it would be simultaneous and the demand and

supply and that is not much hope. You make it sound like the opium

problem in Afghanistan is down to the outsiders. Stop we do supply but

I told you we do have security in place. For example, we are affected

in some places. Places with no security are at risk. Will

Afghanistan lose any aid if it does not tackle this problem? It should

not, it is an international problem. Let's turn to what could be

the salvation for Afghanistan, everyone points to this, the huge

natural resources here. Mining, oil, the geological survey did an

assessment saying it's probably worth $3 trillion. Possibly more.

How much do you think? I think it's much better than that. Bigger than

$3 trillion. There's been a few deals struck with Chinese companies

and others. There's been an accusation that there's been very

little transparency. It's a game, the whole neighbourhood with

transparency we have a very transparent system in place. We are

close to being a member of one of those organisations. How can

Afghanistan benefit? Some countries have been cursed by the unnatural

resources. Transparency, transparency, transparency. What

needed to be done is done. We are more transparent today than we were

last year. Certainly more than a couple of years ago. We are created

to be more transparent in every contract, every contract has been

public on websites. Even a member of. Is Afghanistan getting a good

deal out of deals it has struck already? Absolutely. We have

international adviser is, we have oversight, we had used reviews and

it is the best we can do. What should Afghanistan get out of it? In

some places there is no infrastructure, there is no

security. Is the price effectively the reward for Afghanistan that

roads are built. But actually, a lot has to go out of the country but

what you get in return is infrastructure, rail lines, roads.

Again, in central Afghanistan, for example, a Canadian company won the

bid and it is a really landlocked area. They have a royalty rate of

8%, I believe. It works really well with international royalty rates.

How much better can be get on that? We have a commitment from these

companies to build the infrastructure and connect

Afghanistan to the region. It is the icing on the top. When will

Afghanistan realise the benefit of that? We don't have infrastructure

in place, with silver security concerns. It will start slowly. --

we still have security concerns. We believe that by 2016 or 2017 we will

start having better revenue. It will pick up and eventually this will be

better. What percentage of the economy is this going to be? Revenue

wise, we believe that it will eventually be 14 to 15% of the

revenue. If you want this level of support from mining and oil, if

Afghanistan is to realise its potential, it needs a strong leader.

Otherwise talking about $1 trillion is a whole farce according to this.

I just mention the numbers, I don't have to repeat them. But if somebody

comes here to strike a deal with a mining concession, they will have to

pay bribes. They absolutely have not. Look at the Chinese case. They

have bribes. Look at the Indian case. But can you guarantee this? An

international company wanting to come here to invest, it will not

have to pay bribes to do business in Afghanistan? Absolutely. Absolutely

not. They should come and see. you really believe that? Absolutely.

Absolutely. And in the process of everyday life in Afghanistan? That

is another thing. It is not just the top level. The process of everyday

life seems to depend on protection money... We have for example,

services and the municipality, no doubt about it. With the police.

what is said to individuals? Do you say, don't pay? How do you deal with

that? What I advocate is to be proactive. Believe in the punishment

in response to corruption. If you have not put enough people behind

bars who are not fighting corruption. I say, come and invest.

You are already giving us money. Let's reform these institutions.

Vehicle registration. The same money that could be spent on bribes has

other uses. I say, help us, so that instead of three, it can be...

if you want something done, passport, visa, they can't tell you

when to get it back, so you pay. Absolutely. We need money for the

system, we need investment. But use a punishment, people don't pay the

police can end up in prison. I am not saying that they should not be

law-enforcement or punishment for corruption. What am saying is that

we could reduce 60 to 70% of the corruption by streamlining

procedures. Investment is required. In some places we have already done

that. Customs is one of those examples. You need to wean yourself

off international aid. The Financial Times reported that the head of one

foreign agency here just a few months ago said, need has been a

curse. The reason he gave us that exports dry up as there are more

rewards in going into business to support the donors than trying to

export pomegranates. Really?It has been a curse. Each creates

dependency and that is what we continuously pressure at the donor

is to spend over -- to spend the aid in such a way that it is not create

dependency, that it supports growth in Afghanistan. He said that the

fears of what will happen after 2013 justified. What do you base that

on? When you see growth coming from? Afghanistan has a three G

network over three quarters of the country. Telecoms is a big thing.

But whether you see growth coming from? Import substitution,

consumption, construction. Housing. We need housing. We need a precious

section, some of the best food, you must have seen it. Vegetables.

International markets. But it cost four times as much to export

something from you to the United States as it does to Pakistan.

don't need to get our food from the United States. It is not even in

Europe. We need that. We need trade. And of course the mining state

sector. More than 2/3 of this country are under 25. The huge

amount of young people who are now educated but won't necessarily have

jobs. And the security challenge. You have disaffected youth who

cannot get jobs. It is a challenge. As the Minister of Finance, within

the government, my plea is that we focus spending on three things.

Sustainable economic growth, job creation and revenue generation so

that we become self-sufficient. you are confident in the next few

years in Afghanistan that you can economically stable your own two

feet? The roadmap that we have is by 2025. If, indeed, we spend in this

focused way, the commitments of the international community. And of

course the security, particularly for the private sector, that is