Afghans Ask RBI For Help

Kabul, September 26: | Updated: Sep 27 2002, 05:30am hrs
The transitional Islamic government of Afghanistan wants the Reserve Bank of India (RBI) to help it in evolving procedures relating to a forthcoming currency exchange programme. Torek Faradi, senior advisor to the Afghan finance minister and the Afghan central bank, has told visiting Indian industrialists this afternoon that he intends to end the spectre of nearly four parallel currencies in circulation, many of the notes being fake too. Mr Faradi is seeking 50 officers from the RBI, Confederation of Indian Industry-International president Arun Bharat Ram told FE. Currency instability, alongside the absence of a land route through Pakistan, remains the biggest problem before Indian companies in getting business in Afghanistan.

The Afghan government realises that many notes in circulation are fake, but it wants to to a one-time replacement exercise, Mr Bharat Ram said. Businessmen present at CIIs made in India show here told FE that they expect the new Afghan currency to settle at 40 units to a US dollar, as opposed to an astronomical 40-50,000 to a US dollar at present. A senior ministry of external affairs (MEA) official confirmed that RBI has been asked to help. Some expertise has already been provided, and more will be on call no sooner we are asked, the official said.

Indian brands of tea like Natraj lost a great deal of the market due to currency and transport. At Rs 40 a kilo, the new Ariana Airlines cargo flight from Chandigarh isnt a cost-effective option. I hope things are on the verge of change! said Tea Board special officer Asit Kala. In this context, Mr Faradi indicated that he wants Indian banks to set shop in Afghanistan, though he would limit the number of licences learning from the Malaysia experience, Eicher chairman and managing director S Sandilya told FE.

CII will now request the Union commerce ministry to constitute a development equity fund out of Indias $100 million line of credit ($30 million of this amount has already been exhausted, according to foreign secretary Kanwal Sibal) to Afghanistan, Here, we are not looking for a subsidy. But it would certainly help if government thought of ways to make Indian products more competitive vis a vis our rivals, argued former CII president Subhodh Bhargava. The MEA seemed open to such a fund. On the transportation side, Afghan authorities have indicated that they will ask the US to ask Pakistan to open up some pre-specified land routes for Indian companies. This issue is up to Pakistan and the Afghans. We are committed to open supply lines to Afghanistan from elsewhere, an official explained.

In Indias assessment, Pakistans unpopularity with the Hamid Karzai government continues to grow. Islamabad is believed to have sent out signals that it isnt convinced about Mr Karzais representative credentials. It has also blocked the supplies of wheat from New Delhi to Kabul. The made in India show has attracted 170 Indian companies and products that have evoked interest include the ambassador car (as a bullet proof official vehicle), sewing machines, agricultural implements, lanterns, and cosmetics.

(This reporter travelled to Kabul at the invitation of CII)