Attachment_J.12_-_REZ_Vision_2024.pdf

REZ STRATEGY

Regional Economic Zones (REZ) are areas within Afghanistan that have the potential to develop into geographic centers of increased production and commerce, promising high and inclusive economic growth. It is buttressed by support to GIROA efforts to deliver basic health and education services and to develop a market based economy. It focuses on population centers along historical agricultural and trade routes. The zones are expected to act as catalysts for improved food security, economic development, job creation, and increased regional trade, by targeting investments in key sectors that are considered to be drivers of economic growth.

The REZ strategy offers an integrated approach to leverage the economic strengths of the regions by investing in infrastructure, agricultural value chains, and business development to assist GIROA in developing a market economy based on modernizing Afghanistan’s agricultural sector as the key driver of economic growth: and supported by promoting business development opportunities in light manufacturing, textiles, carpets, extractive industries, transport, services, and trade, consistent with the private sector development objectives outlined in the Ministry of Commerce and Industry Private Sector Development National Priority Program and the Ministry of Finance “Towards Self Reliance: Strategic Vision for the Transformation Decade” both endorsed at the Tokyo Conference in July, 2012.

REZ VISION 2024

The REZ strategy integrates a limited number of projects identified as being critical to long term development that can create multiplier effects to stimulate inclusive job creation and economic development leading to economic integration essential for sustainable growth and political cohesion of the country—and enabling Afghanistan to achieve regional integration by becoming a regional hub linking Central Asia to the sub-continent.

Objectives include assisting in transitioning from subsistence farming to agro-processing leading to developing commercial agriculture, by focusing on value chain development of high value orchard and vineyard crops, where Afghanistan has a historical comparative advantage and increasing access to both domestic and export markets. Programs that provide workforce skills development training as well as business development training, increased access to credit, and linking production to processing centers at Industrial Parks, can build an effective value chain to supply domestic and import markets—and generate jobs both in rural and urban areas.

A GIROA policy and regulatory role Is critical in providing the supporting environment to create the conditions for implementing REZ Strategy objectives. This includes tangible progress in public financial management, financial sector reform, promulgating key legislation; improving Afghanistan’s standing in the WB Doing Business Indicators (DBI), streamlining customs administration and business registration procedures, and establishing a viable civil courts system for commercial dispute resolution to encourage private investment.

To promote regional economic integration it will be important for our programs to support GIROA WTO accession, customs reform, bilateral/multilateral trade agreement implementation to promote exports and integrate Afghanistan’s economy into the region to create economic stability and long term economic growth/job creation.

REZ GEOGRAPHIC FOCUS

The Regional Economic Zones comprise a national network:

REZ East focuses primarily on the densely populated and relatively stable Highway 7 corridor from Kabul to Jalalabad and Torkham Gate, including Kunar, and Wardak. It connects agricultural and extractive industry production and processing centers to the border with Pakistan accessing domestic and export markets.

REZ North links the historical, cultural, economic, political, and commercial hub of Mazar-i-Sharif(MES) in Balkh province extending through Samangan Province to the municipalities of Kunduz and Pul-i-Khumri in Kunduz and Baghlan provinces, expanding into greater parts of Baghlan, Kunduz, and Balkh provinces and extending into Sheberghan in Jawzjan province.

REZ South links the resource corridor from Kajaki through Sangin to Gereshk, Lashkar Gah, Maiwand, Panjwayi, to Kandahar, Uruzgan and Zabul---eventually to join REZ South to REZ East and Kabul. Dominated by the Helmand and Arghandab Rivers, agriculture is the principal driver of economic growth. Effective economic development requires linking agricultural production centers in the Helmand and Arghanab River valleys to markets in Kandahar and beyond through the Weesh/Chaman border crossing into Pakistan and on through Karachi.

The REZ West Economic Hub, including Badghis, Farah, Ghor, and Herat provinces, operates in a fairly secure environment, with a long history of commercial activity and great potential for expanded economic activity in light manufacturing, high tech services, marble, textiles, transport, regional trade and economic integration..

The REZ strategy seeks opportunities to complement the Resource Corridor strategy being implemented by the World Bank, Asian Development Bank, key donors, and GIRoA. In developing individual REZ strategies, opportunities will be explored to link the zones together to the broader Resource Corridor concept and to the goals and objectives of the Almaty Consensus, CAREC, and WTO thereby creating conditions for re-establishing Afghanistan as an economically viable, stable, and peaceful transit and trade hub fully integrated into the region and linking the sub-continent to Central Asia.