A "Greater Central Asia Partnership" for Afghanistan and Its Neighbors

 
4. Economics
Social stability, openness, and institutional trust all thrive best in a steadily growing 
economy. An expanding economy is necessary also to support critical public 
investments in areas as diverse as education and police. Afghanistan and nearly all of 
its neighbors in Greater Central Asia are all experiencing strong economic growth. 
Key measures for reinforcing this trend include the following: 
1. In Afghanistan, tax reform, including elimination of nuisance taxes and the 
successive introduction of simple flat-rate taxes on production and 
consumption, property, and income.
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Taxes on the import of machinery and 
raw materials should be suspended and an eight-year tax holiday declared for 
foreign direct investment. 
2. Use fast-track aid to the public sector to rebuild the tax system and put it on a
fair basis. 
3. Initiate efforts to enable Afghanistan and other countries of Greater Central 
Asia to gain access to loans from the Export-Import Bank and thereby expand 
and subsidize U.S. investment in key sectors of GCAP economies. 
4. Strong U.S. support for the entry of Afghanistan and other non-member 
GCAP states into the World Trade Organization, providing assistance on 
reforms needed to achieve it. 
5. Coordinate policies and initiatives to facilitate investments from the U.S. and 
other countries (including GCAP states) that cross borders within the GCAP.
The establishment of regional GCAP banking should be a priority.
6. Targeted waivers of U.S. import duties, especially on key agricultural products 
from Afghanistan. 
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Afghanistan-American Chamber of Commerce, Reflections and Recommendations on Tax Policy,
Washington, 25 January 2005. 

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A ‘Greater Central Asia Partnership’ for Afghanistan and Its Neighbors
 
 
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7. Identify and address instances where NGOs are competing directly with the 
private sector and thereby retarding its development. 
8. Development initiatives directed towards main pockets of poverty throughout 
GCAP states, including the southeastern zone of Afghanistan, the Panjshir 
valley, both Afghan and Tajik Badakhshan, and Baluchistan in Pakistan. 
Mountain regions warrant special attention as they have been the main 
incubators of extremism and violence.