UNCLAS SECTION 01 OF 03 KABUL 000491

SIPDIS

STATE FOR SA/FO (AMB MQUINN), SA/A, S/CR, SA/PAB,
S/CT, EUR/RPM
STATE PASS TO USAID FOR AID/ANE, AID/DCHA/DG
NSC FOR AHARRIMAN, KAMEND
OSD FOR BREZINSKI
CENTCOM FOR CG CFC-A, CG CJTF-76, POLAD
REL NATO/AUST/NZ/ISAF

E.O. 12958 N/A
TAGS: EAGR ECON EFIS EMIN PGOV AF
SUBJECT: PRT/PANJSHIR: THE ECONOMIC OUTLOOK


A)KABUL 00460
B)KABUL 00452

Summary
--------------


1. (U) The U.S.-led assistance effort is
transforming the economy of Panjshir Province,
,
leading to what the Governor calls the new
prosperity. He cites four areas for economic
growth: commerce, facilitated by an improved road
network; tourism, attracting visitors primarily from
Kabul; agriculture and fish farms, utilizing the
water supply of the Panjshir River; and mining of
precious stones, especially emeralds. Most economic
activity is still stamped by traditional patterns of
growing crops and raising livestock. PRT projects,
focused on infrastructure improvement and power
generation, represent the single largest force of
economic change in the province. End Summary.


2. (U) This is the third message in a three-part
series. The first dealt with the security
environment in the Panjshir; the second, with the
political context. See reftels.

The New Prosperity
--------------


3. (U) In his speeches and talks, Governor Bahlul
calls the U.S.-led assistance effort the engine of
the new prosperity. He has tried to rally the
Panjshiris behind the PRT as the on-site
ite
representation of this effort. He often points to
the U.S. road projects as tangible proof of
progress, both in terms of improving the
infrastructure and employing Panjshiris. Road
construction represents the top development priority
for the Governor, followed by power generation.


4. (U) Our contacts characterize Panjshir as a poor
province, still suffering from years of conflict and
isolation. Obstacles to growth include outmoded
agricultural practices, a paucity of arable land, a
primitive road network, and a labor exodus. But
they also cite positive factors that could drive
economic growth, such as a secure environment, the

clean water of the Panjshir River, the natural
beauty, agricultural and mineral wealth, the
national prominence of the Massoud tomb, and
proximity to the capital city of Kabul.


5. (U) The defeat of the Taliban in late 2001 led
to several economic consequences in Panjshir. Above
all, it ended the besieged isolation of the valley
and opened the way for labor migration to Kabul.
Elders, in the village of Speaker Qanooni, told us
that over half of the local workforce had moved to
Kabul in search of jobs. The opportunity for
education also draws Panjshiris to the capital. We
have heard these workers would have stayed in
Panjshir but could not find employment. Financial
support flows from Kabul back to families in
Panjshir.

The New Agenda
--------------


6. (U) In his meeting with the Charge and other
diplomatic guests Jan. 21, Governor Bahlul outlined
his economic agenda for the near and medium term.
He cited four areas:

Commerce: According to the Governor the completion
of the main valley road, now under construction
funded by the U.S., will transform the province. He
said it would connect products with markets, both
within the province and with the outside world.

Tourism: The Governor highlighted the many
attractions of Panjshir: pristine beauty,
mountainous terrain, clean air and proximity to
Kabul, the largest city in the country. He also
told the diplomats that the province needed
international investment and expertise to develop
the tourist sector.

Agriculture and Fish Farms: The Governor hoped to
exploit the clean water of the Panjshir River to
irrigate crops and establish fish farms, especially
for trout. In his view, Kabul, some 60 miles away,
would represent the main market.

Mining of precious stones: The Panjshiri emerald
deposits, according to the Governor, were second
only to Brazil. He also cited lapis mines, just
north of Panjshir. Profitable extraction required
good roads, both to the south to Kabul and the north
to Tajikistan.

The Old Economy
--------------


7. (U) Most resident Panjshiris, probably over
eighty percent, are dependent upon the land for
survival. Aside from village retail bazaars and
limited construction, security and service jobs, the
vibrancy of the economy depends upon good crops and
healthy animals.


8. (U) In a recent meeting, Wolesei Jirga member
Registani called agriculture one of the five pillars
of the provincial economy, and cited it first in
importance. He encouraged multiple smaller
development projects. Of particular concern to him
was the wild river, the Panjshir, which is the
life support of agriculture in the valley. Because
it is shallow and prone to flooding and meandering,
he stressed water management needs.


9. (U) Given the paucity of arable land, tree crops
of fruits and nuts are the most important
horticultural or agronomic crops. Poppies are not
cultivated, according to contacts among farmers and
officials. Although ill-suited to expansive tracts,
some terraced and valley land produces winter or
summer wheat, corn and vegetables. Rokha, Dara and
Paryan districts are reported to be the predominant
area for field crops. Diseases and pests impact
yields. Few technical resources or control systems
exist to minimize their damage.




10. (U) Currently, mulberries and apples are the
predominant tree crops. Khenj and Bazarak represent
the highest orchard producing districts, followed by
Dara. Because of poverty, warfare, harsh winters
and drought, much deforestation throughout the
valley has contributed to desertification and
erosion in many areas of the province.


11. (U) Reforestation and orchard rehabilitation
are leading priorities of agriculture ministry
officials in Panjshir. They particularly want to
increase almond and apricot production.


12. (U) Water management is another high priority.
Panjshir Valley is graced with reasonably good water
resources. However, because of the shallow nature
of the river, it varies in its course. The result
is flooding and subsequent loss of arable land or
destruction of water management devices such as
retaining walls, gabions and canals. And when the
river diverts, it may also result in an inadequate
supply of water to previously served canals. PRT
irrigation canal projects continue to try to address
the vagaries of the river.


13. (U) Livestock are important throughout the
province, but especially in Paryan and Anabah
districts. Kuchis graze large sheep and goat flocks
throughout the valley. They leave the valley in
fall for warmer locations in the south of
Afghanistan. Panjshiris, too, raise sheep and
goats. Goat flocks may be up to 500-600 animals and
are quite winter hardy. Most families owning cattle
have only 3-4, used for plowing and, to a lesser
extent, food. Poultry is small scale only, with the
average holding of 15-20 birds, mostly chickens, but
also the occasional turkeys, ducks and geese.

Comment
--------------


14. (U) U.S. projects are transforming Panjshir.
Progress is tangible. A new prosperity in
relative terms is dawning. For the PRT, there are
several consequences: First, the Panjshiris have
embraced our presence and, indeed, have called on
us in droves to propose new projects. Second, this
this
local acceptance has consolidated the secure
operating environment for the PRT. Third, the
Governor has allied himself closely with the PRT, so
that our success boosts his standing.

NEUMANN