AFGHANISTAN - TRUCKER STRIKE DISRUPTS COMMERCE AND DELIVERY

UNCLAS SECTION 01 OF 04 KABUL 001542

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E.O. 12958 N/A
TAGS: ELTN ETRD MOPS PREL KCRM ELAB ASUP AMGT AF
SUBJECT: AFGHANISTAN - TRUCKER STRIKE DISRUPTS COMMERCE AND DELIVERY
OF SUPPLIES TO US TROOPS

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SUMMARY
--------------


1. (SBU) A truckers' strike called by a Peshawar-based transport
association has stopped containerized traffic from entering
Afghanistan at the Torkham border crossing since April 27. The
truckers are protesting taxes, bribes and illegal collections they
have to pay on the highway between Torkham and Kabul. The strike
has disrupted supplies for the U.S. Military, which has over 800
container loads stranded between Peshawar and Torkham. The GOA is
working at senior levels to address the truckers' demands and
believes an end to the strike may be near. Embassy has engaged the
GOA to encourage swift resolution.


2. (SBU) The action by the truckers has served to highlight
obstacles encountered by truckers on transit trade routes in
Afghanistan and raise these to the attention of the top levels of
the GOA. Many of these difficulties reflect fundamental governance
deficiencies which will require the exercise of strong GOA political
will to address. In particular, the Ministry of Interior needs to
step up to the plate. The GOA has persistently complained about the
impediments faced by Afghan traders in moving their exports and
imports through Pakistan. While the GOA and the traders have
legitimate grievances on that score, we hope this confrontation will
drive home to the GOA that it has to get its own house in order.
END SUMMARY.

WHEELS JAM
--------------


3. (SBU) The Peshawar-based Pakistan-Afghanistan Transport
Association has been observing a "wheels jam" strike since April 27,
2007, to protest high legal taxes and illegal collections that
truckers have to pay between Torkham and Kabul. The strike, which
is also supported by the trucking industry within Afghanistan, has
shut down containerized traffic from Pakistan into Afghanistan on
the Peshawar-Kabul highway. The truckers have three specific areas
of concern: the Governor of Nangarhar's unauthorized
"reconstruction" tax on truckers; a proliferation of checkpoints,
including those manned by Afghanistan National Police (ANP) and
Afghanistan Border Police (ABP),where truckers are required to pay
"taxes and fees"; and the level of legal taxes and fees. Underlying
these specific demands is a more general discontent at the
harassment meted to truckers at multiple checkpoints and the bribes
they have to pay to get through.


4. (SBU) According to our reports, as of Saturday (May 5) evening,
hundreds of trucks were lined up along the Peshawar-Torkham highway.
Over 800 of these are carrying supplies for the U.S. Military and
this number is increasing by an average of 50 trucks a day. If this
strike continues, U.S. troops serving in Afghanistan could begin to
experience shortages of some solid goods supplies they receive
through Pakistan. It could also begin to affect catering and other
services to the Embassy and the international community in Kabul.
Several new vehicles being shipped to the Embassy in containers have
already been stranded. Embassy is engaged at various levels in
urging a swift resolution to the issue.

AGREEMENT REACHED, NOT YET IMPLEMENTED
--------------


5. (U) While containerized traffic was still not crossing the
border as of Sunday (May 6) morning, Finance Deputy Minister
Ibrahimi -- the Finance Minister and the senior Deputy Finance
Minister are out of the country -- told Embassy officers on May 6
that an agreement had been reached between the GOA and the truckers
to end the strike on Sunday. Ibrahimi, who is responsible for
customs and revenue collection, said he planned to follow up
immediately to find out why the traffic had not yet reopened.

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6.(SBU) According to Ibrahimi, the outline of a deal between the GOA
and the truckers had been brokered by Vice President Khalili on
Thursday (May 3) when he brought together the concerned GOA
Ministries and the strikers and their trucking unions, including the
spokesman of the Pakistan-Afghanistan Trucking Association. Khalili
subsequently constituted an inter-ministerial working committee
headed by Ibrahimi to address the truckers' demands on a fast track
basis and provide a set of agreed recommendations within a month.
In turn, the truckers reportedly agreed to lift their strike on
Sunday (May 6). Ibrahimi's working committee is scheduled to meet
this week to propose solutions. Once the proposals are agreed to by
the truckers, they will be forwarded to Khalili, who will take them
up with President Karzai. Ibrahimi said the protestors' demands
could be placed in two categories: those that can be addressed
immediately; and those that would require significant regulatory or
legislative changes.

THE TRUCKERS' DEMANDS
--------------


7. (U) Reconstruction Tax: The striking truckers want elimination
of the Nangarhar Governor's 3,000-5,000 Afghani ($1-49Afs) tax on
each truck going through his province. Ibrahimi confirmed that this
tax was wholly illegal and the Governor should cease collecting it
immediately. He noted there was little accountability on where this
revenue goes. Ibrahimi claimed this practice is not uncommon in
other provinces as well where there is relatively heavy cargo
traffic. He said that there were provisions in the GOA's budgetary
system for Governors to request and receive funds from the central
government through the Ministry of Interior for their legitimate
development and operating expenses.


8. (U) ANP/ABP Checkpoints: A second concern is the multiple
checkpoints along Highway A-1 from Torkham to Kabul, where trucks
are stopped by men in ANP or ABP uniform and asked to pay a fee. It
is quite likely these are legitimate ANP and ABP personnel. The
lack of any action against these checkpoints suggests that the
practice is condoned at high levels in the Ministry of Interior
(MOI) and the collections may also find their way up the chain.
Ibrahimi said these fees had no basis in law and needed to be
eliminated. He noted that the MOI's Traffic Department does collect
annual vehicle registration fees, implying that the MOI's police
checkpoints may be using registration verification as one of the
pretexts to stop and shakedown the trucks.


9. (U) Municipal Taxes: The transportation industry also wants
removal of the "municipal tax" on trucks levied by Kabul and several
other cities. Kabul has checkpoints around the city to collect this
tax when trucks enter the city. While this tax is legal and on the
books, Ibrahimi referred to these municipal fees as one of five or
six "nuisance" taxes which the MoF wants eliminated. It is drafting
legislation to repeal these taxes and fees.


10. (U) Road Toll Tax: The protesters want changes in this new
road toll introduced last fiscal year by the MoF. The tax is
intended to provide for maintenance of new roads being built around
the country. According to Ibrahimi, the tax, as originally
conceived, was to be payable on a quarterly basis, but after
objections from the trucking industry, MoF lowered the tax and
reduced the levy period from quarterly to monthly and then to
weekly. The truckers, who argue that their trucks generally enter
Afghanistan sporadically, now want this tax to be levied only when
and if the truck enters Afghanistan. This will make administration
of the tax difficult and require new supplies of stickers, Ibrahimi
said, but MoF is willing to accept the truckers' demand. He did
express frustration with the frequently changing position of the
truckers on this issue over the last year.


11. (U) License Fees: The strikers are also protesting MoF plans
to enforce the payment of an annual license fee of about 150 Af per
ton capacity that has apparently been largely ignored by both the

KABUL 00001542 003 OF 004


GOA and the truckers for the last 25 years. What the truckers find
even more unpalatable is the threat by the MoF to collect the fee
retroactively for however long the truck has operated in and out of
Afghanistan. Ibrahimi observed that as long as the law is on the
books, it is incumbent on the MoF to enforce it. Not only do the
truckers not want to pay the tax retroactively, they want an
exemption from this tax going forward. (Note: While Ibrahimi did
not indicate a solution to this issue, we find it unlikely that the
GOA could go back 25 years in its records to support a retroactive
collection of this fee. The more plausible solution appears to be
that the GOA would write off the past nonpayment and the truckers
would drop their demand for an exemption from the tax going
forward.)


12. (U) Ministry of Transportation (MoT) Fees: The protesters want
removal of two "movement fees" collected by MoT at checkpoints on
the Torkham-Kabul road. These fees are legal but Ibrahimi is in
favor of their repeal. He believes that tax and revenue collection
responsibility should only be vested in MoF. Besides, checkpoints
run by multiple agencies to verify documents or collect fees lead to
multiple opportunities for graft and corruption.


13. (U) Ministry of Commerce and Industry (MoCI) Fee: In response
to the strike, MoCI eliminated its 180 Af commercial fee. MoCI's
Director General of Foreign Trade and the Special Assistant to the
Commerce Minister told us that the Ministry is sympathetic to the
truckers' plight. MoCI believes that the high costs and obstacles
faced by transporters are hurting traders and exacting a toll on the
Afghan economy. The Commerce Minister intends to raise this within
the Cabinet to urge his colleagues to address the strikers'
demands.


14. (U) Reciprocal Rights for Afghan Trucks: The Afghan trucking
industry also has demanded that Afghan trucks be allowed to ply to
any city in Pakistan, just as Pakistani trucks are allowed to take
cargo to any place in Afghanistan. Currently, Afghan trucks can
only go as far as Peshawar. Since this is not something the GOA can
grant, the GOA should be able to readily agree to take up the issue
with Pakistan, possibly at the next Joint Economic Commission
meeting.

MEDIA COVERAGE
--------------


15. (U) Media coverage of this strike within Afghanistan has been
sparse. We assume this is because the strike is not having an
immediate impact on the common Afghan as only containerized traffic
is being stopped. Flat-bed "jingle" trucks which transport the
imported staple food and other necessities used by most Afghan
people are getting through.

COMMENT
--------------


16. (SBU) Embassy understands from Ibrahimi and others that the
strike may be on the verge of being lifted. This would be good news
for the Afghan economy and the U.S. Military. If the strike lingers
on, the Embassy will approach the GOA at higher levels to urge
actions to resolve the differences with the truckers.


17. (SBU) Issues related to extortion, corruption and other
impediments to cross-border trade on the Afghan side have festered
for some time. The action by the truckers has served to sharpen the
issues and raise them to the attention of the top levels of the GOA.
In the past, the GOA has issued directives to crack down on
extortion and harassment but little has improved. We hope that VP
Khalili and Deputy Minister Ibrahimi's working committee will be
able to develop practical solutions that address the real problems
encountered by the truckers. Embassy believes that issues relating
to the levels and the rationale of some of the legal taxes and fees
can be debated in good faith and reasonable compromises reached.
The more challenging issues are the extortion and bribes collected

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by ANP/ABP and other agencies at the checkpoints. These reflect
fundamental governance deficiencies which require the exercise of
strong political will by the GOA. In particular, the Ministry of
Interior needs to step up to the plate. We have heard that the
Governor's Reconstruction Tax will be eliminated and that corrupt
Border Police officers will soon be arrested.


18. (SBU) The GOA has for long persistently complained about
impediments faced by Afghan traders in moving their exports and
imports through Pakistan. While the GOA and the traders have
legitimate grievances on that score, we hope this confrontation will
drive home to the GOA that it has to get its own house in order as
well.


19. (SBU) Ibrahimi and Embassy contacts have hinted at or ascribed
Pakistan-sponsored political motives behind the confrontation.
Others have suggested that Taliban insurgents have joined with some
influential people on the Pakistan side to foment the stoppage to
squeeze the GOA and the NATO forces in Afghanistan. Although the
strike was driven and enforced primarily from the Pakistan side of
the border, we have no basis to agree or disagree with these
observations.

WOOD