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Remnants of Afghan Wars Offer Potential

September 08, 2002|CHRIS KRAUL | TIMES STAFF WRITER

SHOMALI PLAIN, Afghanistan — Driving through this once-verdant farm area ruined by decades of warfare, Shreeram Lakshman's eyes rest on the wreckage of a T-54 Soviet tank, one of dozens that litter the countryside.

"That's nice stuff. That will melt down really well," the Indian businessman said of the rusting hulk resting along a collapsed bridge in a dried-up irrigation canal. Beyond it lie dozens of ruined and abandoned mud-brick houses.

Lakshman wants to beat swords into plowshares--melt down the thousands of abandoned tanks, armored vehicles and artillery pieces that blanket Afghanistan to make the steel rods, beams and sheets that could be the building blocks for this devastated nation's reconstruction.

The abandoned armor testifies to the billions of dollars the Soviets poured into their occupation of Afghanistan during the 1980s. But to Lakshman, the wrecks are the stuff of Afghanistan's recovery.

Despite bureaucratic disarray and a near total lack of infrastructure, not to mention this country's highly unsettled future, hundreds of entrepreneurs such as Lakshman are looking for opportunities in Afghanistan.

But the obstacles of doing business in a land with no formal banking system, no reliable telephone system, an inchoate legal structure and fledgling government are immense. The assassination attempt on President Hamid Karzai and fatal bombings in downtown Kabul last week also underscore the precariousness of Afghanistan's future.

All this presents plenty of opportunities for Lakshman's venture to fail, and odds are it will. He admits that the project is a longshot.

"There is no road map here," Lakshman said.

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Finding Opportunities

But that isn't stopping entrepreneurs from exploring business opportunities in Afghanistan for the short and long term. The government talks of untapped deposits of minerals such as coal and copper and is trying to interest foreign companies in developing its oil and gas fields.

Lakshman heads the Afghan office of the Trade Group Confederation of Indian Industry. His job is to look for opportunities for its members, many of whom seem undeterred from investing in Afghanistan despite its problems. Like entrepreneurs the world over, they want to be in on the ground floor of what could be the next lucrative business opportunity.

One interested Indian businessman is Ashok Goyal, who is mulling over a $1-million investment in a smelter--which would be Afghanistan's first--to be built in an industrial park in Kabul, the capital.

The operation he envisions would use only about 35% of the metal in a typical heavy tank; the rest is too thick for the proposed smelter and would have to be sold to steel mills in Russia or Ukraine.

Goyal is not the first to see a profit in Afghan war junk. During the chaos of the early 1990s, after the Soviets withdrew and Afghanistan was racked by civil war, most of the country's easily transportable iron waste was taken to Pakistan and Iran and sold as scrap. What is left is heavier and more difficult to dispose of.

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Demand for Steel

Goyal said his project would employ 200 people and sell into a market crying out for domestically produced steel.

"All of Afghanistan's steel is brought in from other places, and it's very expensive to transport it," Goyal said, adding that the poor road system increases the costs of delivery.

Afghanistan also was systematically plundered of factory machines, high-tension wires, metal light poles and roofing--anything that could be picked up and rolled away.

The looting of industrial machinery and infrastructure, on top of myriad other calamities suffered over the years, has left Afghanistan's economy in desperate shape.

"It's as bad as Dresden in 1945," said one U.S. official who asked not to be identified. Total annual economic output is about $5 billion, one-third that of impoverished Ecuador, although it has nearly 2 1/2 times the land mass and twice the population of Ecuador.

The United States, the European Union and the World Bank soon will unveil a massive road-building plan to boost the government of President Hamid Karzai and make transporting goods more efficient. Completion of any major road projects, however, is at least two years away.

"Although industrial policy is not fully realized in Afghanistan, there is a lot of potential," Goyal said.

The country has never had a steel industry, but Lakshman and Goyal want to change that. The demand for recycled steel is high. The country's reconstruction will need reinforcing steel rods and beams for rebuilding ruined housing, schools, hospitals and office buildings.

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Thousands of Tanks

There is enough material to supply the Indians' planned smelter for several years. The Defense Ministry estimates that 8,000 Soviet tanks and armored personnel carriers are rusting along the roadways, valleys and mountain passes, successively used and then abandoned by the Soviets, Afghan civil warriors and Taliban army over the last two decades.

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