Under Chandeliers, Afghans Sell U.S. Bases as Taliban Gains

  • Three major NATO bases to be transferred soon to Afghans
  • Investors worry that Afghan soldiers at bases may be targets

At a five-star hotel in Dubai, nearly 200 people in suits and military uniforms flipped through color-coded maps outlining the perks available if they bought space in soon-to-be-vacated U.S. air bases in Afghanistan.

Atta Mohammad Noor, the acting governor of Balkh province in northern Afghanistan, showed the crowd a promotional video set to upbeat folk music with polished images of natural resources and infrastructure. Slides promised “good security” and a “smooth environment” if investors put money in the Mazar-e-Sharif air base.

Camp Marmal, Mazar-e-Sharif

Photographer: Jose Giribas/Bloomberg

At the same time, just 100 miles from the garrison in the video, Afghan forces were fighting fierce street battles to retake Kunduz city from the Taliban. If it falls, Mazar-e-Sharif and other provincial capitals nearby are obvious next targets.

The events on Wednesday revealed the contrast between on-ground realities in Afghanistan and the sales pitch to bolster one of Asia’s poorest countries. Both show the difficulties the U.S. is having in ending its longest war after spending more than $700 billion and losing more than 2,200 soldiers since 2001, including five in a plane crash overnight.

The assault on Kunduz underscores doubts that the Afghan military, hindered by heavy combat losses and desertions, is ready to stand on its own. Failure to hold the city would jeopardize President Barack Obama’s plan to withdraw almost all American troops by the end of next year.

Afghan President Ashraf Ghani, who has seen peace talks with the Taliban make little progress, said on Thursday night that Afghan forces had gained full control of Kunduz following a counter-offensive.

Even if Afghan forces prove up to the task, the U.S. and its allies will be footing the bill for years. Coalition allies paid for about two-thirds of Afghanistan’s $7.2 billion budget last year, and slowing economic growth is making it harder for Ghani to generate more revenue.

Ground Floor

One way to get more cash is to turn military bases into economic zones. As U.S. and NATO forces slowly exit, they’re leaving behind massive compounds equipped with power, storage, water and residential facilities.

“Eventually when you create jobs and employment, security will become less and less of a factor," Daoud Sultanzoy, a special adviser to Ghani who oversees the Afghanistan Airfield Economic Development Commission, said in an interview in Dubai. "Right now is the best time for the keen-eyed investors to come in at the ground floor."

He said the bases are an ideal space for maintenance, information technology, service and packing industries, as well as the oil, gas and agriculture sectors.

Talks are under way to transfer three of eight major U.S. bases to Afghan authorities in the next few months: Herat, Kandahar and Mazar-e-Sharif. Some sections of the bases will continue to house coalition forces and serve as posts for the Afghan military. The bases are also home to civilian airports.

Mineral Wealth

Ghani’s biggest selling point to investors is mineral wealth estimated at more than $1 trillion. The obstacles are numerous: the country lacks skilled labor, good roads and reliable electricity, it’s a long way from the global trade routes on the world’s oceans.

In the hotel ballroom with glistening chandeliers in Dubai, attendees included representatives from FedEx Corp., DP World Ltd. and U.A.E.-based Al Futtaim Group. The U.S. Commerce Department and Afghan government sponsored the event.

Audience members grilled Afghan officials about risks, costs and legal hurdles.

U.S. military officials called the bases ripe for development, highlighting amenities ranging from vast cold storage areas, water treatment plants, fuel infrastructure, "relocatable buildings" and warehouses.

Skeptical Investors

U.S. Major General Todd Semonite, who oversees the coalition’s security transition command, tried to reassure investors over concerns that businesses would eventually be responsible for securing the bases. The coalition is still around for now, he said, and Afghan forces are stationed at many of the sites.

"I don’t want you to think that you’re out in the middle of nowhere," Semonite told the group at the event. "Very close to these airfields there is a reactionary force of some type that would normally continue to support security forces."

Still, investors have their doubts.

Ioannis Koskinas, CEO of Hoplite Group, a Connecticut-based firm with an office in Afghanistan that advises companies moving into frontier markets, said he’s interested in Afghanistan’s mining sector and that access to airfields would be a "great opportunity" in a landlocked country.

But, he added, some companies might see the Afghan army’s presence at the bases as a risk since it could be the target of attacks. They also want to know whether they’ll be guarded by police or a Western security firm, he said.

“Whatever your arrangements are, the companies are going to make a decision, either I’m going or I’m not going," Koskinas said. “They all have their different shades of grey."

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