Frontrunner in Afghan elections promises to heal rift with West

KABUL Tue May 20, 2014 7:10am EDT

Afghan presidential candidate Abdullah Abdullah speaks during a news conference in Kabul May 15, 2014. REUTERS/Omar Sobhani

Afghan presidential candidate Abdullah Abdullah speaks during a news conference in Kabul May 15, 2014.

Credit: Reuters/Omar Sobhani

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KABUL (Reuters) - The frontrunner in Afghanistan's presidential race, Abdullah Abdullah, has promised to rescue the ailing economy by healing a rift with the West and passing laws to tackle corruption and money laundering to reassure hesitant foreign donors.

Afghanistan's economy is dependent on foreign aid but international donors, which provide a lifeline for millions of impoverished Afghans, say funds are drying up fast as most foreign troops prepare to go home by the end of this year.

Speaking to Reuters late on Monday at his heavily fortified home in Kabul, Abdullah said security concerns were a primary reason investment and economic growth were suffering.

If elected president in next month's second round of voting, the former doctor turned Soviet resistance fighter pledged to sign deals allowing U.S. and NATO forces to stay beyond 2014 within his first month in office.

"The little money that Afghans have, Afghan businessmen and women, they are holding it back, because of uncertainty," Abdullah said. "The government should establish that sort of environment in which the private sector can flourish."

President Hamid Karzai has had a rocky relationship with the United States and his refusal to sign the security deal has weighed heavily on business sentiment. He is constitutionally barred from standing for a third term.

In the first round, Abdullah led by a 14-point margin, but has been criticized for lacking a comprehensive plan to rescue the economy. The World Bank expects Afghanistan's economic growth to fall to about 3.5 percent this year from a high of about 14 percent in 2012.

Ahead of the June 14 run-off, Abdullah is now trying to convince a class of educated, urban voters that his economic agenda can compete with that of his rival, former World Bank economist and finance minister Ashraf Ghani.

In a nod to wealthier city dwellers, Abdullah pledged to introduce incentives to help small and medium businesses. These included discounted land, energy and affordable bank loans.

"There is a group of people that is better off... in the cities especially and they have purchasing power," said Abdullah. "There hasn't been any focus on this."

He also sought to reassure foreign donors threatening to withdraw aid over Afghanistan's failure to pass a series of laws aimed at fighting money laundering, corruption and terror financing, and encouraging investment in natural resources.

"Because of the lack of movement in terms of reforms... international assistance is not as forthcoming as was expected," said Abdullah, referring to stalled legislation.

"These are some of the areas in which the future government, if it has opportunity, should move very quickly."

(Additional reporting by Mirwais Harooni Editing by Maria Golovnina)

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