The transitional government had been successful in economic recovery as the economic growth registered 16 percent in the outgoing year.

    The reconstruction process is now going on uninterrupted as major projects of road building and private-run housing schemes are underway in many parts of the war-ravaged country.

    Hundreds of national and international companies, according to officials of the Commerce Ministry, have invested millions of US dollars in different fields during 2004.

    The donor nations at the Berlin conference in early April pledged 8.2 billion dollars, of which 4.4 billion is disbursed in the Afghan year of 1383 (from March 2004 to March 2005).

    In mid April, Afghanistan hosted an international conference ontrade and investment, during which some firms from the 10-member Economic Cooperation Organization of Central and West Asian Countries (ECO), the region's major economic group, promised to invest in the country.

    To attract more investment, a trade exhibition was held in Kabul in November, during which 400 companies from several nations including Iran and the United States put their products on display.

    Dozens of world leaders, including Pakistani President Pervez Musharaf, German Chancellor Gerhard Schroeder and US Vice President Dick Cheney, made tours of Afghanistan in the outgoing year.

    Meanwhile, the country also witnessed the return of around 1 million of its citizens from exile, mainly from the neighboring countries of Pakistan and Iran.

    However, Afghanistan has made little progress in the war against the blooming illicit drugs in 2004, as the transitional government failed to check and eradicate the menace.

    Director of the UN Office on Drug and Crimes (UNODC) Antonio Maria Costa expressed concern last month that Afghanistan's opium cultivation, having jumped 64 percent to a record 131,000 hectares,the highest drug cultivation in the country's history, has become the largest in the world.

    "The fear that Afghanistan might degenerate into a narco-state is slowly becoming a reality as corruption in the public sector, the die-hard ambition of local warlords and the complicity of local investors are becoming a factor in Afghan life," Costa warned.

    With an output of 3,600 tons of opium in 2003, Afghanistan became the largest producer of the raw material used in manufacturing heroin, and the harvest this year would have reachedover 4,000 tons if the climate cooperated.

    A host of other daunting challenges also require the elected administration to deal with in the new year, including Taliban-related militancy, taming regional leaders and warlords, and reducing the poverty of the country. The president is confident that he can meet the challenges.

    "Our principal promises are ensuring lasting stability throughout the country, elimination of poppy cultivation, fight against drug trafficking, disarmament of former combatants, eradication of poverty and provision of public service," Karzai pledged before the nation immediately after taking oath as the country's first popularly elected head of state.

    The president said he is committed to delivering on these promises over the next five years.

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