The Prime Minister, Julia Gillard, has committed to increasing Australia's aid to Afghanistan by $85 million a year to $250 million by 2015 in an agreement signed with Afghanistan President Hamid Karzai during a side meeting at the NATO summit.
"It is a very happy day for Afghanistan to consider ourselves partners with Australia, a people that has been so generous and kind to us," Mr Karzai said.
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Mr Karzai paid tribute to Australian men and women in uniform for risking their lives for Afghanistan's stability and thanked Australian taxpayers.
The increase in aid is on top of the $300 million in support for Afghanistan's security forces that Ms Gillard had already announced.
Ms Gillard said Afghanistan's stability was in Australia's national interest.
"Afghanistan continues to be one of the poorest countries on earth," she said.
The agreement was signed before about 20 delegates at the first day of NATO meetings in Chicago, early on Sunday afternoon US time.
Under a memorandum of understanding, Australia will:
- Work with Afghanistan to stamp out threats such as terrorism, narcotics and people smuggling;
- Support Afghanistan's security after 2014;
- Support Afghanistan's development, including through an increased aid program;
- Encourage business and investment links;
- Co-operate on migration issues; and
- Work to preserve Afghanistan's cultural heritage.
A joint commission will be established regularly to review the goals of the partnership and it is expected there will be regular bilateral forums to discuss the next stages of completion and transition.
"The partnership will give confidence to the people of Afghanistan that Australia will stand side by side with Afghanistan beyond the end of transition in 2014," Ms Gillard said.
"The nature of Australia's engagement in Afghanistan will change after transition, but Australia's commitment to Afghanistan's stability and development will endure."
The increase in aid is on top of the $300 million in support for Afghanistan’s security forces Ms Gillard had already announced.
In an earlier meeting with the United States President Barack Obama, Mr Karzai said he was "very much looking forward to an end to the war" and the day when Afghanistan would "no longer be a burden on the world".
"I'm bringing to you and to the people of the United States the gratitude of the Afghan people for the support that your taxpayers' money has provided Afghanistan over the past decade and for the difference that it has made to the well-being of the Afghan people," he told Mr Obama.
Mr Obama urged Mr Karzai to engage more urgently with the Taliban to come to a political settlement.
Earlier, Ms Gillard met Dutch Prime Minister Mark Rutte, new French President Francois Hollande, Slovenian President Janez Jansa and British Prime Minister David Cameron.
Opening the summit of NATO member states and "core partners" Mr Obama said: "For over 65 years our alliance has been the bedrock of our common security, our freedom and our prosperity, and although times have changed the reasons for our alliance has not."
- with Jessica Wright