THE ONCE unimaginable is happening in Afghanistan. The country's first-ever elected president will be sworn into office today, and the democratic process, started three years ago after the fall of the Taliban and ouster of al-Qaida, reaches yet another milestone. Nonetheless, it is accompanied by new challenges.

The decisive defeat of international terrorism and the narcotics networks that threaten the region will be made easier when Afghanistan and its neighbours benefit from the dividends that political stability and economic growth produce.

Canada has played an important role in that regard, and should continue to contribute towards mutually beneficial results.

While the Afghans and a large number of international dignitaries celebrate President Hamid Karzai's inauguration in Kabul, it is apparent to all that the country is only now starting to show tangible signs of reconstruction and permanent post-conflict change. The challenges associated with rebuilding and reforming a failed state that underwent almost 25 years of decline as a result of a foreign invasion, followed by internal turmoil and a terrorist takeover, are, to say the least, daunting.

Afghans are dismantling the wartime structures and replacing them with modern-day institutions, including a new national army and police, but the reform and rehabilitation of dysfunctional pre-war security, justice, education, health, energy, agriculture and administrative sectors, among others, is costly and more demanding.

The possible deployment of a Canadian-led Provincial Reconstruction Team in western or southern Afghanistan next year, in addition to the existing Kabul-based peacekeeping contingent, will be welcomed by Afghans. The decision will help security and boost reconstruction efforts.

But Canada can do more and is showing willingness to do so. It would be of tremendous benefit to set up a training institute to teach a new generation of Afghans modern-day administrative and management skills.

Agriculture, reforestation, water management and energy generation are other areas of great Canadian competence and high Afghan need. Each sector is open not only for Canadian international development aid, but also for business ventures.

Evidently, there are also risks and challenges involved by entering the emerging Afghan market. Despite having put in place a stable currency, a nascent banking sector, business-friendly laws and reformed tariff, customs and tax systems, the government and the growing private sector are collaborating to remove remaining investment barriers, strengthen financial services and fight corruption.

The next challenge facing the political process is to hold local and parliamentary elections in a secure environment next year. NATO contributions will once again be of help. Furthermore, to complete the disarmament and re-integration of armed militias (half of whom have already gone through the formalized demobilization program) to prevent the remnants of terrorism from regrouping is at the top of the government is security reform agenda, along with a credible anti-drug strategy.

The new Afghan government is also responsible for upholding the new Constitution adopted earlier this year, promoting the rule of law and human rights, including women's rights, as part of a dynamic civil and democratic society.

The continued constructive engagement of our neighbours and countries beyond Afghan borders will be crucial to ensure success in the global war on terrorism, the dismantling of the extremist agenda that fuels it, and the defeat of the drug mafia that is attempting to take the country down again.

The economic windfall in terms of trade, transit and investment is already apparent to all countries in the region, and needs to be promoted further by accelerating the buildup of Afghan roads, railway, energy complexes, oil and gas pipelines, and other infrastructure.

As recent history has demonstrated, helping Afghanistan succeed will benefit world peace and promote regional stability and prosperity. It is a win-win proposition that could backfire if we take our eyes off the ball.