* Calls for more foreign aid to go through Afghan channels

* Urges "massive state-building effort"

* Emphasises farming, energy to develop economy

By Francois Murphy

PARIS, June 11 (Reuters) - An international conference on Afghanistan this week should lead to a massive push to develop the country's creaking institutions and a targeted effort to develop the economy, the U.N.'s special envoy said on Wednesday.

Afghanistan will ask around 65 countries at the conference to fund a $50 billion five-year development plan, for which donors will demand that Kabul do more to fight corruption in one of the world's poorest states.

Norwegian diplomat Kai Eide, who U.N. Secretary-General Ban Ki-moon appointed as his special representative for Afghanistan in March, said he hoped the conference could create a new dynamic between donors and Kabul.

"What we need tomorrow is to see a change of course. If that change of course does not occur, then I think we will see greater disillusionment among the internationals and also on the Afghan side," Eide told Reuters in an interview.

"We have come to a point where we cannot navigate by autopilot any more," he said, calling also for Kabul to take concrete steps to fight corruption.

Beyond pledging funds, donor states are expected to commit themselves to greater coordination of their development efforts under the reinforced authority of Eide, who will be in charge of shepherding the numerous different initiatives.

Afghanistan depends on aid for 90 percent of its spending. But international donors have fallen behind in paying what they have already pledged, and much of the money goes straight back to donor countries in salaries and profits.

The lag in aid is partly due to concern about corruption. Of the $25 billion pledged for Afghanistan from 2001 until now, only around $15 billion has been spent, aid agencies say.

The Afghan development plan provided a tangible starting point for the renewed development push at Thursday's conference, Eide said, laying out his priorities, which included the hosts' stated aim of "Afghanisation".

"I want to see a clear trend towards spending more money through the Afghan budget and through the mechanisms that are under Afghan control," Eide said.

STATE-BUILDING

He said he also wanted greater efforts to develop Afghanistan's institutions and economy.

"I want to see emphasis on the building of institutions, this is one pillar," he said.

"The other is emphasis on key economic sectors that can make the economy grow," he said, citing agricultural reform and development of the energy sector.

"Economic growth will have to come from agriculture, and then we need the energy in order develop other sectors of the economy," he said, adding that this strategy would in time help tackle the issue of opium cultivation.

Afghanistan accounts for more than 90 percent of the world's production of opium, used to produce heroin, and there was a record harvest in 2007.

"When I say 'a massive state-building exercise', that is something that is going to take many years. But we have to get going, and we simply have not devoted much energy to it," Eide said, adding that it would create the capacity for Afghans to "really take leadership" in their own country.

"I do not at all underestimate the problems. They are gigantic. But if we can now all say 'this is a plan we take seriously and we will do our utmost to implement it", then it can make a difference. But it's going to take a long time." (Editing by Andrew Roche)

AlertNet news is provided by