The territory of Afghanistan bears a considerable role in intraregional trade by connecting important strategic routes like China’s Belt and Road project that links countries of South Asia, Central Asia, and the Middle East. Although Afghanistan’s geography in theory presents many good economic opportunities for Central Asia and for the country itself particularly given that its territory would serve to connect the region with the global market, the political instability and security challenges do hamper the prospects emanating from international cooperation and intraregional trade initiatives.
That is the reason there had been many projects and initiatives between 2002 and August 2021 that aimed to improve regional connectivity through the construction and rehabilitation of national and regional infrastructure. Central Asia Regional Economic Cooperation (CAREC), for instance, is a comprehensive program that includes distinct projects aiming to open up a new market by building energy and power infrastructure between Central Asia, South Asia, and Transcaucasia. While the construction of power transmission lines has been one of the major areas of cooperation between Central Asian countries, Afghanistan, and Pakistan, running a gas pipeline from Turkmenistan through Afghanistan to Pakistan and India (TAPI) has been another area of cooperation. Major power infrastructure projects include CASA-1000 which would take advantage of Central Asia’s substantial energy resources to assist South Asia in obtaining electricity during the summer. The $1.2 billion infrastructure project makes it possible for the Kyrgyz Republic and Tajikistan to export a 1,300 MW surplus of hydroelectric power to Afghanistan and Pakistan. TUTAP (Turkmenistan-Uzbekistan-Tajikistan-Afghanistan-Pakistan) is another major power transmission line designed to improve energy security and efficiency to meet the increasing electricity demand. However, the project was met with protests by the local Hazara people in Afghanistan when a decision to shift the transmission route from Bamyan province to Salang Pass was announced by the electricity company, Breshna, as this decision was deemed discriminatory toward the Hazara people who constitute a majority in Bamyan province.
The power interconnection project between Pakistan, Afghanistan, and Turkmenistan (TAP) is a complementary project to the existing ones, CASA-1000 and TUTAP. It allows power trade between the three countries by utilizing the existing power infrastructure under the TUTAP (Turkmenistan-Uzbekistan-Tajikistan-Afghanistan-Pakistan) project as well as by investing in additional power transmission. The above-mentioned projects are important steps in creating the Central Asia-South Asia Regional Electricity Market (CASAREM) and can open up new gateways for cooperation between Central and South Asia.
Regional and Cross-Regional Trade with Afghanistan
In addition to the existing energy and power infrastructure projects, trade between Central Asia and Afghanistan had risen in the years before the Taliban take over in August 2021.
Imports from Uzbekistan to Afghanistan have grown to $433 million in 2019 compared to $168 million in 2008. The three largest exports from Uzbekistan to Afghanistan were electricity, wheat flour, vegetables, and leguminous. Similarly, exports from Afghanistan to Uzbekistan have increased from $1 million in 2008 to $2 million in 2019, however, the quantity of exports from Afghanistan remains relatively low.
Source: Data for creating this graph was collected from United Nations Commodity Trade Statistics.
Tajikistan has been a trading partner of Afghanistan that mainly exports electricity to the country. Import volume from Tajikistan has increased from $37 million in 2008 to $119 million in 2019. However, exports from Afghanistan to Tajikistan decreased from $6 million in 2008 to $3 million in 2019. Meanwhile, Turkmenistan has been a supplier of electricity in the past years and plans to export liquified natural gas (LNG) to Afghanistan and South Asia in the upcoming years. Imports from Turkmenistan have risen from $10 million in 2008 to $690 million in 2019. Kazakhstan has been exporting energy resources such as petroleum gas and other types of products including wheat and wheat flour. The trade volume from Kazakhstan to Afghanistan has increased from $152 million in 2008 to $522 million in 2019. Similarly, Afghanistan’s exports have significantly increased since 2008 from $33 hundred thousand to approximately $3 million in 2019. Trade with Kyrgyzstan consists of mostly refined petroleum, rolled tobacco, and swanned wood to Afghanistan. Compared to the base year 2008, the trade level has decreased from $5 million to $ 2 hundred thousand in 2019.
Among the Central Asia countries, Uzbekistan, which is landlocked and has extremely limited maritime shipping options, would stand to gain the most from increased regional trade, therefore, in recent years, it has significantly increased its political and diplomatic relations with South Asia. In February 2021, Uzbekistan signed a road map with Afghanistan and Pakistan’s officials for the construction of the Trans-Afghan Railway Line, a 600-kilometer-long railroad project from Mazar-e Sharif in northern Afghanistan, which is close to the Uzbek border, to Kabul and to Peshawar in northwest Pakistan. The construction of the project was launched in February 2022 with an estimated cost of $5 billion and will give Uzbekistan access to seaports such as the ports of Karachi, Gwadar, and Qasim, and access to trans-oceanic trade.
Additionally, Tashkent has signed several new agreements with its neighbors to the south and completed pilot trade projects through Afghanistan. As an example, trade with Pakistan through Afghanistan had its first trials on April 29, 2021, when cargo trucks from Pakistan delivered medicine via Kabul to Tashkent, in Uzbekistan. Under the Taliban regime, a historic trade activity between Uzbekistan and its southern neighbors was the shipment of 140 tonnes of merchandise, mostly sugar by a private trader from India to Tashkent via Pakistan and Afghanistan. These pilot projects serve as a test to determine whether trade routes through Afghanistan are safe and viable.
In general, many Central Asian countries have traded more actively with Afghanistan over the past years before the Taliban takeover. The collaboration with Central Asia in the area of regional connectivity has significantly contributed to Afghanistan’s access to commodities including energy resources such as gas and petroleum, and electricity. Among the Central Asian countries, Uzbekistan has been actively engaged in cross-regional trade through Afghanistan, and in the year after that Taliban takeover, it signed several agreements with South Asian countries, namely with Pakistan and India. Although pilot projects such as the export of goods from India and Pakistan to Tashkent have been successful and it is a promising improvement in trade through Afghanistan, it does not assure a secure and stable transit route if this trade develops on a larger scale in the future.
Key Issues of Trade with Afghanistan
Security Risks to Trade with Afghanistan Under the Taliban Regime:
Before the seizure of power by the Taliban, Afghanistan had made significant improvements, though far from being perfect, in creating an investment-friendly environment, and was preparing to become a transit hub between Central and South Asia. However, after the Taliban takeover of the country in August 2021, numerous challenges remain unresolved that prevent Central Asian countries from establishing trade routes through or with Afghanistan. A major obstacle to regional connectivity and Central Asia’s ability to trade with Afghanistan is the security situation in Afghanistan. The Taliban’s capacity to stabilize the country may be hampered by the presence of militant Islamist groups pursuing their own goals in Afghanistan, and opposition to Taliban authority manifested in both public demonstrations and the armed operations of the National Resistance Front, led by Ahmad Masood.
The Islamic State of Khurasan (ISK) or ISKP, an affiliate of ISIS (Islamic State of Iraq and Syria) declared its existence in 2015 under the leadership of Hafiz Saeed Khan by pledging allegiance to Abu Bakr Baghdadi. According to Dr. Sajjan Gohel, who has been monitoring armed groups in Afghanistan for several years, the Taliban, ISK, and other terrorist organizations in Pakistan have been cooperating with each other on several significant attacks between 2019 and 2021. Moreover, after gaining control of Kabul in 2021, the Taliban freed a large number of Al-Qaeda and Islamic State fighters from the Pul-e-Charkhi prison. ISK is active in the east of Afghanistan, and according to a UN Security Council report, the number of ISK fighters increased from 2,200 to 4,000 in the first months after the Taliban’s return to power, half of whom are foreign jihadists. In the month following the Taliban’s return; Several rocket assaults on the border between Uzbekistan and Afghanistan were reported which ISK later claimed responsibility for them. In a similar vein, the Tajik administration reported gunfire along the border with Afghanistan. ISK recruits fighters from the region, particularly Central Asia, as well as the Taliban; these incidents signal out that the Taliban are not able to fill the security gap in the border and their recruitment agendas persist to this day under the Taliban regime.
However, ISK is not the only risk to the security in the region. After 20 years of war on terrorism by the US and the international community in Afghanistan, Al-Qaeda still remains a threat and its existence poses a great risk to regional trade and cooperation with Afghanistan. During the Taliban rule in 1996, Osama bin Laden, the former leader of the Al-Qaeda group provided the Taliban with financial support while planning and directing Al-Qaeda’s international terrorist activities. Al-Qaeda established training bases in Afghanistan that were used to prepare for terrorist attacks around the world, including the September 11th attacks against the United States. A year after the Taliban’s return to power, in July 2022, the successor of Bin Laden, Ayman al-Zawahiri was killed in a US air strike in Kabul, Afghanistan. Nevertheless, Taliban spokesman Zabihulah Mujahid stated in a press conference that Taliban search parties “have not found any dead body and the investigation is going on”. The presence of Al-Zawahiri in Kabul raises more security concerns about Afghanistan and points out to the fact that the Taliban maintains its long-standing relationship with Al-Qaeda. Moreover, Jamaat Ansarullah; the terrorist organization that poses a security threat to Tajikistan, has affiliations with Al-Qaeda.
Other than the major terrorist organizations such as Al-Qaeda and ISK, small terrorist cells such as Tehrik-e Taliban Tajikistan (TTT) and Jamaat Ansarullah directly threaten Tajikistan as these cells are currently based at the border with Tajikistan by the Taliban. Taliban have given the administration of the five districts along the Tajik-Afghan border—Kuf-Ab, Khwakhan, Maimai, Nusay, and Shikai to Jamaat Ansarullah.
Growing internal conflicts of the Taliban can also hamper security situation in Afghanistan. After gaining back control in Afghanistan, conflicts over different issues have broken out among Taliban leaders as well as their followers. A few weeks after Kabul’s takeover in August 2021, Mullah Abdul Ghani Baradar, the co-founder of the Taliban, had an argument with a member of the Council of Ministers in the presidential palace. He had disappeared from the public eye for some time, and reports from the Taliban about their internal differences had been contradictory at times.
Moreover, the conflict between Pashtun Taliban and non-Pashtun ones has been another challenge that the Taliban government has been experiencing in the months after its return to power. Mawlawi Mahdi Mujahid was a Hazara in the ranks of the Taliban and served as the security commander in the Islamic Emirate of Afghanistan in Bamyan, but at the beginning of 2022, he was removed from his post. On August 26, the Taliban reported that the border forces killed Commander Mahdi while “he was trying to escape to Iran.” And the Taliban spokesman called Maulvi Mahdi “the leader of the rebels” in Balkhab, Sarpul Province. At the beginning of 2022, another conflict arose between the Taliban and their Uzbek commander from Faryab, Makhdoom Alam, who was accused of abduction. The Taliban’s interrogation of Makhdoom Alam triggered demonstrations in Faryab accusing the Taliban of ethnic discrimination. Following Alam’s arrest, his deputy allegedly threatened to lower the Taliban’s flag from the security building if they did not release Alam. More recently, an Uzbek senior commander Salahuddin Ayubi separated from the Taliban due to his dissatisfaction with the Taliban’s policies toward the participation of Uzbeks in the government. The Taliban have tried to hide this news by posting old audio of Ayubi in which he has been heard denying his separation from the Taliban. In addition, A senior Taliban commander in Badakhshan joined National Resistance Front with 150 fighters under his command due to “internal difference”. The aforementioned incidents demonstrate how easily the Taliban can disintegrate when there is internal conflict, leaving doors open for outside interference.
Additionally, the National Resistance Front (NRF) is a challenge to the Taliban and thus far the only one which is at the forefront of the fight against the Taliban. NRF takes a stance for justice, women’s rights, freedom, and independence. The NRF movement is scattered across different provinces comprised of civilians, both men and women, and former army forces from different parts of the country who cannot find any other chance of surviving under the Taliban regime and consider the Taliban a proxy of Pakistan. The fighters of the Resistance Front are based mostly in Panjshir and Andarab (a district of Baghlan province). In recent months the National Resistance Front has taken momentum and increased its offensives against the Taliban. In addition to public support, the NRF also maintains good relations with Tajikistan. The Taliban have accused the Tajikistan government of supporting the NRF many times and threatened the Tajik government by deploying Ansarullah fighters in the north to guard the border with Tajikistan.
After the U.S. withdrawal from Afghanistan, the United States has continued its occasional airstrikes on different provinces such as Logar, Takhar, and Ghazni in Afghanistan, while claiming to be targeting ISIS or Al-Qaeda. This already indicates that terrorist organizations other than the Taliban continue to operate and might grow faster under the Taliban regime. Additionally, whether by military action or by other means, the National Resistance Front’s activities can be a problem in the long term to the Taliban’s capacity to maintain their status quo in Afghanistan. Considering the above-mentioned factors inside Afghanistan, it is hard to imagine how intraregional economic projects would materialize under the Taliban rule, especially when the Taliban themselves prove to be incapable of fully controlling their own networks and providing security for the country. Since August 2021, different terrorist cells are present more than ever and are able to operate openly in Afghanistan and improve their military and financial resources. The success of economic activities is pre-conditioned upon security; therefore, it is imperative to countries to take this element into consideration in trade with Afghanistan under the Taliban rule.
Corruption- a challenge to trade with Afghanistan
Taliban are unable to follow through on their promises to cooperate with trade activities via Afghanistan due to corruption and their inability to hold their local leaders accountable to their own Sharia law. Widespread corruption at border crossings in the region and multiple checkpoints on Afghan highways where different Taliban powerholders extort money from cargo drivers are obstacles to increased regional trade. The opium trade played a significant role in the Taliban’s economy during their initial reign in Afghanistan. In addition to financial support from their sponsors, the Taliban raised revenue through drug trafficking, extortion, control of customs, criminal activities, and illicit mining. After the Taliban’s return, the Taliban criminalized poppy cultivation, however, in practice it does little to reduce the cultivation, supply, and transport of narcotics, while customs control, kidnapping of businessmen, and extortion still remain important financial sources for them. The humanitarian assistance to Afghanistan since the last year should be viewed as a test of accountability for them. The Taliban’s intervention in aid distribution, according to reports from the public, is one of the reasons why people are not receiving adequate aid despite the enormous inflow of humanitarian goods. Many people have complained about the Taliban’s unfair distribution of aid and misappropriation by taking trucks of aid for themselves or giving it to the families of Taliban militants who died or were injured while fighting for them. Trade activities with other countries would be new opportunities for corruption, and extraction. Rather than eliminating corruption as the Taliban had promised, they can misuse these opportunities. Hence, the problem of corruption remains, but the Taliban would stand to gain from it.
External Challenges to Trade with Afghanistan
Taliban’s major external problem at the moment is not trading but being recognized by the world and having access to Afghanistan’s foreign exchange reserves. The sustainability of the Taliban regime in the current environment depends on western recognition and the resumption of their financial support. Although regional connectivity and trade play an important role in reviving the country’s economy, access to foreign exchange reserves is important in resuming trade and other economic activities. The problem of recognition might not be resolved very soon as long as restrictions on girls’ education and women’s right to participate in the workforce exist. The negligence of basic rights for girls and women and generally of other ethnic groups in Afghanistan would lead to more dire economic consequences that would eventually pose far greater problems for the Taliban government in the long run.
Conclusion
Central Asia’s cooperation and investment in regional connectivity under the Taliban regime face an uncertain future. Central Asian countries must take into account that an illegitimate and unrecognized government in Afghanistan will not be able to cooperate effectively and efficiently. Under the Taliban regime, Afghanistan serves as a shelter for international terrorism. The Taliban government’s lack of a proper economic program and agenda in addressing the social problems in Afghanistan, its non-inclusive nature as well as its internal conflicts do not promise stability and security in Afghanistan contrary to what some policy analysts and governments believe. Central Asian countries should also take into account the costs of doing business and transit trade through Afghanistan under the Taliban regime. Corruption and time-consuming stops of cargo drivers at each checkpoint can be costly and discouraging to traders and drivers. The success of trade and cooperation between Central Asia and Afghanistan depends on the above-discussed factors and Central Asian countries should acknowledge the current internal realities that Afghanistan is faced with before making a deal with the Taliban.
