Afghanistan

 by Jack Ryan

How Will COVID-19 Impact Efforts in Afghanistan?

It is often surmised that modern conflict is characterized by a steady decline in inter-state warfare and increased conflict perpetrated by illegal non-state actors. In the current context, assumptions about a post-COVID-19 world and conflict add to this discussion as it will present a range of unique challenges to the international community. More specifically, COVID-19 will prove to be another factor in the decline of inter-state warfare, but provide a unique opportunity for terror cells and other illegal sub-national organizations to extort at the same time.

Due to the vast economic measures directed to fight the virus domestically as well as funding to support individuals and businesses during mandated lockdown measures, states will have to reexamine their national budgets. Countries will struggle to maintain pre-COVID-19 military spending, especially as citizens’ concerns shift from international affairs to domestic issues.

One only needs to read Geoffrey Blainey’s The Causes of War to get a grasp of his accurate argument that optimism guides a nation’s decision to go to war. Nations have been more inclined to go to war when they are more optimistic of victory and all it takes is one actor’s pessimism to favor a peaceful outcome, even if it means acceptance of conditions that may be less than favorable. COVID-19 has reduced optimism in states around the world. For example, the United Kingdom’s furlough scheme is estimated to have cost the country £60 billion (approximately $76.1 billion USD) between March and July. As nations look to rebuild their coffers, military spending will inevitably fall and with it, public support for military activity abroad.

This leads to the question: what does this mean for Afghanistan and American military engagement in the country?

Firstly, the pandemic has resulted in reduced military activity. As noted in outside analysis, COVID-19 has “prompted the United States and its partners to pause wargaming exercises that are meant to reassure allies and bolster readiness to protect the health of its military members.”

Not only does the U.S. need to keep a close watch over its military spending, but it also needs to keep a closer watch over the health of its fighters. Sailors and soldiers in the field are among the most vulnerable because they are packed together. In addition, it has been noted that, “Ground campaigns in urban areas pose still greater dangers in pandemic times. Much recent ground combat has been in cities in poor countries with few or no public health resources, environments highly favorable to illness. Ground combat also usually produces prisoners, any of whom can be infected.”

Therefore, these factors will result in a growing trend of reluctance of countries to engage, especially those like the U.S. who have entered into conflicts under the banner of the responsibility to protect. This reluctance will also result from social pressures. It is easier for a state to promote counter-terrorism operations when its citizens believe they are directly at risk of becoming a victim of terror. On the other hand, expectations of governments shift when citizens are faced by other threats to their livelihood, such as a pandemic like COVID-19. Support for actions abroad will undoubtedly waver.

COVID-19 and the reaction from the international community will inevitably impact the Afghan government, which was characteristically fractious long before the pandemic. Afghanistan has long struggled with a subpar health care system and the pandemic has only reiterated these struggles. A 2015 study determined that, “For one in five people, a lack of access to health care had resulted in death among family members or close friends within the last year.” Further, the U.S. Embassy in Afghanistan reports, “Afghanistan has a total of 35,526 confirmed cases of COVID-19 (Coronavirus) and 1,185 deaths attributed to the disease (Ministry of Public Health).”

The increasing number of cases and evident lack of access to appropriate health care facilities presents an even bigger challenge to a government already stretched thin by the ongoing conflict with the Taliban. President Ashraf Ghani’s government continues to pursue medical relief and stimulus packages including the allocation of “$86 million and then $158 million in the second phase to provide food to people across the country.” However, the critics fear the program will become riddled with corruption, a disease of its own within Afghan leadership. A free bread distribution program set up earlier in the year was found to be compromised by corruption.

Whilst the Afghan government battles corruption, a pandemic and wavering international support, the Taliban continue to launch attacks and publicly blame the Afghan government for the delay in the intra-Afghan peace process. Whilst the ongoing pandemic provides challenges to governments across the world it also provides a unique opportunity for terror organizations to take advantage of these pessimistic and economically weakened states.

As the government diverts security to hospitals as the number of patients rise by the day, the Taliban has taken advantage of the situation launching a range of attacks across the country in an attempt to gain an advantage over the Afghan government before peace talks begin.

Another pressing issue is that of prisons where thousands of Taliban fighters (as well as those of other groups) are incarcerated. It is common knowledge that prison conditions are favorable to the spread of disease. This will present an even greater challenge to a government already stretched thin on the ground.

Thus, it is integral that whilst the U.S. faces domestic pressure, they remain focused on their longest war. The US will need to accept responsibility for the situation in Afghanistan and continue its facilitation of intra-Afghan talks. Though the U.S. and other stakeholders will face increased pressure to reduce military activity in Afghanistan, continued support for the Afghanistan government, especially in the run up to peace talks, is essential. This is extremely important as the Taliban strive to gain any increased bargaining power over a weakened Afghan government.

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 by Jack Ryan

The Emergence of Sara Khitta in the Context of the US Involvement in Afghanistan

The period following the United States-Taliban agreement has provided an opportunity for the U.S. to examine its Responsibility to Protect (R2P) ethos and its impact on affected states, specifically Afghanistan. Operations on the ground have changed over this time and so have counter-efforts by the Taliban. It can be noted that the continued conflict in Afghanistan has led to the creation of a group of Taliban fighters known as the Sara Khitta (The Red Group) — an elite force created for the purpose of fighting a powerful adversary through the use of modern tactics and special weaponry.

The U.S. has seen many victories and losses since it began its operations in Afghanistan 18 years (or more precisely 6861 days as of July 20, 2020) ago. However, the legacy of its military intervention must be examined as matters surrounding troop withdrawal and abilities of the Afghan national army continue to be discussed. This is pertinent as Sara Khitta was formed with the specific mission to disrupt the actions of U.S. and Afghan forces.

Aristophanes, a playwright of ancient Athens, once said: “The wise learn many things from their enemies.” Whilst this may be stating the obvious, it is what foreign forces teach their adversaries that should be of more concern to the U.S. After nearly 7000 days of active involvement in Afghanistan, one can only assume that military tactics have been learned and inevitably exploited.

While the U.S. has always held greater firepower, large groups of semi-trained Taliban fighters have been lost during operations. As Mujib Mashal states in his article for the New York Times: “At times, the (Taliban) casualty rates went so high — losing up to hundreds of fighters a week as the Americans carried out an airstrike campaign in which they dropped nearly 27,000 bombs since 2013.” Therefore, the establishment of Sara Khitta demonstrated the need of the Taliban to strengthen their skills and firepower in the wake of these losses.

Sara Khitta have provided two major advantages to the Taliban. Firstly, the use of advanced weaponry and new tactics have “supposedly lowered Taliban casualties while allowing the group to capture large swaths of territory in Helmand”. Secondly, the force provides advantages to the Taliban propaganda campaign plastered across social media and recruitment pages.

For instance, a photo appeared earlier this year showing Ammar Ibn Yasir, the trainer of the Taliban’s Red Group, who is also known as “the Mujahideen of Mujahideen.” Photos such as this as well as others showing the unit performing various aspects of military training form the backbone of a media campaign designed to show the Taliban as a fighting force capable of taking on everyone — including a world superpower.

In addition to showing the glamour and capability of the Taliban’s fighters, the Sara Khitta social media campaign has focused on professionalism. For instance, there are photos that show fighters training in the snow flaunting full tactical gear. However, the unit is not just a photo opportunity. As Commander Murad disclosed to Reuters, “The Taliban ‘Red Unit’ are said to be equipped with advanced weaponry, including night vision scopes, 82mm rockets, heavy machine guns and U.S.-made assault rifles.”

Another aspect of Sara Khitta that has contributed to their success is the secrecy surrounding their group. Reports such as those mentioned previously touch on their weaponry, attacks and social media presence, but the Taliban has kept many details of this unit hidden from their media outlets and went as far as to forbid members from talking to the press. The U.S. military claimed it killed the head of the Taliban’s Red Unit during a strike in Helmand on Dec. 1, 2017. However, this has not drastically slowed their social media campaign and the propaganda value that this unit provides for the Taliban.

As the U.S. and the Afghan government continue on their respective journeys to create peace in Afghanistan, it is important that the U.S. considers its military legacy in the country and uphold the same responsibility to protect as it paves the way for intra-Afghan talks. Whilst fighting the Taliban, the U.S. provided the group with opportunities for growth and development (including the establishment of Sara Khitta) thus it is integral that both the U.S. and Afghan governments can appropriately counter these developments. This is essential in the transition to peace.

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 by Arman Sidhu

Trade, Aid, and a Self-Reliant Afghan Economy

At first glance, a chart depicting Afghanistan’s annual Gross Domestic Product (GDP) figures since 2001 could be characterized as a series of peaks and valleys. Though the imagery may be fitting with the country’s landscape, probes into why Afghanistan’s year-to-year growth is erratic necessitates a deeper look into the country’s trade practices, as well as the management and deployment of foreign aid.

While incessant conflict with the Taliban certainly plays a formidable role in deterring investment, it is far from the only ailment afflicting Afghanistan’s path toward economic independence. As one example, foreign aid still accounts for nearly 77% of the government’s budget, and that includes an assumption of a best-case scenario involving collected revenues.

Furthermore, Afghanistan’s increased engagement in global trade has yet to materialize any substantial capital investment, which is necessary for industrializing the economy and building a sufficient manufacturing base. The country’s trade deficit has also widened considerably in the last decade by nearly 25%.

Such conditions suggest that even in the event of successful intra-Afghan talks, the country’s development agenda will still rely heavily on substantial foreign aid inflows, with the World Bank estimating between $6-8 billion USD will be needed annually over the next several years. In order to best facilitate the use of that aid, both donors and the government will need to be selective in projects that incorporate broader participation from Afghans and put the country on proper footing for self-reliance.

To achieve this, Afghanistan’s economic policy will have to focus on three key prerequisites. These include an emphasis on export-led growth, diversification of trade partners and investors, and improvements toward tax revenue mobilization.

Export-Led Growth

Export-led growth is a strategy that concentrates on boosting the export potential of domestic businesses that specialize in certain goods and services. Assuming a comparative advantage for developing these certain products exists, the revenues and profits earned from exports are then to be reinvested in the country to expand production capacity and nurture the development of supporting industries. This method of economic policy was principally responsible for the rapid expansion of East Asian economies and remains in favor today among emerging markets across Southeast Asia and Sub-Saharan Africa.

For Afghanistan, exports have historically been limited to agricultural products (mainly fruits) but given the country’s vast reserves in minerals and natural resources, the opportunity for industrialization will be contingent upon proper management of the extractive sectors. The benefits would include the absorption of labor from agriculture as well as a diffusive investment that would support infrastructure projects and generate demand for businesses and employment across the manufacturing and services sectors.

In the past, several donor-led initiatives focused on the establishment of “resource corridors” have been put forth but have been shelved as a result of insecurity and dampened foreign investor sentiment on the country’s prospects. Nevertheless, should intra-Afghan talks prove fruitful in resolving the insecurity, it would clear the most significant obstacle for the extractive industries.

Diversification of Trade Partners and Investors

Currently, Afghanistan ranks 173rd out of 190 countries on the World Bank’s Ease of Doing Business, an index that uses indicators including the time required for permits and licenses, access to credit, and the enforcement of contracts, among other criteria to gauge the business/investor climate. As a result, inflows of foreign direct investment (FDI) in the country remains scarce and concentrated among a handful of nations, most of them neighbors. Afghanistan’s export destinations are in a similar position, with India and Pakistan accounting for a combined 75% of all Afghan exports. Imports are more diversified in terms of sourcing, but the trade imbalance has been costly in the absence of any progress on an import substitution strategy.

While the debate on the harmful effects of a trade deficit remains unresolved, curbing Afghanistan’s import reliance could help it bolster homegrown industries. Agricultural products and textiles makeup a significant portion of Afghan imports, yet domestic potential already exists in these sectors. Hence, these sectors, if prioritized, could rank among one of the simpler transitions available to the country’s economy.

The textile industry is also a common and vital source of employment for female labor and allowing wider participation by females can pay dividends by providing additional economic security for households, a boost in consumption, and accelerated growth via a larger labor pool for the country.

Ensuring quality over quantity in FDI is commonly overlooked by recipient nations, particularly those endowed with natural resources. Oft-cited criticism of foreign investor practices include employing or awarding contracts to the investing nation, with little to no benefit for the domestic workforce or businesses. Stipulating stringent quotas for the contracting and employment of Afghan businesses and nationals is a crucial tool that can be leveraged when vetting potential foreign partners.

Given Afghanistan’s strategic (and volatile) location, diversifying the country’s trade partners and investors remains in its best interests for long-term growth. This directly ties in with a balanced foreign policy based on non-alignment. Given the competing interests of regional hegemons like Russia, China, India, and Pakistan, the ability for Afghanistan to deftly balance external relations without committing to a single side ensures sovereignty and self-reliance.

Mobilization of Tax Revenue

At present, the shortfall between the Afghan government’s annual budget and its revenues stands at roughly $8.5 billion USD, which is covered by foreign aid. A gradual paring of that figure will necessitate a more efficient collection and allocation of tax revenues. In tandem with taxes, Afghanistan’s role as a transit hub for pipelines and infrastructure that transports resources (like natural gas) is another opportunity to improve revenues.

In a scenario where peace is established, ensuring that the Taliban’s arbitrary tax regime is dismantled in favor of a government collection system will be vital to increasing government revenues. In addition, the ability to safely access and incorporate swathes of Afghan territory under the government’s jurisdiction will present new opportunities to improve the fiscal situation of the government and locals. However, the notion of a “peace dividend” will not be without costs. As exhibited by US troop withdrawals throughout the Obama Administration, any additional drawdowns could once again trigger economic consequences for businesses that engage with or rely upon foreign forces.

It remains pertinent that the government learns to wean itself off of foreign aid and prove to its donors it is capable and sophisticated enough to budget and allocate aid funds efficiently. Doing so would contribute positively to what will be a long, but viable, route toward genuine independence and lasting stability.

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 by Arman Sidhu

A Road to Everywhere: Afghanistan’s Role in the Belt and Road Initiative

Nearly seven years after it was first announced, China’s Belt and Road Initiative (BRI) continues to endure a barrage of setbacks that have called into question the feasibility of President Xi Jingping’s signature economic plan. Prior to the COVID-19 pandemic, criticism of the BRI included accusations of “debt trap diplomacy”, environmental concerns, and the lack of benefits for local populations in the form of no-bid contracts and job opportunities.

Furthermore, among the defining moments of the BRI’s short history was the fallout associated with Sri Lanka’s Hambantota port, a maritime port that was largely constructed and financed by China. At a cost of nearly $1.5 billion USD, the port struggled to generate the level of financial return needed to service the debt to China. With few options available, the Sri Lankan government was compelled to enter an agreement with a partially state-owned Chinese firm, which granted the company a 99-year lease on the port, essentially ceding Sri Lanka’s control and day-to-day management of the port.

The Hambantota debacle has increased the level of scrutiny paid toward other BRI projects, which span parts of Asia, Africa, Europe, and South America. Yet, for many developing nations, the BRI presents an intriguing opportunity to access the requisite financing to establish and upgrade infrastructure networks.

For a landlocked country like Afghanistan, overland infrastructure remains a core priority within the government’s economic agenda. Incessant conflict has eroded what was once Afghanistan’s natural advantage: its geographic location. By constructing transportation networks, such as roads, railways, airports, etc., Afghanistan would be well-positioned to benefit as a conduit for transporting physical goods and natural resources in a region that features some of the fastest growing economies in the world.

Thus far, attempts to include Afghanistan in the BRI have been frustrated by the vagaries of the country’s internal conflicts. The results of the peace talks between the Afghan government and the Taliban will provide investors, donors, and state entities with the necessary signals and guidance needed before launching additional economic programs in or near territories contested or controlled by the Taliban.

In particular, the Sino-Afghan Special Railway Transportation project is one of a handful of infrastructure initiatives that could bolster Afghan exports of minerals and agricultural products to China, via Central Asia. The ability to transport high-value input commodities, such as copper and rare-earth elements, safely and securely, is crucial to China’s decision-calculus when choosing where to invest in Afghanistan.

Supplementing the BRI is the “Made in China 2025” plan, which envisions Chinese production evolving toward advanced industries like semiconductors, which necessitate consistent access to a specific set of raw materials, many of which Afghanistan is heavily endowed with.

A favorable outcome in the peace talks with the Taliban could also extend Afghanistan’s BRI participation to its southernmost regions, where it shares a border with Pakistan. As one of the more active nations in the BRI, Pakistan has pinned its hopes of economic revitalization through the China Pakistan Economic Corridor (CPEC), a microcosm of the broader BRI strategy.

Valued between $50-$60 billion USD, CPEC’s portfolio of massive infrastructure projects includes power and transport projects, the establishment of special economic zones (SEZs), and Gwadar Port, the deepest seaport in the world. Extending Afghanistan’s connectivity with CPEC projects would be pivotal to expanding export destinations for Afghan goods. This in turn could create a productive business climate in Afghanistan, one that is conducive for job creation and economic diversification away from subsistence agriculture.

However, reversing Afghanistan’s status from a bottleneck to a transit hub will involve far more than the accession of policymakers in Kabul or Beijing. The looming question regarding the prospect of lasting peace is still the greatest hurdle in Afghanistan’s reconstruction plans. The Taliban’s tendency to intentionally target infrastructure or other foreign projects has given pause to plenty of investors in sectors like oil & gas, construction, and mining.

Even if peace can be attained, the track record for foreign investment in Afghanistan is littered with corruption, graft, and cronyism as a consequence of poor institutional capacity. In addition, other stakeholders and key Afghan partners such as the United States and India continue to view the BRI with suspicion, and the prospect of a trilateral partnership between Afghanistan, China, and Pakistan is likely to arouse concern.

Lastly, in the wake of the COVID-19 pandemic, the appetite for Chinese-led investment has hit a significant snag. Local attitudes toward the BRI have become polarized, and vocal opposition has risen as a consequence of China’s lending practices, which are often characterized as predatory, and its management of projects on the ground, which have gained a reputation elsewhere for environmental destruction, forced relocation of residents, and an unwillingness to engage local contractors and/or labor.

In an optimal set of circumstances, Afghanistan’s BRI projects could help restart growth and diffuse benefits to the local population. Yet, given the murky track records of both the BRI and Afghan investment at-large, the consequences of overpromising and underdelivering could enable greater unrest, without providing tangible benefits for the broader Afghan population.

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 by Rise to Peace

Unlocking Afghanistan’s Resource Wealth: Three Obstacles for the Mining Sector

Throughout its history, Afghanistan’s most notable advantage has been its geographically strategic location. The country’s proximity to trade routes and markets in the Middle East and throughout South, Central, and East Asia enabled an unparalleled level of connectivity in global commerce. However, decades of instability as a result of constant warfare, have disrupted many of Afghanistan’s naturally endowed advantages. Adding to this tragedy is the unfavorable timing of Afghanistan’s woes, which coincided with the era of globalization.

An alternative narrative of the country’s history in the past 40 years may have heavily favored Afghanistan as a transit hub for moving goods and fulfilling global energy demands between supply-rich states near Afghanistan’s north and eastern borders and booming emerging markets like India and China, both of which consume a considerable amount of commodities.

Yet, Afghanistan’s potential value to the global economy goes beyond just its geography. Among the sectors that could prove to be a catalyst for reconstructing the country’s economy is the nascent mining sector. The involvement of foreign actors in Afghanistan’s conflicts over the past 40 years, beginning with the Soviet Union in the late 1970s throughout the 1980s, began to unveil the extent of Afghanistan’s mineral wealth.

Through geological surveying, and cutting-edge methods such as remote sensing, the Soviets, and later, NATO member-states, have added clarity to the staggering level of wealth residing in Afghanistan’s mines. Valuation attempts have resulted in estimates that range from $1-$3 trillion USD in untapped mineral deposits. In addition to standard precious metals (gold, silver, platinum, etc.), Afghanistan also contains vast reserves of high-quality gemstones, rare earth elements (REEs), and minerals that are critical for industrial inputs, such as copper, iron, lithium, and uranium, among others.

While such commodities offer considerable advantages for economic development, the number of case studies that exhibit the downsides to resource wealth are plentiful, particularly in the developing world. Afghanistan is no exception to this phenomenon, which is most often referred to as the “resource curse”. To ensure proper and equitable development of Afghanistan’s mining sector, a number of obstacles, each of which present their own unique set of challenges, must be resolved to encourage domestic and foreign investment in this sector.

Obstacle #1: Securing Peace & Stability in Resource-Rich Regions.

The need for establishing rule of law and implementing peacebuilding measures is an intuitive requirement for any nation’s economic development, especially when recovering from long bouts of violence. With nearly 46% of Afghan territory in contention, or controlled directly, by the Taliban, ensuring safe passage within resource-rich provinces takes precedence among the sector’s prerequisites.

Although peace talks between the Afghan government and the Taliban remain fragile, the past two years has featured gradual progress between both parties. In relation to the mining industry, these talks will necessitate bargaining on both sides.

The Taliban is believed to generate nearly $300 million USD in revenues through illegal mining, serving as a lucrative revenue stream for the group. Additional grievances cited by legitimate mining firms include extortion and theft by militants and local warlords. For its part, the government will likely need to cede some level of control over the mining industry, whether that includes awarding formal rights to the group, and/or designing a mechanism for how mining proceeds will be used in Taliban strongholds.

Obstacle #2: Accountability & Transparency from Stakeholders

At present, the Afghan government loses hundreds of millions of dollars as a result of the status quo, which has dampened investor sentiment and discouraged local contractors from expanding mining operations. Assuming security assurances can be guaranteed, the next step would be to enact governance measures that bring much needed reform of existing mining laws and strengthen the oversight capacity of Afghanistan’s Ministry of Mines and Petroleum.

The tendency for corruption and graft to flourish within extractive industries is a recurring theme throughout resource-rich nations. To ensure adequate levels of oversight, the Afghan government will have to take further steps toward formalizing the sector. Doing so would ensure transparency during the auction and bidding process for mineral rights, providing a more leveled playing field for all participants, particularly local small and medium enterprises (SMEs). An emphasis on awarding tenders to SMEs would have the dual advantages of encouraging growth and competition, while minimizing the risks and liabilities associated with larger foreign mining firms.

In addition, greater accountability is required from the government with regard to how (and where) the proceeds from royalties and mining rights are funneled. One oft-cited solution toward this end includes providing an equity stake and royalties for local communities surrounding an active mine, which can be used toward developmental objectives in areas like infrastructure, education, and health.

Obstacle #3: Diversification and Avoiding the “Resource Curse”

In spite of its abundance of mineral wealth, the extractive industry is best understood as a catalyst toward nurturing growth throughout the Afghan economy. With over 70% of the population reliant on the fickle agricultural sector, job growth in mining is but one avenue for absorbing labor from rural communities. As exhibited by countries like South Africa, Nigeria, Angola, and the Democratic Republic of Congo, an overreliance on natural resources poses daunting challenges that subject such countries to the whims of the erratic global commodities market.

Thus, revenue generated from mining activity would be best allocated toward upgrading infrastructure and improving the provision of public services. In tandem, these efforts could jumpstart activity in the manufacturing and services sectors, fomenting the conditions for private sector-led growth while expanding government services in rural areas adjacent to the mines.

Resolving these concerns is critical for Afghanistan to harness their bountiful mineral wealth. While rare, successful case studies of resource-rich nations do exist, and an emphasis on transparency, fiscal prudence, and sound economic policy remain the critical components of successful natural resource management.

– Arman Sidhu

 

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