Editor in Chief: Moh. Reza Huwaida Wednesday, February 19th, 2020

Afghanistan: The Challenges and Opportunities to Regional Connectivity

Afghanistan has a unique geographic location which borders with six countries and also has river ports. Very few countries of the world have this kind of strategic location and vas potential opportunity. From this point of view, Afghanistan has tremendous prospective to develop its economy, but there has never been a comprehensive policy for utilizing this geographical uniqueness of the country. However, the national unity government (NUG) has played an important role in opening several new aerial and ground transit routes.  The NUG has always emphasized that Afghanistan’s economy could be transformed and economic growth achieved, if the country can utilize this advantage and turn itself into a regional hub for trade and transit. To materialize that ambition, Afghanistan needs extensive infrastructure development internally and connectivity externally. To that end, Afghanistan has tapped into various  regional connectivity projects such as China’s Belt and Road Initiative (BRI) and Russia, India, and Iran’s International North-South Transport Corridor (INSTC) that have come onto the scene in recent years.
Afghan and Chinese policymakers see Afghanistan’s location as its greatest advantage under the BRI, mainly because it facilitates the movement of goods, data, and energy. Studies reveal that although the BRI initially bypassed Afghanistan, Chinese officials announced concrete steps to integrate Afghanistan in 2017, a year after signing of a joint MOU. As it stands, China is linked to northern Afghanistan through the commencement of the Sino-Afghanistan Special Railway Transportation Project and the Five Nations Railway Project. China also wants to link itself to southern Afghanistan through the China-Pakistan Economic Corridor (CPEC) but this has been received with hesitation by Afghanistan as it is in the middle of a dispute between Pakistan and India over CPEC traversing through disputed territory. China and Afghanistan have already initiated a fiber optic link through the Wakhan corridor and are looking to link the BRI to various energy projects and extractive sectors.
Another major regional connectivity project is the nascent International North-South Transport Corridor (INSTC) being advanced by Russia, Iran, and India to link the Indian Ocean to Europe. Afghanistan has linked itself with INSTC through Chabahar port and the Lapis Lazuli Corridor. The chabahar port considered as a strategic alternative to Pakistan’s Karachi port on which Afghanistan has thus far been heavily dependent. In addition, Afghanistan succeeded to send its merchandise to Europe via the Lapis Lazuli Corridor in mid-December 2018. With both Chabahar port and the Lapis Lazuli Corridor now in operation, the INSTC could further opportunities for Afghanistan to access the Indian Ocean and Europe.
In spite of these opportunities and gains, we identify several challenges, as outlined in some of the studies that stand in Afghanistan’s way to becoming self-reliant through regional economic connectivity projects. Foremost, these studies show that as long as Afghanistan remains in a state of ongoing conflict and political instability, it will not be able to strengthen its position in the region to materialize its regional connectivity ambitions. Countries need to feel that Afghanistan is a safe trade and transit hub and that they can realize a return on their investments. Moreover, the infrastructure deficit remains a major hurdle and major reforms are needed in the financial and banking institutions — such as safe and competent standardized transactions– to make the environment investor friendly. These challenges, according to policymakers in Afghanistan, restrict the country’s role in regional and international economic initiatives to that of a “policy taker” rather than an “initiator.” This position weakens Afghanistan’s bargaining position as its interests in these policies always remain secondary to others.
Another problem is the economic growth in Afghanistan’s domestic economy and export sector. Afghanistan’s economy remains largely a consuming one; thus, if the country links itself too hastily to regional projects, it compromises the growth of its local economy as it will face competition from stronger economies, such as China, Iran, India, and Pakistan, that its domestic industry currently cannot match.
Moreover, the Disagreements between India and Pakistan have also prevented Afghanistan from planning steps to link itself to CPEC. Sanctions by the United States on Iran in 2015 have also left a negative impact on Afghanistan’s economy. Although partially relieved by a U.S. exemption on Chabahar port in November 2018, the sanctions continue to affect remittances, imports, and the illegal movement of U.S. currency from Afghanistan to Iran. 
In general, Afghanistan has made much progress during the NUG but what we lacked was a comprehensive proactive policy about the unique location of the country. Therefore, we need to underpin several points; first, we need to develop our own policies and domestic capacities to entice others to connect with its initiatives rather than always connecting to initiatives of others in the region. This is a crucial point, because given the security an economic situation, there is less motive and interest for other countries to make an overture toward Afghanistan. Second, Afghanistan alone cannot address the obstacles to realizing its full potentials as a regional hub and needs a regional approach to turn these weaknesses into core competencies. This regional approach may include regional cooperation, regional integration, and attraction of investment in Afghanistan’s infrastructure that will turn it into a regional hub for trade and transit. Third, the Afghan government should avoid adopting any hostile economic policies with some countries while promoting favorable ones with others. It is advisable that the Afghan government avoid intermingling economy and politics.