Pakistan and Afghanistan are neighbouring Muslim-majority countries, connecting South Asia with Central Asia. Pakistan has more than 200 million people, while Afghanistan has around 40 million. Despite sharing much in common, including culture and landscape, they have had a tortuous history of outright cross-border hatred, especially after the 1947 British withdrawal from South Asia. Refugees, cross-border infiltration, militant groups, territorial disputes, counterterrorism policy, and dialogue with terrorist networks were a few of the variables that reshaped the foreign policies towards each other. Unfortunately, they have not taken advantage of their geographical positions connecting Central Asia, a region full of natural resources, with South Asia, the most populous area in the world. With increased cooperation between Afghanistan and Pakistan, all of South and Central Asia could see an era of economic boom.
Conflicts and Destruction: Afghanistan has been under the flames of conflict for the last four decades, which has deeply affected Pakistan’s peace and stability. This era started with the invasion by the USSR into Afghanistan in the 1980s. The end of that war led to the Mujahideen’s control of the entire country, which was then superseded by the Taliban government. After 9/11, the United States invaded Afghanistan and overthrew the Taliban, which began another wave of confrontation that continues until today. For the past 19 years, United States forces have been stationed there while gaining no tangible benefits.
It is essential to understand the dynamics of conflict and its attached human costs in the last four decades in Afghanistan and how it affected the economy and stability in Pakistan. One can look at this period as phases of conflict: 1st phase, the Soviet Invasion, 1978-1989; 2nd phase, the Peshawar accord and the struggle for power, 1992-1994; 3rd phase, the rise of Taliban, 1994-2001; and 4th phase, the post 9/11 incidents, 2001-todate.
Many universities and think tanks have done remarkable work on identifying the human and non-human costs inflicted by the foreign induced civil wars and conflicts on Afghan society. According to the Tufts University publication: Afghanistan: Soviet Invasion and Civil War, there were 1-1.5 million (9% of Afghanistan’s total population) who died during the Phase 1 conflict. In the 2nd phase, after the Russian withdrawal, there were around 10,000 casualties during the Mujahideen factional fighting.
The 4th phase of the conflict was more prolonged but less disastrous in terms of human lives. A November 2018 report published by the Brown University project “Cost of War” titled Human Cost of the Post 9/11 Wars: Lethality and the Need for Transparency, highlighted direct deaths in major war zones including Pakistan, Afghanistan, and Iraq after the United States-initiated War on Terror (WoT) against the perpetrators of the 9/11 attacks. Around 3000 people were killed in those attacks, and the WoT has cost the above countries almost half a million dead, and the figure is still rising. From October 2001 to October 2018, there were 147,000 killed in Afghanistan alone. Similarly, 65,000 died in Pakistan when the war shifted from Afghanistan to Pakistan. According to the same report, there were around 300,000 people killed in Iraq from March 2003 to October 2018 during the U.S. military operations.
Border issues and the infamous Durand Line: Pakistan and Afghanistan share a 2200-kilometer long border that was established on November 12, 1893, by Afghanistan and the British governments. Amir Abdurahman represented the Afghans, and Sir Mortimer Durand represented the British. The border, known thereafter as the Durand Line, was drawn to limit the sphere of influence between the British Empire and the State of Afghanistan. It consisted of a single-page and was signed on November 12, 1893. The revised version of the treaty is known as the Anglo-Afghan Treaty of 1919, which was inherited by the newly formed Pakistan in 1947. The Pak-Afghan border is the world’s most dangerous border. It has always been a point of tension between Pakistan and Afghanistan because the latter never officially recognized it. As recently as 2017, Afghan President Hamid Karzai said that Afghanistan “will never recognize the Durand Line as the international border between the two countries.”
There are two major crossing points between Pakistan and Afghanistan, Torkham in Khyber Pakhtunkhwa and Chaman in Balochistan. Both are primarily used for people-to-people contact and trade. In the past, these points were closed several times unilaterally by Pakistan, resulting in severe economic and humanitarian crises on both sides. For example, on February 16, 2017, Pakistani authorities closed the border following a bomb blast in Sindh province. It was closed for several weeks and reopened for two days on March 28, allowing stranded people and goods to go across. Another incident occurred two months later when a census team from the Pakistan Population department was working close to the Durand Line when the Afghan security forces opened fire and caused many casualties. The border was then closed again for three weeks. The primary purpose of this closure from the Pakistani side was to force the Afghan government to act against militants that were continuously infiltrating through the porous border. Another purpose was to construct a fence by trying to force the Afghan government to accept the Durand Line as a permanent boundary line. As of January 2019, construction on the 900 KM fence had been completed.
Border-related strife between Pakistan and Afghanistan deeply affected their economic cooperation. According to reports, Afghanistan shifted more than 70% of its trade to Iran, India, and China, which resulted in a 50% decrease in Pakistan’s share of the Afghanistan market over the last two years. This shift was the primary reason which decreased the Pak-Afghan trade volume from $2.5 billion in 2015 to $1.7 billion in 2017. Similarly, Pakistan exports to Afghanistan dropped from $2.4 billion in 2010-11 to $1.3 billion in 2018-19. This significant decline in Pakistan’s exports speaks volumes about Pakistan’s failed foreign policy toward Afghanistan. An opportunity to capture the Afghanistan market for goods is slipping away. It could have provided ample support to the already declining economy of Pakistan.
A glimpse of Afghanistan’s recent economic development: Afghanistan’s economic status is gradually improving with time after comparing the data of the past few years. It is also a sign of the country becoming relatively more peaceful and stable. In 2018, Afghanistan’s GDP was $19.36 billion. Back in 2013, a GDP of $20.56 billion was the historic highpoint. According to the estimates, the GDP will hit a high of $23 billion in 2020.
Afghanistan’s GDP growth declined from 2.7% to 1.0% from 2017 to 2018 due to heightened political tensions, election violence, and reduced wheat production triggered by severe drought. All these factors deeply affected business confidence, too. However, despite these negative economic indicators, inflation for the year 2018 stayed moderate at 0.6%.
On the trade side, imports were higher than exports in 2018, with a trade deficit equal to 39.9% of the GDP. On the fiscal management side, a budgetary surplus stood at around 0.7% of GDP due to improved tax administration. On the private side, credit to the private sector declined by 4%, which was partially attributed to the weak banking system.
The population demographics figures of Afghanistan have a deep connection with the economic development and the likelihood of insurgency in the country. According to the World Bank’s report on the employment status of Afghanistan, 25% of the total labor force is unemployed, as is 25% of people between ages 15 and 30. This means eight million people are trying to enter the labor market but without the required skills and education. People of these ages are easy prey for recruitment for the insurgent organizations. These indicators can tell how likely it is for the youth to join insurgent groups as an alternative to employment.
The year 2019 is expected to bring some positive news for the Afghanistan people and other stakeholders. The potential peace agreement between the Afghan government and the Taliban will affect international security issues and demolish some political uncertainties. Although the Trump administration stopped negotiations with the Taliban, Pakistan opted for consistent diplomacy with them.
Bilateral trade and transit agreements: Afghanistan is a landlocked region that relies on other countries for business since it has no direct access to seaports. According to some studies, landlocked countries across the world incur 50% higher costs than coastal states. A landlocked country will have 30% less trade and have 1.5% less growth than a maritime nation. So, under international laws, landlocked countries can have transit agreements with the neighboring countries having seaports to ease and facilitate trade for their survival.
Thus, Pakistan, with its multiple ports on the Arabian Sea, is vital partner. Pakistan and Afghanistan cooperation has three dimensions: transit trade, bilateral trade, and illegal trade (informal, smuggling). Transit and bilateral trade have been the center of focus between them.
Pakistan and Afghanistan signed their first transit trade agreement, the Afghanistan Transit Trade Agreement (ATTA), in 1965. In 2010, it was redesigned into the Afghanistan Pakistan Transit Trade Agreement (APTTA). In 2012, amendments were added for both Afghan trucks to reach the Wagah crossing point between Pakistan and India and for Pakistani trucks to reach Tajikistan for trade. These revisions are attempting to extend and facilitate the influence of trade routes from India to Central Asia. If it works, it will serve as a trade route or “land bridge” between South Asia, Central Asia, the Middle East, and Eurasia.
After the Taliban government fell in 2001, the international community had initiated reconstruction and rehabilitation activities in Afghanistan, including India. The revised transit trade agreement in 2010 included specific revisions for India, which created security issues for Pakistan. As a result, Pakistan and Afghanistan trade relations have declined to a historical low because of a trust deficit that emerged due to increased Indian influence in Afghanistan.
Afghanistan is a nascent market, and neighboring countries have excellent opportunities to capture the Afghan market with their export goods. There are enormous prospects for Pakistani products in Afghanistan; thus, Pakistan needs to enhance good bilateral trade relations.
In 2016, Pakistan had been Afghanistan’s second-largest import partner and largest export partner. Afghanistan’s exports to Pakistan include grapes, cotton products, apples, and steel. From Pakistan, it imports wheat flour, Portland cement, sugar products, broken rice, and oil products.
India is filling the trade gap left by Pakistan. India is trying to occupy the Afghan market for both economic and strategic motives. India and Afghanistan made many agreements to enhance trade cooperation with each other. They set a goal to push the total annual trade to $2 billion from the current $900 million. In 2017, they also opened two air cargo routes for the trade purpose of connecting New Delhi and Mumbai with Kabul. Since then, more than 100 flights have been conducted. Afghanistan needs India’s help in optical cable, pharmaceuticals, manufacturing, agriculture, craft products, minerals, and for the power sector.
Smuggling is a form of illegal trade whose transaction is not recorded in the revenue collection accounts. It is an import-substituting economic activity and a transborder menace, like terrorism, which the countries are equally fighting. Smuggling is a burden on both countries, but it can send many signals to the center of the government and the revenue collection departments about the demands for goods across the border. In the case of Pakistan and Afghanistan, there has been a rise of this informal trade – mostly smuggled from Afghanistan into Pakistan – of up to $4 billion per year, thus showing demand for those goods across the border. If this trade is formalized through trade agreements and proper border mechanisms, it could yield multi-dimensional results other than just a source of revenue generation for the governments. Establishing a proper border control mechanism can be a source of employment for unemployed people, especially in Afghanistan.
Pakistan-Afghanistan bilateral treaties are affected by the inclusion of India in the Pak-Afghan transit agreements. Now, India has reservations that Pakistan is not permitting Afghanistan exports to India. Conversely, many Afghan officials want an import of the same goods from both India and Pakistan. This tripartite cooperation between Pakistan, Afghanistan, and India could bring Pakistan between $6-8 billion in revenue in annual royalties. For this to succeed, trust-building, and collaboration from all three countries must be built. For example, Afghanistan can play a role in convincing Pakistan that it isn’t allowing India to use its land for malign activities against Pakistan. Similarly, Pakistan should stay away from meddling in the internal affairs of Afghanistan, leaving it alone to independently decide its policies. Also, Pakistan should facilitate the Taliban talks with the Afghan government but should not try to influence them.
Previously, Afghanistan was the only country with which Pakistan had a trade surplus. Later, their inter-state trade was politicized and thus constricted. Now, Pakistan-Afghanistan’s trade potential is around $10 billion, while the actual trade stood at $1.7 billion, which means they are making 83% less trade than their potential level.
In June this year, officials from both countries resumed talks on APTTA on Afghanistan’s demand to include India. But, challenges lie ahead as Pakistan faces diplomatic issues with India over the status of the disputed Kashmir region.
Pakistan’s role in the Afghan peace talks: The United States and Taliban were closed to finalizing a peace agreement to end the almost 19-year long war in Afghanistan. This past September, President Trump suspended talks for a while. But there is no alternative, and these talks need to be resumed sooner. Central issues of the dialogues were to ensure a power-sharing agreement and a permanent cease-fire between the Taliban and Afghan government. Pakistan is keen on these talks and had invited the Taliban representatives to Islamabad. Pakistan is involved in minimizing the trust deficit with the Afghan government and its people. There are two causes for this trust deficit between Pakistan and Afghanistan: Pakistan’s support of the anti-Afghan government’s Taliban and Pakistan’s rejection of the Afghan government’s demand to grant land access to the Indian market for trade.
There are many stakeholders in the Afghan peace talks other than the Afghan government and the Taliban. The United States and Pakistan are also trying to play its role in these peace talks because they both have stakes in Afghanistan. The United States wants a peaceful withdrawal and wants to make sure a peaceful transition is made between the Afghan government and the Taliban. During this process, the United States wants to leave a stable system under which Afghan soil is not used against its interests in the future.
Pakistan also has an essential role in these talks. Pakistan has two choices: to support the Afghan government, or to support the Taliban. Both options have their strategic applications for Pakistan. Supporting the Afghan government will be a steppingstone toward internal peace and stability in Afghanistan and will make it more independent. But with this support, Pakistan’s influence will be minimized in Afghanistan. If Pakistan goes for supporting the Taliban factions, it will fulfill many of Pakistan’s strategic objectives in Afghanistan. But it will be dangerous for the region as we have already gone through this experiment in the decade of 80s and 90s, after which the same factions became a cause of instability in Pakistan’s northwestern Pashtun tribal belt. Pakistan needs to choose an option that paves the way for a stable Afghanistan, and ultimately a stable northwestern part of Pakistan.
The past four decades tells a story of the Pashtuns living a miserable life both sides across the border in Pakistan and Afghanistan. This could be attributed to the reason Mujahideens were first trained in training camps in Pashtun majority areas, and then they were used as proxies in these wars. Since Pashtuns are in the majority in Afghanistan, and most Taliban are also Pashtuns, it is more likely that their areas in Afghanistan will be a hotbed as long as the conflict continues in Afghanistan. And in that case, there will be no peace in Pashtun regions across the border in Pakistan. The activists of the current Pashtun nationalist movements in Pakistan demand the government to stop support for any Taliban both in Pakistan in Afghanistan.
The writer was born and raised in the Pashtun tribal belt of Pakistan – just a few kilometers away from the Pak-Afghan border – and has seen nothing but destruction in his area in the past three decades, which the rest of the Pakistanis had never imagined.
Conclusion: Pakistan and Afghanistan have many things in common, which should be a cause for peace and prosperity. However, both countries are facing political, strategic, and economic constraints preventing them from cashing in on their common points.
Pakistan should do its best to enhance and facilitate all kinds of ties with Afghanistan for both economic and strategic motives. Pakistan’s breaking of trade ties with Afghanistan is giving other nations the opportunity to have influence in Afghanistan, which again is unsafe for Pakistan.
Pakistan and Afghanistan should cooperate on issues that address their mutual concerns. Pakistan should support and facilitate the peace talks in Afghanistan and should participate in a way not favoring any of the parties in these talks between the Taliban and the Afghan government. Similarly, Afghanistan should not let India use its land for malign activities against Pakistan.
Once Pakistan and Afghanistan have established relations on mutual trust and cooperation, they can quickly figure out inconsistencies in APTTA and can make it workable for everyone with new amendments. And with APTTA’s resumption, another trade corridor – from India to Central Asia – can be established.
The border dispute related to the acceptability of the Durand Line between Pakistan and Afghanistan is a serious issue, and both countries need to follow the guidance of international laws in this regard.
Pakistan and Afghanistan must take all steps essential for sustainable peace and stability in the region. Because history shows that this volatile region had been a starting point of wars, but this time it can be a starting point of peace in the entire region.