Afghanistan Reconnected Challenges and Opportunities in the Context of China’s Belt and Road Initiative Annie Cowan The first Central Asia cargo train departs from Nantong, east China’s Jiangsu Province for Afghanistan’s Hairatan, marking the start of freight train service between China and Afghanistan. After approximatly one year of operation, the service was discontinued due to trade obstacles” eastwest.ngo | t: @EWInstitute | f: EastWestInstitute Afghanistan Reconnected: Challenges and Opportunities in the Context of China’s Belt and Road Initiative The government of Afghanistan, as indicated by President Ghani, holds both infrastructure and investment as key points in its development agenda. China’s Belt and Road Initiative (BRI) presents an ideal opportunity for the government of Afghanistan to realize its historic potential in cooperation with China and other countries in the region. Executive Summary China-Afghan cooperation under the Academy of International Trade and auspices of China’s BRI represents Economic Cooperation (CAITEC). The government of Afghanistan, as a welcome and potentially-lucrative Following this and substantial indicated by President Ghani, holds opportunity for both parties. subsequent consultation with experts, both infrastructure and investment as However, geographic and physical businessmen and policymakers key points in its development agenda. connectivity alone cannot ensure from Afghanistan, its neighboring China’s Belt and Road Initiative (BRI) the success of proposed projects. countries, the EU, and the U.S., the presents an ideal opportunity for the Both countries must take into EastWest Institute has assembled government of Afghanistan to realize account the region’s political climate an overview of the challenges and its historic potential in cooperation to address deficiencies in soft and opportunities facing Afghanistan, with China and other countries in the hard infrastructure, as well as focus China and the wider region as they region. Repeated state-level visits, on enriching Afghanistan’s human pursue China’s BRI for a cooperative, summits, and agreements between capital to ensure the development of mutually-beneficial way forward. Afghan and Chinese representatives, a regional transportation hub in the These conclusions are accompanied including between Presidents Ashraf heart of Asia. by a series of recommendations Ghani and Xi Jinping throughout 2017 pertaining to the implementation of were an important indication of the Upon the conclusion of its five- BRI and other initiatives as well as to intention to work together towards year “Afghanistan Reconnected the adoption of a coherent regional this vital goal, yet practical realization Process,” the EastWest Institute economic vision in the face of political, of this partnership may be a complex held an international symposium in security and development challenges. task, as persistent security, political Beijing, China in cooperation with and logistical challenges must be the National Institute of Strategic faced to ensure the full incorporation Communication at Peking University of Afghanistan into BRI. (NISC), the Centre for China and Globalization (CCG) and the Chinese 2 www.eastwest.ngo Learn more at: www.eastwest.ngo/pillars/afghanistan-reconnected A family travel down the Hajigak pass, one of the two main routes from Kabul to Bamyan in Hazarajat. Introduction from China, Europe, the Middle East, and Central and South Asia. At the heart of China’s Belt and Road Historically, says H.E. Janan Mosazai, Initiative (BRI) is the concept that Ambassador of Afghanistan to China, greater connectivity leads to greater “Afghanistan connected markets growth. Inaugurated in 2014, BRI is and facilitated peaceful interaction China’s 900 billion USD campaign to across ethnic, regional, linguistic, and physically and economically link itself other lines.” Today, BRI presents an to diverse markets such as Central At the heart of opportunity for China and the region Asia, Southwest Asia, Europe and the China’s Belt and to help restore Afghanistan’s potential Middle East through maritime and to serve as the “beating heart of Asia” terrestrial transport corridors. It is, in Road Initiative (BRI) by fostering connectivity, security, essence, a resurrection of the old Silk is the concept that stability, and growth through an increase of foreign investment and a Road trade routes that once served greater connectivity as the heart of the greater Eurasian renewal of opportunity for the people economy. leads to greater and economy of Afghanistan. growth. Nowhere was more central to the Afghanistan wisely aims to seize Silk Road than the area that is now on the momentum provided by Afghanistan. Serving as a crossroads BRI and the development taking and vital marketplace, Afghanistan place around it to assume a in the ancient past represented a renewed position as a regional flourishing confluence of diverse hub of commerce and exchange. cultures, religions and economic Geographically, the country is ideally- opportunities for traders and travelers positioned to do this. Still, numerous www.eastwest.ngo 3 domestic, bilateral and regional Pakistan creates worries that tensions challenges—including instability between the neighbors will complicate and insecurity in Afghanistan, Afghanistan’s practical inclusion, insufficient transport and industrial with President Ghani in October 2017 infrastructure, prohibitive or expressing reluctance to link up with unwieldy regulations and policies, CPEC projects as long as Pakistan combative or exclusionary political prevents its access to India.2 Stalled and trade dynamics, and a lack of and cancelled negotiations—as well existing/enforced transit and trade as the de facto discontinuation of the agreements—must be overcome now-expired Afghanistan-Pakistan before Afghanistan can fully capitalize Transit Trade Agreement (APTTA), on the rich opportunities emerging which was supposed to ensure Afghan as a result of BRI and other regional access to India—represent a significant initiatives. impediment to regional connectivity. Existing bilateral and regional trade Challenges and transit agreements need to be improved, implemented and adhered to in order to allow fair access to The cornerstone of BRI is, of course, By beginning infrastructure development to all markets for all parties, for the encourage connectivity. For Afghanistan, domestic collective good of the entire region. this is a much-needed focus. The infrastructure country has been embroiled in conflict The Crisis of Implementation: A lack after conflict since the late 1970s, development with of implementation and enforcement causing infrastructure that would a focus on projects of existing trade and transit otherwise have been maintained and close to the border agreements is endemic throughout developed over time to have at best the region and represents a serious deteriorated or, in a great many worst with Pakistan, lack of the “soft infrastructure” cases, been destroyed outright. Afghanistan could necessary to ensure the success more directly of physical projects. Despite the Possible Complications with CPEC: The plethora of Memorandums of development of the China-Pakistan benefit from Understanding and other agreements Economic Corridor (CPEC) presents CPEC and more signed between Afghanistan and its an opportunity for Afghanistan to easily access the neighbors, including China, these link up to and directly benefit from agreements are frequently left infrastructure projects linking Pakistan Chinese market. unimplemented or unachievable due with China. By beginning domestic to practical and political impediments. infrastructure development with a Momentum gained by the signing focus on projects close to the border of agreements and MoUs must be with Pakistan, Afghanistan could acted upon efficiently throughout more directly benefit from CPEC and the region, with agreements and more easily access the Chinese market. policies being implemented, In December 2017, Chinese Foreign standardized, evenly enforced, and Minister Wang Yi announced China updated or expanded as necessary. and Pakistan’s openness to discussing Afghanistan’s potential inclusion in The realization of expressed political the corridor.1 However, the troubled will and commitment is critical to relationship between Afghanistan and ensuring the efficient and smooth transit of goods across the region 1 Ministry of Foreign Affairs of the People’s Republic of China (26 2 TOLOnews (25 October December 2017). Wang Yi: To Discuss 2017). Ghani Refuses To Join CPEC Extending CPEC to Afghanistan in a While Access To India Is Blocked. Proper Manner. Available at http://www. Available at https://www.tolonews. fmprc.gov.cn/mfa_eng/zxxx_662805/ com/afghanistan/ghani-refuses-join- t1522540.shtml cpec-while-access-india-blocked 4 www.eastwest.ngo and access to diverse and lucrative for Afghanistan, it is heavily reliant on international markets. Pakistan as a corridor and gatekeeper for transit. Political and economic Pakistani reluctance to allow the transit difficulties between Pakistan and of goods over land between Afghanistan Afghanistan lead the latter to seek and India drives both countries to alternative routes to access foreign pursue alternative routes bypassing markets, forgoing geographically Pakistan, such as Iran’s India-backed expedient routes through Pakistan to Chabahar port, which has recently develop new links through Iran and seen the sixth shipment of Indian Central Asia. To