(for THE ASIA SOCIETY)
S.Frederick Starr
Chairman
Central Asia-Caucasus Institute
Nitze School of Advanced International Studies
Johns Hopkins University
Tel: USA 202 663 7720
Between October, 2001, and February,
2002, estimates of the cost of
reconstructing Afghanistan grew six fold, finally topping out at $30
billion. Add to this the bill for
massive infusions into the economy of Pakistan. Include also
the
most essential aid to Afghanistan’s immediate neighbors to the North. The grand total for the region is
staggering, surely no less than $50 billion.
Judging by the actions of donor countries and institutions at the Tokyo
meeting in January, however, nothing remotely approaching this amount will be
forthcoming.
Why is the sum so large? Because Afghanistan itself lies in ruins and
neighboring countries have suffered gravely from a generation of warfare on
their border. But there is a further
reason. For the international
development assistance field, the 1990s were a golden age. National and international agencies, as well
as private foundations, poured unprecedented amounts into projects of every
description. Thousands of
professionally staffed NGOs sprang up, each seeking to do well by doing
good. The many sophisticated new
approaches to development demanded an arcane new vocabulary, mastery of which
separated insiders from outsiders like a password among Freemasons.
This burgeoning and
entrepreneurial development community
has responded to the crisis in Afghanistan the way Tiffany’s might react to the
discovery of oil in Japan. It has put forward the full complement of its “best
practices” with little regard for the total cost. On the assumption that all
initiatives are equally valuable, it has bundled them into a kind of Marshall
Plan.
Many of the specific proposals for
renewing infrastructure and rebuilding schools and medical services have real
value. Those designed to foster
village-level agriculture in the most impoverished mountain areas of
Afghanistan and neighboring countries are especially meritorious. After all, the worst poverty, the deepest
alienation, the fertile ground for narcotics trafficking. and the most violent
conflicts are all to be found in the remote mountains of this region. Until farmers there can return to their land
and feed their families there will be no peace.
Acknowledging both the excesses and
the insights of the development professionals, the fact remains that they have
largely ignored the one measure that is most likely to alleviate poverty in
Afghanistan: the reopening of regional transportation and trade. And not just in Afghanistan. The opening of long-sealed transport
corridors will unleash a tremendous infusion of trade and investment that will
immediately benefit the whole of Central Asia, as well as Pakistan and eastern
Iran. And unlike the more grandiose
development projects being put forward, this one can be achieved at relatively
little cost. The reason is simple: a
program to expand regional trade will be depend for its success not on NGOs and
agencies with little or no prior experience in the region, but on market mechanisms whose efficacy in all the
countries involved has been proven for over two millennia.
The modern age is ill-equipped to recognize the
economic potential of the trade routes centering
on Afghanistan and embracing what might be called the “broader Central
Asia.” Most available maps show the
region as being on the edge of something else rather than an economic and
cultural zone in its own right. This
broader Central Asia might appear on the far right side of a map of the Middle
East, the left side of a map of South Asia, or the bottom of a map of the
“former Soviet Union.” In spite of its
name, it is rarely depicted a being central to anything.
Alexander of Macedon shared this
misperception. When he invaded
Afghanistan he believed, thanks to inaccurate briefings from his consultant,
Aristotle, that he was literally at the end of the earth, with only the World
Sea beyond. He soon realized that he
had instead arrived at the navel or omphalos of a vast network of
transportation and trade that connected the Middle East with India and China,
West with East, North with South.
Before long, silk for Roman togas was passing this way, as were precious
metals from the Mediterranean, as well as swift horses and even musicians, all
bound for the East. Which is why Marco
Polo later passed through Afghanistan en route to China. Afghanistan was also the knot of South-North
interaction. Buddhism reached China
from India by passing first through Afghanistan and Central Asia. Mughals and other invaders of India all
passed this way as well.
The vast trading zone centering on
Afghanistan went into eclipse after 1500.
Political instability and the rise of sailing ships turned the region
into a backwater. Russian and British
imperialists further weakened the basis of trade by treating the area as a
buffer zone. The final blow fell when
Stalin cut the region in half and created on the USSR’s southern flank the
longest and most closed border on earth.
Khomeini’s revolution in Iran, the Red Army’s invasion of Afghanistan,
and the gradual decay of Pakistan’s economy destroyed what little trade still
lingered on.
If the fall of the Taliban and
re-establishment of stable government in Afghanistan lead to a reopening of the
great trade routes of Central Asia, these events will mark the most fundamental
change in the region’s fate in the past half-millennium. Overland trade will again flow from India clear
to Iran and the Middle East, as well as to Europe. China and India will be able to trade with ease, as will the new
states of Central Asia and the entire Indian sub-continent.
Chinese
trade with the Middle East will also be facilitated. Remote regions of Siberia will have access to the southern port
of Karachi, and Russian-Pakistani and Russian-Indian commerce can flourish as
never before.
How, though, might this occur? To unleash these heady possibilities, four prerequisites must be put in place:
Truckers
must be able to get their rigs from one place to another without constant fear
of hijacking. Three types of potential
hijackers must all be constrained.
First, existing warlords and local criminal groups have already found it
expedient to hijack some of the few trucks venturing across Afghanistan’s
roads, stealing their content and holding drivers for ransom. Second, new professional mafias will quickly
arise and begin to function on a regional basis. The fact that these already exist along some of the highways of
Pakistan and Indian Rajastan, as well as in former Soviet Central Asia, makes
it all the more likely that they will seize the opportunity to extend their
reach as soon as it is possible to do so.
Third, underpaid and unsupervised government officials, as well as rogue
military units, can all too easily become part of the problem.
Truckers everywhere know that there is
safety in numbers, and that real security will come only when traffic greatly
expands. To reach that state, it will
be important to increase the likelihood that attacks will be reported and that
road security become a regional rather than a purely national issue. This can be achieved through the
establishment of well-paid and coordinated patrols along the highways, the
opening of regional consulates, and by coordinating all reporting and action
through some kind of bilateral or multi-national entities.
It
is worth noting that Turkmenistan maintained what were in effect two consulates
in Afghanistan throughout the Taliban years and Uzbekistan has already opened a
consulate in Mazar-e-Sharif to handle trade issues as they arise.
The third prerequisite is to establish
effective and uncorrupt national agencies to collect tariffs and imposts at
border crossings. This is far more
difficult than it may seem. When the
Islamist forces of the United Tajik Opposition joined the government at the end
of the Tajik civil war, one of their few demands was for control over the
Customs Ministry. They rightly saw this
as a means of enriching themselves, not only by siphoning off fees to their own
pockets, but also by extorting payments from shippers and by taking bribes from
drug traffickers. Soon the Ministry’s
parking lot in Dushanbe was filled with expensive imported automobiles.
One of the areas in which foreign
assistance would be most useful is in the creation or upgrading of customs
agencies throughout the region. Since
customs duties are likely to be one of the single largest sources of income for
the poorer governments in the region, the stakes are high. Only with international help is it likely
that the various states, and particularly Afghanistan, will be able to manage
the necessary incentives and threats of punishment in such a way as to produce
effective customs collection.
Even the existence of professionally
staffed customs agencies in the participating countries will not assure the
easy flow of trade throughout the region.
Unless the states involved are willing to extend preferential transit
fees for regional transport and to coordinate those fees with one another, the
new transport web will prove stillborn.
Uzbekistan recognized this when its cabinet of ministers recently voted
to establish favorable rates for commercial cargo being shipped to and from
neighboring countries. But the
resulting rates are still high and will remain so until all the countries come
to realize that the only way they can maximize income is by lowering levies and
increasing volume.
This realization will not come easily,
nor will it come unilaterally, since each country will view low rates on its
border as a gift to its neighbor’s treasury.
Some
kind of international consultative body will be called for, a regional agency
where information on customs policies can be exchanged and, over time,
coordinated. It is possible that this
could be accomplished through one of the existing entities, whether the newly
refashioned Central Asian Cooperation Organization, the Shanghai Six, or even
the long moribund Economic Cooperation Organization (ECO). However, a new inter-ministerial entity
would probably be more effective, and could be established with support and
assistance from international donors.
These, then, are the prerequisites for
reopening regional trade in Central Asia.
While they are not simple, it is worth noting what is not included
on this list. What about the road
surfaces themselves? These are
certainly important and at some point must be rebuilt. But the broader Central Asia already boasts
tens of thousands of hardy truckers who are accustomed to getting their rigs
over the most gruesome terrain provided the main bridges and tunnels are open.
Under
the circumstances, it would be a waste of time and money for international
donors to create a system of Afghan or Central Asian Autobahns when so
much less is required to get the traffic moving.
Nor need donors concern themselves
with any of the infrastructure besides bridges and tunnels. Gas stations, repair facilities, and all
other necessary services will arise on their own, as has already occurred
wherever traffic has expanded. The
roads west from Herat into Iran, from Quetta in Pakistan to Kandahar, from
Dushanbe east to Badakhshan, or the entire Khyber Pass may all be extremely primitive
but they do not lack in essential services, thanks to private
entrepreneurs.
The opening of key roads will revive
trade and expand security. Equally
important, it will create conditions under which other forms of international
transport and commerce will become attractive.
The first to follow will be railroads, which in most cases parallel
highways. Although it will still need
large investments, a basic railroad network is already in place and can be
revived and expanded once general conditions improve.
Hard on the heels of railroads will be the
structures necessary for the transport of energy throughout the region. Even during the period of Taliban rule in
Afghanistan the government of China was exploring the possibility of reviving
the old Unocal-Bridas project to construct a gas pipeline from Turkmenistan to
Multan in Pakistan and, potentially, on to India. Now several groups are considering how to revive that project and
even to expand it to include an oil pipeline.
If this happens it will lay to rest fanciful Indian schemes for building
an underwater pipeline from Iran to Gujarat or a mountain pipeline from
Turkmenistan clear across Tajikistan and into India via Xinjiang.
Still another important item of future
regional commerce is hydroelectric energy.
Uzbekistan has already revived the sale of electricity from gas-driven
plants to northern Afghanistan, along with gas and heating oil. The hydroelectric potential of Tajikistan
and Kyrgyzstan ranks close to the top worldwide. Its development awaited secure access to markets, especially
those in Afghanistan and Pakistan.
Since these upland countries lack gas and oil, their ability to sell
hydroelectric power may be the key to their ability to purchase urgently needed
hydrocarbon fuels. This field should
become an important magnet for long-term international investments.
Energy is not the only sector likely
to attract outside investment.
Prominent Indian manufacturers touring Kazakstan and Uzbekistan in 1997
stated that they would move immediately to develop activities in former Soviet
Central Asia “as soon as we can get trucks up there from Bombay.” Now this prospect is coming into view. It is inconceivable that Indian and
Pakistani investors will not find opportunities in the lands to the North, as
Chinese investors have already done.
What is the likely economic value of
all the trade and investment that is likely to result from the revival of land
transportation and trucking through the broader region of Central Asia? Even though the Bhutto-era commission in
Pakistan attempted to estimate the amount, any figure would be merely a guess.
What
we know for sure is that the opening of regional land transportation systems
will help overcome the economic isolation of all Central Asia, including
Afghanistan, an isolation that has only deepened over the past century and a
half and which reached a nadir in the period 1936-2001. During these years nearly all trade from the
ancient centers of Central Asia was inefficiently channeled northward through
Russia. While it is true that
Afghanistan shipped fruit and vegetables to Russia before 1979, the reciprocal,
balanced, and many-sided exchange of goods and products that is the hallmark of
a healthy trading system did not exist.
Nor did it exist over any other border in the region, whether
Pakistan-Afghanistan, Iran-Afghanistan, India-Pakistan, China-Tajikistan,
Kyrgyzstan-China, etc., etc.
The result was a thoroughgoing economic
isolation that even now imposes a kind of “distance tariff” on all goods and
products entering or leaving the region.
For
Afghanistan and all its neighbors to the North, the key to overcoming this
isolation will be easy access to the port of Karachi. Most world centers of wealth are ocean ports, or are at least
closely linked to them. Just as the
Indus valley was the “switch-point” for trade and cultural contact as early as
the Harappa culture, it will again become so, with Karachi as its link with the
sea. China recognized this truth when it recently committed itself to help in
the construction of new port facilities west of Karachi.
While the full economic impact of
renewed trade in Central Asia can only be guessed, we can speak more confidently
of the social effects. Free trade will
create markets, which will create jobs.
The cost to remote mountaineers of seeds, livestock, equipment and other
necessities will decline. Farmers in the Ferghana Valley and further north in
Kazakstan will be able to market their products in India, as they did four
centuries ago in Mughal times. Trade
will generate governmental income from taxes and tariffs, which will help
support security forces, basic human services, and education. As all this comes to pass,
those
conditions that have given rise to a culture of violence, religious fanaticism,
and narco-business across the region will begin to fade.
These benefits will not come without a
price. Everywhere on earth trucking and overland trade offer tempting
opportunities for corruption, especially in the sphere of tariff and tax
collection. Smuggling, too, has always
been a huge enterprise in the broader region of Central Asia and remains so
today. Until the establishment of freer
trade and lower tariffs, it will doubtless continue, and with it willcome the
criminal gangs that feed on it.
Hijacking will thrive until national and international controls are
strengthened. Even more ominous is the
further spread of AIDs, which is proliferating along the highways and trade
routes of Central Asia the Indian subcontinent thanks to widespread
prostitution and intravenous drug use.
However great the economic and social
benefits of renewed regional trade
across the broader region of Central Asia, they are fully matched by the
huge gains in world security that will flow from these changes. Indeed, it is hard to imagine any other
practical and simple steps anywhere that would bring about greater geopolitical
benefits for all.
One may speak of ten different areas
in which these improvements will be quickly felt:
First, the revival of regional trade
will do more than any other single measure to rebuild the Afghan economy,
generate state income, and enable the government to provide security and basic
human services to its people. This in
turn will undercut the appeal of extremist and criminal activities. And it will
do so in a way that reinforces Afghanistan’s need to maintain cordial relations
with all its neighbors.
Second, trade with Afghanistan and the
broader region of Central Asia, as well as with India and Iran, will stimulate
the flagging economy of Pakistan.
The
port of Karachi will become a regional hub and Pakistani businesses will
be
able to exploit new opportunities in every direction.
Third, Indians will not choose to
remain aloof from this opportunity, even if the price is improved relations
with Pakistan. While this will not in
itself resolve the conflict over Kashmir, it will improve the better the
climate in which the parties address that thorny problem.
Fourth, through region-wide trade to
the northeast and east, Iran will reclaim its traditional vocation as a
pragmatic trading state. This will tip
today’s fragile balance between mullahs and merchants in favor of the latter,
hastening positive political change in that country. It will also cause Iran to look eastward and will distance it
from the messy and seemingly intractable problems of the Arab world.
Fifth, by renewing trade with their
age-old partners to the south and southeast and by gaining direct access to the
nearby port of Karachi, the new states of Central Asia will become economically
more viable and sustainable.
While
region-wide trade will benefit all five of these states, the impoverished
mountain countries of Tajikistan and Kyrgyzstan will see the biggest gains as
they acquire the ability to market their most valuable product, hydroelectric
power.
Sixth, because these economic benefits
can be reaped only when harmonious and productive relations prevail among the
regional states, they will encourage all the Central Asian leaders and their
governments to work with, rather than against, each other.
Seventh, in the five new states, as in
Afghanistan, Pakistan, and Iran, trade and investment will favor the formation
of an independent middle class and undercut the appeal of radical Islamist
movements. As the new governments gain
in confidence they will be able to tolerate greater openness and participation
by members of the public. This will in
turn strengthen their identity as moderate Islamic societies ruled by secular
states. As such, they will present an
alternative model of modern development to the entire Muslim world.
Eighth, through the opening of trade relations with their natural partners to the south and access to the port of Karachi, the new states of Central Asia will shed their one-sided dependence on Russia and reduce that country’s ability to control their overall destinies. Stated differently, free trade will do for these countries what multiple pipelines will do for the oil-producing countries of the Caspian basin.
Ninth, the growth of stability in Afghanistan and
the broader region of Central Asia will address what Russia has for a decade
identified as its number one security concern.
Free trade with the south clear to Pakistan and India will stimulate the
flagging economies of the Urals region as well. All this will cut the grounds
from under those in the Russian military and intelligence services who feel
that they must somehow regain a deciding voice in Central Asian affairs. The waning of neo-imperial sentiment will in
turn enhance the prospects for more open public life in Russia.
Tenth, the establishment of stable and prosperous regimes in neighboring Afghanistan, Kazakstan, Kyrgyzstan, and Tajikistan and the fading of radical Islamist currents there will address China’s major security objective, namely, that these countries not become transmission points for destabilizing movements within Turkic and Muslim Xinjiang. While this will not resolve the question of
Xinjiang autonomy (any more than it will resolve the analogous issue in Kashmir) it will at least improve the climate in which it can be considered.
Reviewing this list, it is clear that the establishment of free trade throughout the broader region of Central Asia promises benefits for all and liabilities for none. It is a policy that is not directed against the interests of any state in the region. On the contrary. it is a policy that promotes the long-term objectives of all the states and of their peoples.
One might reasonably argue that over time the regional transformation described above will take place on its own, without any major push from any quarter. Supporting this claim is the fact that the changes in question are not either new or revolutionary. Rather, they will bring about the reestablishment of certain relationships that proved their value over the course of several thousand years. The fact that the first steps along these lines are already visible lends further credibility to this argument.
At the same time, the region in question poses unique dangers. No other area on the planet is surrounded by four, possibly five, nuclear powers and a sixth power, Turkey, that is a NATO member. Nowhere else do the tectonic plates of several great civilizations and economic zones grind so directly against one another. So while the opening of freer trade may somehow be in the natural order of things, the risks of the process going awry are enormous. And were that to happen, it would put at risk not one but several of the relationships on which world security is grounded.
However distant the United States may be from this region, it cannot be indifferent to any conflicts that arise there since they would inevitably involve major powers with which it maintains vital relationships. So it behooves America to do what it can to bring about the transformation described above. To fail to do so would be to throw away all the potential good that can flow from its Afghan intervention.
Bu there is another and yet more decisive reason for the United States to assume a firm position of leadership in this matter. We have argued that every country in the region has reason to support the reestablishment of the historic trade and culture zone of Central Asia. Yet at the same time, if any one of the regional powers, or even any sub-grouping of them, were to seek to assume leadership in this process it would arouse understandable anxieties among the others. The most basic truth regarding this emerging region is that no single power or pair of powers can provide the security umbrella that the region as a whole so urgently needs. Unilateral action by any one or group of the participants, even if it is in the name of a common good, would be seen as an attempt to gain unilateral advantage at the expense of the others.
For this reason, the President of the United States should convene an international conference, to be held in Washington, to consider the needs of trade and investment throughout the region of which Afghanistan is the center. The limited purpose of this conference should be to address the four prerequisites enumerated above. In taking this step the United States would declare at the outset that it seeks no further role for itself in this matter. However, it must stand ready to provide financial assistance to put in place the four prerequisites, or to lead an effort to raise the necessary money from other countries and donors. In comparison with the price tag on a Marshall Plan for Afghanistan and all Central Asia, the cost of this important initiative will be modest. And it is far more likely to work.
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