Saad Shabbir
The Afghan presidential elections have taken yet another turn after the first round led to a run-off between the two candidates – former foreign minister Abdullah Abdullah and former World Bank official Ashraf Ghani. The announcement of preliminary results on Sunday indicate a clear margin of 1.3 million votes in favor of Ashraf Ghani. Just before the official announcement of preliminary vote count, Abdullah Abdullah raised concerns over the impartiality of the Independent Election Commission of Afghanistan with his followers engaged in countrywide protests. With the final results of the presidential elections already causing unrest and ISAF pulling out its troops culminating a decade long war, Afghanistan is on the brink of a major turning point in its history.
These key events will be crucial in defining the future of Afghanistan, the trickle down effects of which will determine the stability of the Pak-Afghan region. Concerns about what the future holds for this region with a long history of violence and insurgency are growing eloquent and much hue and cry is being raised in talk shows and newspapers. Local researchers and development organizations working here have also expressed concern about economic stability and peace in post-2014 milieu.
Trade plays a vital role in a region’s stability. Afghanistan has been at the junction of trade routes between central, south and west Asia for over 3000 years now. Pakistan has a twofold advantage in its trade relations with Afghanistan; as a transit route between Afghanistan and the west and as a supplier for Afghanistan’s growing needs of the post-war economy. The bilateral trade between Afghanistan and Pakistan has shown an increasing trend since the US war on terror with an increase in trade value of $1.3 billion from US $1.1 billion in 2005-06 to US $2.4 billion in 2011-12. These statistics show the documented trade only. Research by the Sustainable Development Policy Institute (SDPI) indicates that the undocumented trade is estimated to be three times that of the documented trade.
This increase in trade has increased employment particularly in trade, transport, warehousing, and communication (TTWC) sectors in the neighboring provinces on either side of the border. A study by SDPI on the micro economic impact of Pak-Afghan transit and formal trade in Khyber Paktunkhwa and Balochistan has brought to light some worrisome statistics.
According to calculations based on Household Income and Expenditure Survey (HIES) in 2004-05 households that were associated with employment in TTWC sectors were estimated to be about 1.64 million which increased substantially to 8.2 million households in 2011-12. The mean nominal incomes in TTWC sectors increased from 6000 PKR to 11,710 PKR in 2004-05 and 2011-12 respectively. In 2004-05, 38% of these 1.64 million households in TTWC fell into the two poorest income quintiles. In 2011-12, 52% of 8.2 million households fell into the poorest income quintiles implying that TTWC has gradually become a significant employment provider.
To keep the Afghanistan-Pakistan trade momentum growing, it is imperative to ensure a smooth transition when the ISAF exits so that the peace, security and trade related dividends in the region does not go downhill from there. Analysts describe the current setup of Afghanistan as a region with pockets of power with the warlords. Therefore, it is crucial that the new government prevents yet another upsurge of militancy. One way being proposed is to sign the Bilateral Security Agreement (BSA) with the USA which will define the role of US forces in Afghanistan post-2014. Moreover, the Afghans must ensure a stable supply of basic necessities including food and clothing items to avoid panic and a state of anarchy.
Pakistan, which is already dealing with the spillover effect of war in Afghanistan, is most vulnerable to what might happen there now. If political instability disrupts the trade balance between the two nations, there is a huge population in Khyber Pakhtunkhwa and Balochistan that might fall below the poverty line after getting hit by unemployment. Moreover, with a porous border Pakistan has no way to restrict Afghan refugees from entering the country lest a civil war breaks out again. The military offensive in North Waziristan has displaced more than 350,000 people. It is a big question whether Pakistan can support such a huge influx of refugees and add to the already overburdened social protection programs in place.
Pakistan and Afghanistan must let go of any grudge that they might have for one another and work together to pave the way forward. Both the countries cannot turn a blind eye from the impending storm and selfishly just save their own country. Whatever the scenario in future, it is time for both to realize that no single nation can prosper alone. The relations between Afghanistan and Pakistan have been tense for quite some time now. Any steps taken by Pakistan to ameliorate its relations with Afghanistan have not been welcomed with the desired response. It is time now for Pakistan to mend its ties with its upset neighbors and at the same time wisdom needs to be reciprocated by the upcoming Afghan government.
One of the key levers that can create interdependencies between nations is trade and investment cooperation. The government on both sides should look into possibilities of strengthening existing trade relationship and formalize liberal trading regimes between both countries. This may require initiating bilateral trade and investment cooperation agreements beyond the Afghanistan Pakistan Transit Trade Agreement. At the same time infrastructure cooperation particularly in transport and communications sectors can lend quick economic gains for both neighbors.
Saad Shabbir is a Researcher at Sustainable Development Policy Institute (Twitter: @SaadShabbir)
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