Facilitation of Afghan trade, a bilateral move for multilateral gain

In recent weeks, Pakistan has taken important steps to enhance bilateral trade with Afghanistan and to facilitate the neighbor's transit trade. For this purpose, all border crossings have been reopened and Afghan overland exports to India through Pakistan's Wagah border resumed on July 15. The Wagah gesture was an exceptional one from Pakistan in the backdrop of a freeze in its bilateral trade with India since last year, following the latter's increased oppression in Kashmir.

Understanding the full impact of Pakistan's recent decisions is important.

Pakistan has been giving priority to restoration of peace and stability in Afghanistan. The appointment of Ambassador Muhammad Sadiq as Islamabad's Special Representative for Afghanistan was indicative of a new phase in Pakistan’s diplomatic efforts. Pakistan’s discreet but substantive role in facilitating Taliban-US talks in Doha and quiet support for early commencement of intra-Afghan negotiations is another facet. A successful culmination of the peace process with an intra-Afghan settlement is the goal. But any political settlement to endure would require firm economic foundations.

Afghanistan’s war-torn economy must be turned around. This requires cooperation of all Afghan parties and a sincere commitment to the basic interests of the Afghan people. In a COVID-19 hit world, expectations of continued international financial support for Afghanistan are somewhat dim. The withdrawal of US and allied forces from Afghanistan needs to be synchronized with economic facilitation measures for making Afghanistan self-reliant. Pakistan and other regional countries would have to do what is necessary, often with cooperation of the international community, particularly the US, Russia and China.

Pakistan realizes that the destinies of two brotherly nations are intertwined. Peace and development are a common theme that run through the Afghan-Pakistani region. Economic development of Pakistan can only achieve optimal levels in conditions of social and political harmony in Afghanistan and by building a synergy between the two. As such, in days and years ahead, Pakistan's only role would be to facilitate Afghanistan's economic transition to a normal economy.

Opening avenues for regional and transregional economic cooperation requires inclusion of Afghanistan. Trends towards greater regional cooperation are being impelled also by the COVID-19 global economic fallouts. As the western hemisphere raises walls, traditional export destinations may be less available. The economic decoupling thesis that is currently prevailing globally may produce severe economic shocks and rend asunder the world economy as we have known for centuries.

Drastic economic restructuring of the world economy, if only predicated on geopolitics will have unpredictable outcomes. Pakistan and other developing states need to position themselves accordingly. In Pakistan’s region, there are abundant human, natural and technological resources to build economic firewalls against economic depression and for economic survival, but also in aspiring for shared prosperity. The frameworks of the Shanghai Cooperation Organization and the Economic Cooperation Organization include all main regional states. These frameworks must now be utilized with a sense of urgency.

Unfortunately, the South Asian Association for Regional Cooperation (SAARC), the only other vehicle for South Asian economic cooperation, has been rendered ineffective by New Delhi with the net effect that India is today increasingly being isolated within the region. In offering one-way trade transit to India from Afghanistan, Pakistan has in mind the well-being of the Afghan economy and in an oblique sense sends a message to India not to negate politically its geographic realities in its blind quests for global hegemony.

Major geo-economic restructuring is already in the offing. The reported China -Iran $400 billion framework agreement spanning 25 years for energy plus is a major development that has considerable importance for the region. The Indian venture in acquiring rights in the Iranian port of Chabahar has failed. Reports indicate that the Chabahar-Afghanistan rail link up being worked by India has been cancelled by Iran. Consequently, India’s hopes of bypassing Pakistan to Central Asia have been dashed. At some point Chabahar and Gwadar will be linked and prosper as sister ports.

The bilateral China-Pakistan economic project, China–Pakistan Economic Corridor (CPEC), has witnessed recently over $11 billion of new developments, including two large hydro-electric projects and a Peshawar to Karachi mainline railroad linkup. While Chinese investments now will exceed $70 billion, the railroad linkup extends a modern high-speed transportation network almost to Afghanistan's borders.

CPEC will become multilateral soon. It is an inclusive concept. CPEC will extend to Afghanistan and Iran and possibly the Gulf region and Turkey as well, if these states so wish.

Pakistan and India have among many, one stark distinction: Pakistan is placing a premium on geo-economics while India exclusively on geopolitics. Time and history will vindicate Pakistan’s choice. It is, as a Chinese saying goes, "Better to have good neighbors than distant cousins."

– Salman Bashir is a Pakistani diplomat who served as Foreign Secretary of Pakistan and as High Commissioner of Pakistan to India.

Twitter: @SalmanB_Isb