Laying the Groundwork for Afghanistan’s New Silk Road

Over the past year, the United States, as part of its broader transition strategy in Afghanistan, has embraced the promotion of regional trade and transportation as a way of fostering sustainable economic growth in the country. More broadly, this strategy would also lead to greater economic and political interdependence between Afghanistan and its neighbors. As its proponents -- myself included -- see it, Afghanistan would serve as a crossroads for rapidly developing overland trade in Eurasia, a situation that would bring along with it a measure of development and stability.

Such infrastructure would allow Afghanistan's agricultural products and mineral wealth to reach regional and global markets. Indeed, Afghanistan served this role from the ancient Silk Road period up until about 500 years ago, when sea trade and other factors diminished overland trade. But today the burgeoning emerging Eurasian economies, including China, India, Russia, and Turkey, are increasing their demand for such trade routes. It is now essential for Afghanistan's economic development, as well as its political and military security, that this role be renewed in a New Silk Road.

This vision, which has its roots in Afghanistan's own development strategies going back to 2002, was articulated by Secretary of State Hillary Clinton in July. It was reaffirmed by the UN General Assembly in September and again by the participants in last month's Istanbul Conference, who issued a statement that endorsed "Afghanistan's role as the land bridge in the 'Heart of Asia' connecting South Asia, Central Asia, Eurasia, and the Middle East."

At the heart of the New Silk Road strategy lies the promotion of trade liberalization between Afghanistan and its neighbors, with special a focus on reducing bureaucratic and administrative inefficiencies at border crossings and on improving transit and energy infrastructure. Such a focus makes sense for Afghanistan for a number of interrelated reasons.

For starters, Afghanistan is a landlocked country, which means that it has historically had reduced access to global markets. Promoting Afghanistan's connectivity to its neighbors as well as to the rest of the world is the obvious first step in beginning to think about raising the country's growth potential. Sustainable economic growth, together with improved security and political reconciliation, is an essential component of Afghanistan's stability after 2014.

Beyond that, the rapid economic growth of large emerging economies is fueling rising levels of economic trade between East Asia, South Asia, the Middle East, and Europe. For example, between 1991 and 2008, Chinese-Indian trade grew from $265 million to $51.8 billion; over about the same period, Chinese-Russian trade grew more than tenfold, to nearly $60 billion; and China's imports from Central Asia went from a little more than $160 million to almost $7 billion.

An increased demand for natural resources in China and India has driven up prices for energy, metals, minerals, and rare earth elements. The revenue potentially created by these exports is changing the political calculations in supplier and consumer countries, creating stronger commercial justifications for projects that were previously deemed unfeasible. For example, Afghanistan, India, Pakistan, and Turkmenistan are now showing greater interest in building the TAPI gas pipeline to deliver Turkmen gas to energy-hungry customers in South Asia.

Afghanistan can take advantage of these regional changes by continuing to improve its transit infrastructure. Even more important, it should reduce the bureaucratic and institutional obstacles at its borders. For this reason, the effective implementation of the Afghanistan-Pakistan Trade and Transit Agreement is especially important.

At the same time, promoting greater connectivity between Afghanistan and its neighbors is not just an economic strategy but also a political one. If Afghanistan's neighbors benefit economically from and have a stake in the country's economic development, they will have incentives to support the long-term stabilization of Afghanistan as well. As set forth in Istanbul last month, economic incentives should reinforce and support the political process.

It should be noted that a focus on economic growth is not a call for more aid projects. In fact, it is the reverse: Washington should move away from propping up an expensive and unsustainable aid-based economy in Afghanistan and instead carry out a realistic assessment of how the country can build up trade and investment within the region.

In many ways the United States is late in embracing this idea. Afghan officials have been telling Washington from the beginning of the U.S. intervention that development of transit infrastructure is an essential priority. Back in April 2002, when he was interim chair of Afghanistan's transitional administration, Hamid Karzai said, "If the international community is really serious in seeing Afghanistan secure, it must help begin reconstruction of infrastructure projects -- the first of which is roads. When we speak about these projects, no one is interested." Since then, Kabul has persistently highlighted its potential as a regional trade and transit hub; this idea was the leading concept of the Afghan government at the Kabul conference in July 2010, when the international community endorsed the transition to full Afghan sovereignty by the end of 2014.

As such, for public relations and political reasons, the United States should emphasize that the New Silk Road is a plan hatched not in Washington but in Kabul. Emphasizing the strategy's indigenous roots not only has the virtue of being true but would also help allay the suspicions of other regional players (Iran and Pakistan to name two obvious ones) that the United States seeks to subvert their interests by advancing its own strategy. Iran and Pakistan are skeptical of the New Silk Road strategy to the extent that they view it as a U.S. plan. Both Tehran and Islamabad have an interest in seeing improvements in Afghanistan's energy, trade, and transit infrastructure. (Iran, in particular, has developed port, road, and rail infrastructure to improve connections with western Afghanistan and the city of Herat.) Strengthening Afghanistan's trade and transit infrastructure is one area of common interest between Washington and Tehran.

Another criticism argues that these plans are naïvely optimistic and do not take into account the predatory, rent-seeking nature of many regional governments, an especially acute problem in Central Asia. After all, leaders in the region often act less out of national interest and more out of a desire to protect the interests of a very narrow elite.

But that does not mean that the New Silk Road project is inevitably doomed. Powerful economic forces are driving the reconnection of Eurasia, and any leader who chooses not to make his territory more attractive and efficient for the booming trade of goods will be bypassed. For example, consider the recent progress between India and Pakistan: the two countries' commerce ministers met earlier this year for the first time in 35 years. Delhi and Islamabad have granted most-favored-nation status to each other and have begun taking measures to open the Wagah border crossing to overland trade.

Another set of criticisms of the New Silk Road strategy in Washington is that the benefits of many of its projects -- such as building of rail lines and the TAPI pipeline -- will come about long after the 2014 deadline for U.S. and NATO troops to withdraw from Afghanistan, if ever. But this criticism overlooks the fact that rail lines are already opening (the first line opened earlier this year, on the Uzbek-Afghan border linking Hairatan with Mazar-i-Sharif) and a national ring road is nearly completed.

True, some of these projects will be completed after 2014 -- but if that deadline is the critical landmark for developing an economic strategy, the international community might as well throw in the towel now. It is unrealistic to expect that any set of policies will be able to fully address Afghanistan's challenge of promoting sustainable economic growth in such a short period of time. What both Kabul and its Western allies need is a more fully developed road map of the short-term, mid-term, and long-term goals.

In the short term -- say, the next three years -- the focus of the United States and its partners should be to mitigate the potential impact on Afghanistan's economy that will come from downsizing the foreign military presence. Over the last ten years, the demand for goods and services created by the foreign soldiers and contractors has contributed to Afghanistan's annual ten percent growth rate. Many of the fruits of enhanced regional connectivity of the Afghan economy will accrue in the mid-term, as these measures will support the development of Afghanistan's considerable mineral resources, manufacturing sector, and agriculture.

What Afghanistan needs now is a far more detailed and credible economic and cost-benefit analysis of what projects should be prioritized to provide the greatest payoff for business development, job creation for young men, and increased revenue for the Afghan government. First up should be reducing bureaucratic obstacles at Afghan and regional border crossings.

Critics are indeed correct in pointing out that the New Silk Road is more of a vision than a strategy, since it lacks adequate analysis to guide its development and implementation. But this work is currently underway, and more analysis will be rolled out over the next six months in preparation for the meeting of NATO ministers in Chicago in May, when the Afghan government will likely formally launch a more developed New Silk Road strategy. Before that, the Fifth Regional Economic Cooperation Conference on Afghanistan in Tajikistan in late March will be an ideal opportunity to table a draft New Silk Road Strategy, including priority infrastructure projects and how they will accelerate regional integration, reduce barriers to trade, and foster private sector investment.

Although these multilateral intergovernmental gatherings are essential, any economic development strategy for Afghanistan and the region needs more involvement from private sector actors to be successful. In the long run, the private sector will be the real arbiter of success. Private sector engagement, guidance, and support will be essential for the development of trade and transit infrastructure. Indeed, these are the forces that are the backbone of the ongoing reconnection of Eurasia -- a geostrategic and economic phenomenon that is relevant to, but much larger than, the U.S. campaign in Afghanistan.