Looking Long-term: Afghanistan as “Regional Hub” By Hon. Don Ritter, Sc. D., President & CEO, Afghan American Chamber of Commerce (AACC) The precipitous reduction of funds entering the Afghan economy not only in military spending but also on the civilian side is a process which has already begun, and so it is commonplace for most commentary to focus on the very near-term and the socalled transition period. This makes sense, as the future, both political and economic, is not easily predictable beyond transition. The burning question that everyone is asking is “transition to what?” The hallmark of transition is the “complete withdrawal of foreign military forces by the end of 2014”. Without commenting on the wisdom of that policy decision – the arguments pro and con are countless – it is appropriate for someone at this Summit to address the longer-term and lay out what’s at stake and what needs to be done to make for an economically viable, politically stable Afghanistan. As someone involved in Afghanistan for more than 30 years (and looking forward to 30 more!), it is fitting that such a task falls to me. My assumption, indeed my strong belief, is that with heavy doses of perseverance, Afghanistan and its friends will muddle through transition and provide the necessary conditions required for economic growth and business investment, requisites for employment of the Afghan people and, thus, stability. A regional hub is a way to look at Afghanistan longer-term, a vision of the future of the country that works for Afghans, neighboring countries, and donor friends. It’s a kind of geographic jiu-jitsu taking the weaknesses of being landlocked and using them to be the center of regional activity. Working towards Afghanistan as regional hub provides the Afghan people with a positive sense of what their nation could become, and gives them a reason to be optimistic about their future. A positive view of what Afghanistan could become is also essential to counter the deadly, basket-case image so often and unfairly reported in the Western media.
Afghanistan as regional hub provides a salutary endgame for domestic businesspeople and foreign investors the world over, a base upon which to plan, and build over the longer-term. Regional hub status assumes sufficient security, reasonable Afghan governance, particularly economic governance, bearable amounts of corruption, relatively wise donor nation assistance policies and adequate private sector engagement and investment. Please note my qualifiers above (“sufficient”, “reasonable”, “bearable”, “adequate”, etc.) and this is vitally important. Afghanistan does not need to be Switzerland to succeed! Conversely, enormous strides have been made in becoming modern in comparison to the primitive state of the country before 9-11. Anyone who has experienced Kandahar in the late 1990’s…. or a bombedout Kabul… will know exactly what I mean. The statistics simply do not reflect the many established beachheads of physical, human and economic progress towards modernity (in the midst of an insurgency) made during the last 10 years. First-timers landing in Kabul are stunned to find a hustling, bustling city. The same is true for Mazar, Kandahar, Herat, Jalalabad….
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Indeed, one can argue convincingly that money and militarization, to fight the forever unpopular and always brutal insurgency, are themselves the underlying fertile ground in which such damaging corruption has grown apace. I have said this before and I will say it again, “corruption is in the DNA of a contract economy”. So dear TAS III Summiteers, there is a real ‘silver lining’ for the Afghan people in the reduction of the size and scope of militarization and, with it, the contract economy. This means that many attending this Summit will benefit from engaging more and more in the market economy as we all face the reality of fewer contract opportunities in the years ahead. Indeed, the market economy will have a greater chance of success without the tremendous distortions of an externally-funded wartime economy. Afghanistan needs to work with its neighbors and friends on a decadal long, mutually profitable agenda to address the significant challenges that confront the achievement of Afghanistan as regional hub. If the U.S. and allies could put the kind of focus, management, and energy into (helping Afghanistan) reduce cross-border impediments that it puts into fighting the Taliban, the results would go a long way towards achieving regional hub status. But make no mistake, TAS III Summiteers, this vision for Afghanistan will not materialize over the next couple of years. This is decidedly a post-transition affair. The diplomatic effort with difficult neighbors, the upgrading of border infrastructure, human as well as physical, the additional internal road, air, rail, electrical and fuels transmission infrastructure, all amount to large and decadal-long investment, the majority of which will be private sector derived. Regional hub reality and its requisite transportation assets are essential to effectively develop the region’s mineral resources and in so doing commercially link the countries of South and Central Asia with each other and with the rest of the world. Neighboring countries, donor nations, the World Bank, and the Asian Development Bank must work with each other and the private sector to plan and organize the execution of high priority investments. But let’s be honest, the critical role must be played by competent and trusted Afghan leaders. Afghans must step up to this challenge and show the world they are ready to lead in the execution of their own destiny, a destiny that holds benefits for peace and prosperity for a troubled area of the world. Regional hub means completion of the Ring Road, East-West and North South road corridors, Salang improvement, and border crossing enhancements; it entails building upon the achievement of rail connection from the Uzbek border to Mazar-i-Sharif to encompass rail links to Turkmenistan, Tajikistan, to Pakistan, and on to India. How else to deliver ores and other products to their regional markets? How else to connect the Indian subcontinent’s robust land transport
capacity and production to markets in Central Asia and beyond? How else to engage Pakistan in the promotion of peace if not by engaging it in profitable business? Regional hub encompasses electrification via new and less costly sources from Kirghizstan and Tajikistan, the completion of hydro projects from Kajaki to Kunar to Kokcha. Electricity is the foremost input to increasing employment. It allows for the development of information and communications technologies which have already shown transformative promise for the Afghan economy and society. With sufficient electricity, Afghanistan can produce finished, higher value-added goods from its agriculture and other national resources. Transmission of electricity from Tajikistan to Pakistan engages Pakistan. Gas from Sherbegon can serve the Aynak and Hajigak mines. For perhaps the greatest regional economic and stability impact, the construction of the Turkmenistan, Afghanistan, Pakistan, India pipeline, aka TAPI would be a boon to achieving regional hub status. Closer economic ties will inevitably lead to closer political ties and improve the prospects for peace and stability. Afghanistan as regional hub investment will improve commercial investment opportunities in other countries in the region. When each of the countries in the region has a significant stake in the politically stability and economic performance of their neighbours, the prospects for peace will be greatly enhanced. There has been much talk about entering into “public-private” partnerships, but few practical opportunities for actually doing so. The Afghan government appears committed to exploring innovative partnership arrangements and the implementation of Afghanistan as regional hub offers a platform on which to build these relationships. In sum, by removing the impediments to continental transit and trade across Afghanistan’s territory, opportunities will open up for some of the most promising ways forward for Afghanistan. By building up critical capabilities and new commercial and job creation opportunities for Afghanistan and its neighbors, Afghanistan’s transition will be accelerated from an era of insurgent-fueled violent conflict and aid dependency to one of stability, regional integration, and greater economic self-sufficiency. It’s time to stop the piecemeal approach to Afghanistan and focus our efforts on an integrated approach, one which will make the enormous sacrifices of blood and treasure of the last decade worthwhile. It would also answer the burning question that everyone is asking: “transition to what”?
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