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19 September 2016

TRADE TANGLES IN S ASIA: GIVE THE SPOILER HELL

Sanket Sudhir Kulkarni

Afghanistan President’s clear-cut message to Islamabad to mend its ways on Afghanistan’s trade transit to India or face roadblocks in Pakistan’s efforts to enhance presence in Central Asia is Ashraf Ghani’s political master-stroke by hitting Pakistan where it hurts the most. It is opportune moment, India should cash in on the situation

Had Major General Naseerullah Babar been alive today, he would have been hugely disappointed with the current state of affairs between Pakistan and Afghanistan. His contribution in using Afghanistan as a launch pad to promote Pakistan’s Central Asia strategy in the late 1990s is well depicted by Ahmed Rashid in his book The Taliban: The Power of Militant Islam in Afghanistan and Beyond. According to Ahmed Rashid, under the protection of the newly formed Taliban, Gen Babar had personally led a convoy of trucks carrying Pakistani goods to Central Asia via Afghanistan. This was the first attempt to foster trade cooperation between Central Asia and South Asia in the post-cold war era. This process of linking up the two sub-regions of Asia received a further boost in 2001 when the United States arrived in Afghanistan. With the active backing of the Americans, ambitious plans were drawn up to launch energy and trade connectivity projects in the Central Asia-South Asia region.

But in the last two days, this process seems to have received an unprecedented jolt. According to report in Hindustan Times dated September 9, 2016, apparently fed up with Pakistan’s constant refusal to provide transit access to goods from Afghanistan to Indian markets, President Ashraf Ghani has threatened to cut-off Pakistan’s access to Central Asia. Since the last few months, Pakistan has literally pushed its western neighbour to the wall on the issue of trade transit. It seems if this stalemate continues, the current leadership in Afghanistan would be compelled to carry out this threat.

Strategically speaking, President Ghani has played a political master-stroke by hitting Pakistan where it hurts most. What he has essentially done is to send a clear-cut message to Pakistan that if it doesn’t demonstrate any flexibility on Afghanistan’s trade transit to India, then Pakistan’s efforts to enhance presence in Central Asia would be put to rest once and for all. As far as Afghanistan is concerned, President Ghani has clearly indicated in the same HT report that it has alternative trade routes like the Chabahar port to bank upon. For example, the opening of Iran in the last one year has also paved way for Afghanistan to increase its global engagement. Instead of using Pakistan as a transit point, Afghanistan can now divert its trade convoys down south towards the Chabahar port. Apart from its political advantages, the Chabahar option would also enable Afghanistan to access bigger export destinations for its products.

Given these circumstances, let us see what options Pakistan has if President Ashraf Ghani acts on his threat. To begin with, its continued intransigence on the trade transit issue would have serious implications on its strategic and commercial interests in Central Asia. It would effectively put halt to several energy and connectivity projects that Pakistan has been assiduously working on for some years now. Renowned Pakistani journalist Zafar Bhutta acknowledges in his recent article for The Express Tribune on September 11, 2016, that the immediate victim of this stalemate could be the TAPI pipeline project. For a country like Pakistan whose economic and industrial development hinges on natural gas imports, the non-realisation of TAPI project could have serious repercussions. With Turkmenistan gradually exhibiting more openness to new ideas lately, India and Afghanistan could jointly persuade Turkmenistan to seriously consider Prime Minister Narendra Modi’s suggestion of a land sea option for sourcing Turkmen gas.

Despite these obvious disadvantages to its national interests, several Pakistani analysts have been quick to defend Islamabad or rather in this case Rawalpindi’s hard-line position on the trade transit issue. In the same The Express Tribune article, Zafar Bhutta has suggested that Afghanistan’s threat would not affect Pakistan in anyway as the latter has alternative economic corridors like the China Pakistan Economic Corridor (CPEC). These analysts have failed to gauge the real long-term consequences for Pakistan in its over-dependence on Chinese-sponsored projects.

However, it would be advisable for President Ashraf Ghani to keep his guard on. Given Pakistan’s obsession with obtaining strategic depth in Afghanistan as well as its long-standing objective to pursue trade with Central Asian countries, it may adopt an even more aggressive policy to undermine a democratically elected civilian Government in Afghanistan and install a more pliant regime. This statement will also now provide a good excuse for the military leadership within Pakistan to further pursue a hard-line policy towards Afghanistan. Despite his inclination to expand regional trade, Prime Minister Nawaz Sharif, who is himself politically cornered owing to corruption allegations, would find it difficult to resist any such advocacy from his military leadership.

To preclude the development of such a scenario in Afghanistan, it is imperative that India on its part, steps up the level of bilateral cooperation at the political and strategic level. The current decision by the Indian Government to expand the scope of defence cooperation with Afghanistan is a step in the right direction and must be sustained. In the coming years, India must remain forever willing to remain open and respond swiftly to any additional request for military assistance from Afghanistan in the coming future to ensure its regime’s survival. It must be remembered that a more militarily resilient and an economically prosperous Afghanistan is in India’s interest.

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