Region

On the Road through Beijing (and Kathmandu): The new Afghan leadership’s attempts to engage with Asia


Presidents Ghani and Xi, during the former's second trip abroad, after umrah in Saudi Arabia. Photo c/o ToloNews.

Presidents Ghani and Xi, during the former's second trip abroad, after umrah in Saudi Arabia. Photo c/o ToloNews.

Compelled by widening economic and other challenges, the new Afghan government seems determined to diversify Afghanistan’s foreign relations by slowly forging stronger economic and political ties with countries in the region. For this purpose, it has at least two cards to play: the country’s geographic position as a corridor for regional trade and its natural resources. Looking at two forthcoming regional conferences, a ministerial follow-up conference of the Heart of Asia/Istanbul process and the SAARC summit, AAN’s guest author Said Reza Kazemi* sees a renewed interest in attracting foreign investment from the neighbouring regions, particularly China, as part of a new concept of Afghan foreign policy, but cautions against challenges on its way.

It was China’s Minister of Human Resources and Social Security Yin Weimin who was sent by President Xi Jinping to attend the inauguration of the new president Ashraf Ghani Ahmadzai and his CEO (i.e., quasi-prime minister) Abdullah Abdullah on 29 September 2014. The following day, on 30 September, Yin met Ghani, conveying an official invitation from President Xi and stressing that “China highly values Sino-Afghan relations and the continuation of its partnership and friendship with Afghanistan” (read the Chinese Foreign Ministry statement here) and even talks about a “bilateral strategic partnership of cooperation”. (Yin also met Abdullah and former President Hamed Karzai.) Ghani’s visit to Beijing – where he arrived on Tuesday (28 October 2014) – is his second high-level foreign visit. It follows his umra trip to Saudi Arabia, another potential regional partner, both in economic terms and as a venue for rekindling talks with the armed insurgents. Some Afghan observers called the trip hajj-e ebadi siasi – a spiritual-political pilgrimage.

The road to the Beijing conference

The visit of the new Afghan president to China has been planned for quite some time. The Chinese government was already preparing to host the 4th ministerial conference of the Heart of Asia process (also known as Istanbul process) on 29 August 2014 (read this author’s previous dispatch here) which, however, had to be delayed because of the months-long presidential election deadlock in Afghanistan. It will take place instead on 31 October 2014. From the beginning, the Chinese government had this conference in mind as a venue to present Afghanistan’s new leadership to the broader world and – as some western media read it – to show the growing Sino-Afghan closeness during the last phase of the US-led transition into the post-ISAF period (see, for example, here).

On the Afghan side, there are at least two reasons why the new Afghan government is increasingly interested in bolstering its relationships with its Asian neighbours after 2014, particularly China. First, Afghanistan has entered into a worrying economic slowdown and acute fiscal crisis as a result of the Western drawdown which has been exacerbated by the protracted post-election dispute (read also this AAN dispatch here). Afghanistan’s Gross Domestic Product (GDP) growth has fallen to 1.5 per cent in 2014 from 14.4 in 2012 “as uncertainly over the political and security situation led to a considerable slowdown in the non-agricultural sectors,” as the World Bank put it in its most recent report (here, p 40). According to the Afghan government, both internal and external revenues have dropped and the last election crisis cost USD 5 billion to the national economy. On 26 October, CEO Abdullah summoned acting minister and deputy ministers of finance to discuss the government’s budgetary deficit, estimated to exceed USD 500 million this year, and the reduction in both domestic and foreign revenues. In mid-September 2014, the Afghan Ministry of Finance asked for an acute financial bailout amounting to USD 537 million.

Additionally, and more in the long term, the Afghan government is required to assume progressively greater responsibilities in what is called the Transformation Decade (2015-2024) in financing and sustaining the post-2001 state in Afghanistan, as demanded by the US-led international community (see, for instance, here). This will also be a major topic in the upcoming next international Afghanistan conference in London which has been re-scheduled for 3 and 4 December 2014 from end-November 2014. According to an Afghan presidential media release, these issues were also discussed during US President Barack Obama’s first conversation with Ghani, Abdullah and other senior Afghan government officials via videoconference.

More importantly, the new Afghan government has started setting a new concept of foreign policy. In his inauguration speech, Ghani presented a “five-circle foreign policy” (watch it here), grouping current and potential partners into those circles. This reflects who the new president and his administration is slowly developing a new interest in Afghanistan’s neighbouring countries (circle 1) and Asian countries (circle 4). The Islamic countries are in circle 2 (which is probably more politically driven as neither Saudi Arabia, the United Arab Emirates or Qatar have yet to respond to requests for more economic engagement in Afghanistan); Europe, the USA, Canada and Japan – who still provide the lion’s share to Afghanistan’s budget – are in circle 3 and international organisations in circle 5). The new Afghan president staunchly believes that:

Afghanistan’s geographic position can turn it into a hub for transit of goods and services. The mining sector can turn Afghanistan into an industrialised country. And our water and land can turn the country into an active and productive agricultural country… Asia is witnessing a major historical economic change. In the next 25 years, Asia will turn into the world’s largest economy. Our neighbourliness with China, adjacency to India and close connectedness to the Gulf and our neighbours can create a major economic change in Asia. Afghanistan is the heart of Asia, and we will turn it into the crossroads of Asia and the land bridge for regional connectivity.

The new interest in Asia is also seen in the intensity and frequency of meetings the new Afghan government leaders (the president and the CEO) have been allocating to neighbouring and Asian countries, including Iran, Uzbekistan, Tajikistan, China, Pakistan, India and, further afield, Turkey, in addition to its key western allies and supporters. In almost all these meetings, the Afghan government is presenting Afghanistan as a geographic hub for transit of goods and services and as a country with extensive natural resources to utilise – which continues to be hampered by a whole range of political, security and other hurdles and will require extensive advance investments that, in the current situation, not many investors will be ready to make.

Under current circumstances with the on-going war and lack of infrastructure, however, the two cards the Afghan government is trying to play are still more of a potential worth and still difficult to turn into economic and social gains. This is already seen in the case of the Chinese engagement in of the large Ainak copper mine in Logar province. The Chinese government-run consortium Metallurgical Construction Company (MCC) had to temporarily withdraw from the site last year due to insecurity caused by the insurgents (read a previous AAN dispatch here;  also here). In fact, China has increasingly come to realise – although not publicly expressed – that it will need security for its economic ventures into Afghanistan and even might have to take a part in its provision as well. Statements in the run-up to the Ghani visit that it continues to be ready to play a “huge” commercial role in helping rebuild the country points into that direction.

In the hydrocarbon sector, China’s largest oil company, China National Petroleum Corporation (CNPC), has also received a contract from the Afghan government to develop oil fields in the Amu Darya river basin, which the Afghan government estimates will bring it a profit of USD 7 billion. China also has security interests in Afghanistan, i.e. that the country does not turn into a haven for Uyghur separatists, whom China blames for insecurity in its western autonomous region of Xinjiang. China can also potentially press Pakistan to honestly co-operate with the new Afghan government in security and economic areas – that’s at least the hope in Kabul and western capitals.

China making it clear that its interest is commercial also indicates that it is not willing take over the US’ and other current donors’ of channelling resources it Afghanistan without the hope of an immediate economic return. As a result, Afghanistan has the potential to not just have a productive partnership with China, but also to be disappointed by it, as Kabul’s current disappointment over the fact shows that the Ainak copper mine project would develop rapidly and tax money would soon start to flow.

Better co-ordination but still organisational and funding problems

As for the 31 October ministerial conference for the Heart of Asia/Istanbul process in Beijing, busy preparations have been on-going, increasingly co-ordinated by Afghan and Chinese government officials, notably Deng Xijun, China’s ambassador to Kabul, Hekmat Khalil Karzai (so far head of a think tank that was close to the Karzai government) and Eklil Hakimi (Kabul’s ambassador to Washington), Ghani’s special representatives for the process. Two ambassadorial meetings were held in Kabul on 14 and 23 October 2014. A part of the Afghan delegation to the coming conference already left for China before 15 October. There will also be a meeting of senior officials of the Heart of Asia/Istanbul process on 30 October to finalise the conference declaration a day before the opening of the actual conference. Similarly, the Afghan president’s schedule is packed in China: he will meet the Chinese president, prime minister and parliament speaker and, in the words of the Chinese Foreign Ministry, “have an in-depth exchange of views… on Sino-Afghan relations and issues of common interest”; sign agreements with the Chinese side in various fields that have not been made public yet; participate in a meeting of Afghan and Chinese businesspeople; visit China’s major institutions; and speak in Beijing’s Tsinghua University about relations between the two countries and regional and international issues.

But technical preparations aside, the Heart of Asia/Istanbul process is still fraught with organisational and funding shortcomings that cost it its effective implementation (read this author’s most recent dispatch on the regional process here). So far, the process has hardly done anything more concrete and practical than facilitating discussions and developing some training programmes, from disaster management to counter-terrorism. (1) One reason is that everything in the region does not revolve around Afghanistan. More important conflicts and priorities dominate the agendas of the key participating and supporting states such as the Indian-Pakistani conflict and Sino-Indian tensions. (2) The new Afghan government’s attempts to put its own issues further up on the priority lists in regional capitals will, therefore, need to be informed by this regional reality. As this attempted shift towards a larger role of Asian countries in Afghanistan will take time, the security agreements with the US and NATO – and the promise of continued financial support linked to them – provide some guarantee for the new Afghan government.

The Kathmandu conference and the Afghan government’s new interest in its South Asian neighbourhood

Amid reports about who meets who in Afghanistan, China and Saudi Arabia, a – at least symbolically significant – visit to Kabul by Nepal’s Foreign Minister Mahendra Bahadur Pandey on 21 and 22 October was widely missed by the media. Meeting president Ghani and his Afghan counterpart Zarar Ahmad Moqbel Osmani, Pandey invited Ghani to participate in the 18th summit of the South Asian Association for Regional Co-operation (SAARC) on 26 and 27 November 2014. Accepting the invitation, Ghani stated that “Afghanistan attaches vital value to SAARC”. The two foreign ministers announced that they intend to expand mutual economic, commercial and cultural relations. Currently, both countries have some diplomatic and educational contacts, mainly in SAARC framework, but there is a mutual learning potential as both countries are among the lowest in terms of human development indices in the region. Two important SAARC members, India and Pakistan, are also members of the Heart of Asia/Istanbul process (3) and SAARC is also among its supporting organisations (see footnote 1 below). Established in 1985, the regional organisation primarily intends to build and strengthen economic, social and cultural co-operation among the South Asian member states but is largely paralysed by Indo-Pakistani rivalries and conflicts.

Bilateral steps and regional “ifs” and “buts”

Just before the coming Heart of Asia/Istanbul conference in Beijing and the SAARC summit in Kathmandu, Afghanistan and Pakistan, both members of the two regional frameworks, signed the transit pricing agreement of the Central Asia-South Asia regional electricity transmission project called CASA-1000 on 11 October 2014 in Washington,. This was welcomed by the US as “one of the first foreign policy achievements of the new government of national unity in Kabul”. It is hoped that this agreement will help the project gather the necessary funding to move more quickly into the implementation phase. But together with Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas supply project, involving also Turkmenistan in Central Asia and India in South Asia, it is unlikely that the implementation and operation of these projects will go ahead smoothly, given rising insecurity in project areas, both in Afghanistan and in Pakistan, and the estimated initial costs of USD 8 billion. Nevertheless, it also indicates that – apart from regional frameworks – there is a lot of potential in bilateral relations in the region.

The many “ifs” and “buts” on security, funding and political differences aside, the new Afghan government is showing a renewed interest in its Asian neighbours and potential partners, particularly China. This can be seen as part of an emerging diversification of the Afghan foreign relations by the new political leadership in Kabul, trying to slowly move away from the country’s over-dependence on its US-led, mainly Western allies and international organisations such as the UN, towards emerging and dynamic Asian powers. Whether or not the new Afghan government will succeed in its attempts to galvanise more Asia-wide interest in its situation depends on its ability to forge and sustain meaningful, mutually beneficial bilateral and multilateral economic co-operation, maintained by increasing regional political détente and understanding. It will definitely not be achieved in a short time.

 

* Said Reza Kazemi is a PhD student (2013-16) at the University of Heidelberg’s Cluster “Asia and Europe in a Global Context.” Among his research interests are the local, regional and global dimensions of Afghanistan’s problems, particularly how these aspects get or get not interconnected in society and politics in the country and beyond. He has previously worked as a researcher for the Afghanistan Analysts Network (AAN).

 

(1) Heart of Asia/Istanbul process participating and supporting states and organisations

Participating states: Afghanistan, Azerbaijan, China, India, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Saudi Arabia, Tajikistan, Turkey, Turkmenistan, the United Arab Emirates (UAE)

Supporting states: Australia, Canada, Denmark, Egypt, European Union, France, Finland, Germany, Iraq, Italy, Japan, Norway, Poland, Spain, Sweden, the United Kingdom (UK), the United States of America (USA

Supporting organisations: United Nations (UN), Aga Khan Development Network (AKDN), Central Asia Regional Economic Co-operation (CAREC)/Asian Development Bank (ADB), Conference on Interaction and Confidence-Building Measures in Asia (CICA), Collective Security Treaty Organisation (CSTO), Economic Co-operation Organisation (ECO), North Atlantic Treaty Organisation (NATO), Organisation of Islamic Co-operation (OIC), Organisation for Security and Co-operation in Europe (OSCE), South Asian Association for Regional Co-operation (SAARC), Shanghai Co-operation Organisation (SCO)

(2) AAN has been analysing Heart of Asia/Istanbul process-related developments from the beginning, see here, here, here, here, here and here.

(3) Apart from India, Pakistan and Afghanistan, member states are Bangladesh, Bhutan, Maldives, Nepal and Sri Lanka. SAARC also has a number of observer states, including Australia, China, the European Union, Iran, Japan, Mauritius, Myanmar, South Korea and the US. There will also be other meetings under SAARC framework, including meetings of the Programming Committee (22 November), of the Standing Committee (23 and 24 November) and of the SAARC Council of Ministers (25 November).

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