Afghanistan and Regional Economic Cooperation Between Central Asia and South Asia

(Elnaaz Amini)

Regional integration is one of the important issues specific to Afghanistan and its neighbors in the three big Asian regions namely Central Asia, South Asia, and the Middle East. With the strengthening of regional cooperation initiatives in Central Asia and South Asia, Afghanistan’s role as the shortest and most cost-effective route of connectivity in the region has increased.  Afghanistan, with the aim of re-establishing the country’s traditional role as a regional land bridge is one of the key issues in expanding regional activities.

The most important reason for the significance of Afghanistan in the region is the essential need for economic cooperation between Central Asia and South Asia. South Asian countries have more advanced technology than Central Asian countries, but suffering from energy shortages, and provide their electricity, and gas needs from Central Asian countries. In a simpler form, the deposits in Central Asian soils can meet the energy needs of their neighboring countries, one example is the TAPI project, which carries gas pipelines from Turkmenistan, and through Afghanistan to India and Pakistan. Afghanistan also offers the shortest and most appropriate energy routes between Central Asia and South Asia. All planned energy routes between Central Asia and South Asia pass through Afghanistan. If we add the impact of Central Asia-South Asia railroad corridors through Afghanistan in the regional trade, the gains between the two regions through Afghanistan will be much larger.

Afghanistan as a key component of economic integration between the two regions, is the reason of establishment regional cooperation initiative, like as: the Regional Economic Cooperation Conference on Afghanistan (RECCA), the New Silk Road (NSR) initiative, and the Istanbul Process.

Afghanistan has participated in most of the regional organization, and regional cooperation with the aim of expanding Eurasian economic cooperation and integration. Regional activity for Afghanistan include the Asian Development Bank-facilitated Central Asia Regional Economic Cooperation (CAREC) program, the South Asia Association for Regional Cooperation (SAARC), the Shanghai Cooperation Organization (SCO), the Economic Cooperation Organization (ECO), the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), the Special Session of Regional Advisory Committee of the United Nations Program for the Economies of Central Asia (UNSPECA), the Organization for Security and Cooperation in Europe (OSCE). To increase cooperation and overall effectiveness on the organizations, both RECCA, and the Asia-Istanbul Process Platforms will enter in the strategic win-win alliances with each of this organization, as well as related initiatives, namely the Belt-and-Road Initiative, Middle Corridor Project, Silk Wind project, and New Silk Road initiative. Despite such efforts, less attention has been paid and Central Asia and South Asia remain two of the least integrated regions in the world. The low level of intra-regional trade within both Central Asia and South Asia has been an area of increasing focus in recent studies on these two regions.

Some new studies have recently focused on the potential of economic integration and inter-regional trade between Central Asia and South Asia concluding that such integration will provide huge economic gains for both regions. In this case, we can mention some successful performance as the regional cooperation and investment projects that are related to Afghanistan geostrategic locations, which include;the TAPI gas pipeline, CASA-1000, and TAP-500 in the energy area,CBAT and TIR convention, Special Economic Zones/ Multimodal Transport and Logistics Facilities, and Regional, Trade, Customs & Border Management Cooperation, in trade and transit facilitation and the belt and Road Initiative and Afghanistan, Lapis-Lazuli Transit, Trade & Transport Route Agreement, Chabahar International Transport, and Transit Corridor, Five Nations Railway Corridor, Afghanistan Rail Network, and Trans-Hindukush Road Connectivity Project, as transport networks projects.

Afghanistan has a good position to serve as a bridge, between Central Asia and South Asia, providing the shortest and most cost-effective way for roads, railways, pipelines, and electricity transmission lines between the two regions. However, there are numerous obstacles in realizing such a land-bridge role. Poor transportation infrastructure; cost-increasing trade barriers; security challenges in some areas of Afghanistan and Pakistan, as well as a lack of trust among some countries in the region, are among the most serious obstacles to this goal.

Developing economic cooperation between central, south, and southwest Asia is highly depended on their physical connectivity, and Afghanistan provides the shortest and cheapest routes between them. The potential for expansion of the energy market between Central Asia and South Asia is vast owing to the high degree of energy trade complementarity, between an energy-rich Central Asia and energy poor South Asia.

The three main regional cooperation programs in Afghanistan, including RECCA, the NSR initiative, and the Istanbul process, have been designed to help overcome such obstacles and recognize the potential of Afghanistan as a bridge between Central Asia and South Asia. While the Istanbul process can be used as a good logical mechanism for dealing with issues of peace, security and confidence building in the region, and the NSR initiative can help maintain the movement of the Afghanistan-centered Regional Cooperation, RECCA provides the best solution to use the potential role of Afghanistan in achieving economic integration between Central Asia and South Asia in the short and long term.

In order to accelerate the understanding of economic integrity between the two regions, various Afghanistan-centered regional cooperation efforts at different national, regional and international levels should be further coordinated. With increasing number of countries, as well as regional and international organizations attending RECCA meetings, RECCA can be the best solution for full enjoyment of Afghanistan’s geographic location in support of economic integration between Central Asia and South Asia. RECCA has the ability to become a coordinating organization that can complete all regional cooperation efforts in Afghanistan under one single umbrella. In order to guide and prepare the RECCA Development Guidelines, Afghanistan needs to strengthen the Center for Regional Cooperation at the Ministry of Foreign Affairs in Kabul, serving among other activities as the RECCA Secretariat.

In addition, the United States and Japan, as the two largest donors in Afghanistan, play an important role in promoting economic integration between Central Asia and South Asia through supporting Afghanistan-centered regional cooperation initiatives. The United States has already made many efforts behind the NSR, and Japan supports various regional programs, especially through financial support for CAREC programs. Both countries are well placed to support the economic integration between Central Asia and South Asia and continue to focus on RECCA as the best platform for this purpose.

Finally, it can be said that given Afghanistan unique geostrategic position between Central Asia and South Asia, this country is the only country that is member of all the regional economic cooperation frameworks in Central and South Asia. Based on the single-N studies we can conclude that Afghanistan has the potential to become the hub of Regional Economic Cooperation, significantly increase economic growth throughout the region.

Elnaaz Amini