Indo-Afghan relations grew stronger as India’s prime minister, Narendra Modi, traveled to Afghanistan on June 3rd to inaugurate the Afghan-Indian Friendship Dam. The 42 megawatt hydroelectric dam is the result of a $273 million investment by the Indian Government to promote agriculture in Afghanistan’s Herat province. It is estimated that the dam will be able to soon irrigate 75,000 hectares of farmland.
Construction of the dam, originally named Salma Dam, had actually begun in 1976, but was halted when the Soviets occupied Afghanistan in 1979. The rebellion against Soviet occupation and the subsequent civil war greatly damaged the dam’s infrastructure. However, after the overthrow of the Taliban, India renewed its commitment to building the dam. Thus, although forty years after initially starting, construction of the dam is now complete.
The inauguration of the dam is only one of many recent steps towards stronger Indo-Afghan economic and political relations. Recently, the two powers – along with Iran – signed a regional corridor trade agreement. The key feature of the agreement is India’s pledge to finance the development of the Chabahar port, Iran’s only port with direct access to the ocean. In return, Iran agrees to a sea-land trade route to India via Afghanistan’s road networks.
While appearing only to be a link in the route, Afghanistan will gain a significant opportunity. As a landlocked country, Afghanistan has had very limited opportunities for importing and exporting goods. In order to use maritime routes, Afghanistan has had to send and receive goods through Pakistan, a process many Afghan merchants have founding difficult due to the high duties the Pakistani state charges them. The revamped sea-land route from Iran will give the traditional Pakistani route more competition and likely lower the trade duties to which Afghan merchants have been subjected. Yet, while this closer Indo-Afghan relationship yields many economic benefits, it will also likely produce many political consequences, especially in terms of Afghan-Pakistani relations.
The two neighbors have had a complicated history from the time Pakistan became an independent state in 1947. They have persistently advanced rival claims over the territories colloquially known as Pashtunistan, which currently form part of Pakistan, yet are inhabited by a majority ethnic Afghan population. However, tensions between the two countries only escalated when Afghanistan became a communist state and a staunch ally of the Soviet Union in 1978. When Daud Khan, notorious for pushing the Pashtunistan issue, became president in Afghanistan in 1973, Pakistan began supporting Afghan rebel groups like the Mujahideen. Pakistan was just as opposed to the communist regime that ousted Khan and continued to arm the Mujahideen with the help of the CIA. The Mujahideen victory in 1992 would appear to have been a harbinger of a future Afghan-Pakistani friendship. However, the ensuing civil war in Afghanistan created insecurity for Pakistani imports and exports with Central Asia. Pakistan initially aided Gulbuddin Hekmatyar’s Hezb-i-Islami during the civil war before throwing their support behind the newly form Taliban.
Afghan-Pakistani Relations in Era of the Taliban
The Taliban succeeded in taking over most of the country and as a result Afghanistan and Pakistan had better relations than ever. However, the Taliban’s prohibitions on entertainment, treatment of women, and harsh punishments were condemned by the United States and other nations (despite being akin to the same measures taken by the Mujahideen). The Taliban were only recognized as a legitimate government by three states, of which Pakistan was the only neighbor. Consequently, Afghanistan had a profound political and economic dependence on Pakistan during Taliban rule (1996-2001). The dependence was a boon for Pakistan’s economy. As Afghanistan lacked manufacturing and education, Pakistan became the source of most manufactured goods and specialists in the country. Pakistan was also practically the sole financier of the Afghan government and the chief foreign investor in Afghanistan.
The lack of international recognition for the Taliban regime and the persistent rebellion by Mujahideen groups discouraged most countries from having economic dealings with Afghanistan, thus leaving Pakistan with little competition. A New Jersey company (Telephone Systems International) managed to get a mobile communications deal with the Taliban. Additionally, some U.S. companies attempted to get the rights to build a natural gas pipeline through Afghanistan, yet the plan was abandoned after attacks on the U.S. embassies in East Africa.
The Taliban’s Collapse and Pakistan’s Trade Ambitions
The situation has vastly changed since the United States occupied the country in 2001. Pakistan still remains an economic heavyweight in Afghanistan, but it has more competition than ever. Foreign investment dramatically increased after the Taliban were expelled; China has been one of the biggest players in this respect. Their companies have secured significant extraction rights to Afghanistan’s untapped mineral resources, such as copper mines at Mes Aynak. There has also been a boom of Chinese goods in Afghan markets. Indian goods have also been making extensive headway and are challenging their Pakistani counterparts.
These setbacks to Pakistani economic interests in Afghanistan only increased the deepening political wedge that existed between Pakistan and Afghanistan since the Taliban were removed. Although Pakistan aided U.S. military efforts to oust the Taliban, most of the Afghans that took power afterwards were members of the Mujahideen parties who felt betrayed by Pakistan’s support of the Taliban in the 1990s.
The animosity between the two governments has not subsided and has been a continued incentive for Pakistan to give refuge to Taliban insurgents inside Pakistan’s border. By not interfering with the Taliban’s cross border attacks into Afghanistan, Pakistan puts pressure on the Afghanistan to restore some of the economic advantages Pakistan had when the Taliban ruled. The use of such a tactic speaks to how valuable Afghan markets are to Pakistan.
As a developing country, Pakistan struggles to advance its manufacturing capabilities to the level of its neighbors: China and India. Thus, having exclusive rights to a neighboring market with limited manufacturing such as Afghanistan is an incredible opportunity. Having that opportunity once in the 1990s, Pakistan is eager to have at least some of it back. Compared to China and India, Pakistan’s trading network is much more limited and thus Afghanistan matters much more to it. Thus, while Pakistan was heavily involved during the Afghan civil war of the 1990s, India and China were mostly aloof. Iran’s involvement was also minimal, largely limited to aiding Shia militant groups who sought to carve out a space of power for themselves rather than to control the country.
The recent border skirmish between Pakistani and Afghan troops at Torkham shows that the divide between the two states is only growing and could increase once the U.S. leaves Afghanistan. However, while border skirmishes are a clear sign of tension, we should not overlook the role trade agreements and foreign investment play in creating these tensions. It is trade agreements between India and Afghanistan that greatly worry Pakistan. Until Afghanistan and Pakistan can find some way to resolve their troubled past and figure out an economic relationship that works for both, tensions will remain high and border violence will likely continue.
Elham Bakhtary is a PhD candidate in the History Department at George Washington University. He is a recipient of a Sigur Center 2016 summer research grant and is currently researching the reign of Afghanistan’s Amir Sher Ali Khan.
