Breaking ground The mountains of Bamiyan province, site of an iron-ore mine to be built by an Indian consortium
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The prosperity would have ripple effects across the region, argues Shuja Nawaz, the Atlantic Council's South Asia director. The tighter the economic dependencies between nations, the less likely conflict would be, particularly in the case of Pakistan, which has historically used Afghanistan as a launchpad for proxy attacks against India. "Once Pakistan's business sector sees greater returns from trade than from using Afghanistan as a cockpit to fight for influence in the region, the post-2014 scenario becomes much more sustainable," Nawaz says. Such was the case with the countries across Southeast Asia that negotiated the ASEAN trade pact in 1967, which catapulted the region to decades of high growth. Conflicts among rival nations within that trade body occur, but they are typically resolved through dialogue and mediation rather than armed confrontation.
There are signs of hope: for instance, the 1,680-km Turkmenistan Afghanistan Pakistan India (TAPI) pipeline project, which will connect Turkmen gas fields with the energy-hungry populations of Pakistan and India. After two decades of setbacks and false starts, the four countries finally signed a deal on May 23, a step toward fulfilling Indian Prime Minister Manmohan Singh's oft-quoted dream of a day when "one can have breakfast in Amritsar, lunch in Lahore and dinner in Kabul."
The movable feast will take time. Chronic insecurity, poor governance, corruption and cronyism are still rife within the region. (Afghanistan, Uzbekistan and Turkmenistan scored fourth, fifth and sixth to last on Transparency International's corruption perception index last year; Kazakhstan, Pakistan and Tajikistan were not far ahead.) What's more, closer trade ties can complicate politics. Russia has used its export dominance over Eastern Europe for political leverage by shutting off gas and oil supplies to the region. "Trade can stop conflict, but it depends on the relationship. Maybe it sounds nicer than war because there are no bullets, but it can be used just as effectively as a weapon," says Peter Zeihan, vice president of analysis at Stratfor Global Intelligence.
Footing the Bill
In March, Afghanistan and neighbors India, Pakistan, China and Iran, among others, convened for a two-day conference in Dushanbe, Tajikistan, to draw up a shopping list of projects that would breathe life into the new Silk Road. Those include thousands of kilometers of rail and road construction, dam and hydro-electric projects, electrical-grid expansions and pipelines. Then there are cross-border economic zones, paperless customs proceedings and regional transit-transport agreements. The hardware alone would cost in the tens of billions of dollars. That's not much different from the average monthly expenditure of the U.S. and NATO in Afghanistan, which is why the plan's architects are pushing for a "transition dividend," whereby the countries that withdraw will commit some of those savings to building Afghanistan's trade future.
Still, it's a hard sell for international donors drained by a decade of support. The U.S. says it's tapped out and wants the private sector to swoop in. "This is not about the U.S. spending vast sums to get this going," says Marc Grossman, special envoy to Pakistan and Afghanistan. "This is about the U.S. opening people's minds to the possibilities." Energy giants like Chevron and ExxonMobil have expressed tentative interest, but costs are still in question. Official estimates for the Silk Road project, initially pegged at $7.6 billion, have nearly doubled since 2008. Stratfor's Zeihan estimates that the total could easily reach $40 billion, which includes security costs for building a pipeline through one of the most insurgent-racked areas of Afghanistan and the cost of steel and other scarce raw materials.
Of course, on the old Silk Road, the private sector covered everything from caravans to security. But traders rarely had to worry about the customs delays and prohibitive tariffs that plague regional trade today. In October 2010 the U.S. helped Pakistan and Afghanistan hammer out a far-reaching trade pact. But only months after it launched in July, disputes over tariff guarantees brought Afghan imports from outside Pakistan to a halt. Nasrullah Rahmati, a clothing manufacturer in Kabul who employs 600 women to sew uniforms for the Afghan military, has had to dramatically scale back production because $2.5 million worth of fabric has been held up for eight months at the Pakistani port of Karachi while the two countries work on a solution. An inadvertent attack on a Pakistani military post that killed 24 soldiers in November hasn't helped.
The unlikely fixer? Iran. The only reason Rahmati's business hasn't completely collapsed is that he found a Korean supplier who could ship through Iran, which has helped develop western Afghanistan's road network and is second only to Pakistan in terms of exports to Afghanistan. And yet the U.S. is doing "as much as it can to actively discourage that connection," says Neff of IHS Energy Group. If left out of regional trade negotiations, the long-standing U.S. foe could become a spoiler. "Iran is a neighbor, just like Pakistan," says Afghan Commerce Minister Anwar-ul-Haq Ahadi. "It's important that Afghanistan open all of its doors. We want to have options." If the U.S. is banking on trade-induced peace to secure Afghanistan, bullying its neighbors isn't likely to help. On the new Silk Road, the trickiest routes to navigate might just be the surest paths to peace.
— with reporting by Walid Fazly / Kabul