Last November when the U.S. unmanned drone killed 24 Pakistani soldiers, in retaliation, the government of Pakistan decided to block the supply routes to Afghanistan. Since then, not only NATO supply trucks have been stopped, but also thousands of Afghan-bound containers loaded with commercial goods have been stranded in the port city of Karachi. Each and every time commercial goods are grounded in Pakistan, Afghan businessmen are losing money and Afghan consumers are paying higher prices for goods that are imported through Pakistan. It seems like landlocked Afghanistan is highly dependent on trade roads from Pakistan. However, there are three alternative transit routes that the Afghan government can exploit to facilitate exports and imports.
First, the Afghan government can maintain the status quo. Pakistan will remain the major transit route into and out of Afghanistan. Business as usual, hundreds of trucks will camp out in Pakistan, when and if there is tension between Washington and Islamabad. As a result, the Afghan businessmen and household will ultimately bear the burden. In addition, there are major security concerns in this supply route from the Pakistan, which enters Afghanistan through the Khyber Pass. Militants always target cargo trucks near Torkham. In the last several years, we have seen an uprise in these attacks. This means Afghan businessmen will suffer huge losses, if similar attacks continue. This will also create unpredictable market behavior, which will result in inflation. If the status quo is retained, the Afghan economy will remain dependent on Pakistan, which could be used as leverage over Afghanistan.
The second option is the Northern Distribution Network (NDN) through Russia, the Caucuses, Kazakhstan, Uzbekistan and Tajikistan. The NDN is a network of road, rail, and air routes. In Afghanistan, Balkh province has a strategic position in the north as it has completed a rail link from Mazar-i-Sharif to Termez on the Uzbekistan border. These routes are far less dangerous than the supply routes that go through Pakistan. While the shorter Pakistani transit routes are less costly, the Northern Distribution Network is much more reliable. There are fewer custom issues, roads are paved, the rail system is steady, and freight delivery is guaranteed and on time. However, in order for Afghan businessmen to fully utilize this network, the Afghan government needs to sign a pact with several countries. The most important country in this network is Russia. The Afghan-Russian relationship has not been very good in the past few decades. Moscow wants to destabilize Afghanistan because this serves as a justification for Russian security and military engagement with Central Asian neighbors. Russia’s mixed interests and motivations in Afghanistan are a point of concern, as these two countries have bitter memories from the past Soviet invasion of 1979. The Northern Distribution Network is a feasible, but not an optimal option for the Afghan economy.
The third viable alternative trade route for Afghanistan is through Iran. Recent rounds of sanctions by the U.S. have pushed Iran’s economy into a nose-dive. As the European Union is adopting its sanctions on Iranian oil, Tehran is very vulnerable. It is turning eastward for doing business. The Afghan government could exploit Iran’s desperation, and sign a deal for access to the Iranian port of Chabahar. It is a port outside the Persian Gulf, and about 1,700 Kilometers away from the major western Afghan city of Herat. Unlike Pakistan, Iran in recent years has encouraged Afghan businesses to relocate their international offices from the United Arab Emirates, Saudi Arabia, and Pakistan to Iran. While ports of Karachi in Pakistan are overburdened with severe congestion, and lack infrastructure, Chabahar is less crowded, and strategically well positioned for Afghan imports and exports. Iran and India are building a highway and a railroad system that leads from the port into Afghanistan. The Iranian trade route is very cost effective and short distanced, as compared to that of Pakistan. In addition, this route is less dangerous and very reliable. However, with one caveat, Iran’s foreign policy has proven to be focused on thwarting U.S. interests in Afghanistan. Tehran might use the economic ties with Afghanistan as a tool to hurt U.S. interests in the region, which might upset the U.S.-Afghan relationship. By and large, this is the most viable and optimal option for the Afghan economy as a whole.
All in all, because of Afghanistan’s landlocked location, its economy hugely depends on neighboring countries for transiting goods into and out of Afghanistan. The choice is between Pakistan, Northern Distribution Network, and Iran. However, in order to alleviate Afghan dependence on the Pakistani port of Karachi, Iran’s Chabahar port is the most cost effective, secure, and reliable trade route for the Afghan economy.