Opinion

Afghanistan Crisis and Economic Imperatives for India

Its a bit of reminder that despite the fact that Afghanistan has taken a step for positive relation, the lurking threat isn’t a denial.

Afghanistan, a war-torn nation, finds itself in a humanitarian crisis following the quick occupation of the nation’s territories by the Taliban after the US committed in the historic Doha peace agreement signed in Feb 2020 to remove all its troops by May 2021 (revised to 9/11 of the same year following increasing tensions between Taliban and Afghan forces).

Given that the humanitarian crisis falls in the time of another crisis, the Covid19 pandemic, the response of various nations has been hesitant and diplomatic, with positions being stated in the context of the latest developments.

India, though committed to its anti-terrorism stance, advocating the protection of human rights, as reiterated at Doha Conference on Afghanistan a few weeks ago, needs to act proactively on the diplomatic front in these fragile circumstances, not only because of its proximity to the nation but also because of its larger economic and international security interest involved.

Preventing collusion through diplomatic ties

India’s economic relations with the Taliban must depend upon how China reacts to the post-crisis situation in Afghanistan.

Afghanistan

Afghanistan’s economy has been fragile, undiversified, with growth remaining modest at around 2.5% of the GDP over 2014-19, with a contraction of 1.9% during the Covid pandemic.

Most of this growth has been driven by foreign aid, which has been decreasing over time. Aid flows decreased from around 100% of GDP in 2009 to 42.9 %of GDP in 2020.

At the Geneva conference in Nov 2020, donors renewed their commitment to aid support, but mostly they were single-year pledges, with future support made conditional upon targets, and hence aid support is expected to decline by 20% from the previous pledging period.

Plus following the crisis, aid flows are expected to decline below the current 22% of GDP, as is evident by the statement of German foreign minister Heike Maas,” We will not give another cent if the Taliban takes over the country and imposes Sharia law.”

Added to this is the resource endowment of the nation, with an abundance of lithium, cobalt, copper, coal, and iron ore, which the difficult business environment has not been able to exploit.

With private credit just 3% of GDP, weak competitiveness, structural trade deficit(30%of GDP), domestic private investment is not expected to take up. This sets the field for Chinese entry, with the objectives of exploiting resources and expanding the BRI network through debt diplomacy.

China has shown keen interest in the past, with contracts to develop operations in copper and oil, and as the international community isolates Afghanistan on an economic front, China will be ready to collude with the Taliban.

This would mean a northern front of Pakistan (CPEC), Afghanistan, and China which will be a threat to the economic and security environment of India. Hence such a collision should be prevented at any cost. India must try to bring the Taliban into conditionalities and make Afghanistan act as a buffer if possible.

How to bring about these conditionalities? CRICKET

India has been a big development partner of Afghanistan since 2014, and especially on the front of cricket it has given enormous aid to uplift Afghanistan from an associate to a Test-playing nation, now with the ability to stroke major upsets in World leagues.

Given that the Taliban itself has been supportive of cricket, with cricket proliferating under its domain in 1996, and with ACB chief Shinwari showing optimism, India needs to push through this particular support and get the Taliban to sign conditionalities about diplomatic and humanitarian fronts.

Cricket is a festival in Afghanistan, which will provide popular support to cricket diplomacy in world spheres. India must proactively push against collusion on international spheres, in whatever capacity it has.

Push through to ensure the functionality of the Chabahar port.

Chabahar port must be analyzed as diplomatic connectivity between India, Iran, Afghanistan, and the US. It is to be noted that albeit tensions between US and Iran were on, the US allowed the construction of the road through Afghanistan for development purposes.

The port acts as a strategic linkage between India and Central Asia bypassing Pakistan. Of late, the port functionality has been under headwinds owing to US sanctions on Iran, which have not allowed the completion of RMQC(rail-mounted quay cranes). Even though Chabahar has been excluded from sanctions, potential crane manufacturers are not fully convinced.

A better diplomatic environment and proactive talks are needed to ensure the functionality of this port, and this needs to be pushed through quickly.

Refugee policy

Refugees are expected to flow in India owing to the Taliban takeover, but India lacks a well-defined refugee policy. Neither is it a party to the UN 1951 convention, nor its 1967 protocol nor does it have a well-structured domestic refugee policy. Refugees have placed and will place increasing economic and social burden, and thus limits need to be decided on their number and how to manage them.

 

The imminent need for increased defense expenditures

With the political environment expected to become even more hostile, India might find itself, hostage, to the power game, and hence there is the need to increase defense expenditure to at least 2.5% of the GDP in the medium term. The focus on capital expenditure needs to be there, and increased involvement of the private sector is more than welcome. Letting off lesser needed assets like Army dairy farms is a welcome step, but more needs to be done in a short period.

India needs to adopt an active rather than passive approach in the Afghan matter because its interest in the medium term is deeply interconnected with the developments in The Graveyard of Empires.

edited and proofread by nikita sharma

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button