Federal State Autonomous Educational Institution of Higher Professional Education
NATIONAL RESEARCH UNIVERSITY «HIGHER SCHOOL OF ECONOMICS»
Table of contents
1. The theoretical framework of the study..………….…………...……………..8
1.1 Neoliberalism as the conceptual foundation………………………………...8
1.2 Advantages and limitations of neoliberalism in the study case………...…12
2. Integration and infrastructure projects involving Afghanistan...................16
2.1 SAARC: History of creation and key problems of cooperation…...……..16
2.2 One Belt One Road : opportunities and risks for Afghanistan…..…..…..23
2.3 Afghanistan as a crossing knot of interests of regional and extra-regional actors……………….…………..………………………………………………...33
3. Security issues as the main challenge for the socio-economic development of Afghanistan.………………………………….......................................................51
3.1 General characteristics of the security challenges in Afghanistan ….…....51
3.2 China’s interest in Afghanistan………..…........……………………………58
3.3 Russia, the U.S. and the Afghan agenda........................................................61
Over the past decades, Afghanistan has been repeatedly portrayed as a dangerous, war-thorn country by the media. The war between the Mujahedeen and the Soviet army (1979-1989), the U.S. war and intervention in Afghanistan (2001-2017) and the Taliban presence since 1996 have had a huge impact on Afghanistan’s overall condition. However, there is much hope that the coming ten years will be optimistic times. On the 31st of October, 2018, the World Bank published its “Doing Business 2019” report, In this annual report that measures business regulations in 190 countries, it was declared that Afghanistan reached the top 10 list of improvers in doing business alongside Azerbaijan, China, Djibouti and India. Afghanistan climbed 16 positions in the rankings from 2018, advancing from the 183rd place to the 167th place and showed absolutely remarkable improvement in four of the ten indicators measured namely: Protecting Minority Investors (26th), Starting a Business (47th), Resolving Insolvency (74th) and Getting Credit (99th).  These statistics are encouraging, however they show there is still a lot of room for improvement. Ongoing hostilities have severely hampered any efforts in the past when it comes to initiatives in the field of mining, trading and transnational cooperating and have led to events such as the total cut off of the natural gas export. By the mid-1990’s there was little mineral, oil and gas extraction even though Afghanistan is recognized for its richness in resources. Though its prolificacy in resources could be considered an advantage, it has made the territory a scene for international conflicts and violence, a playground for foreign powers to fight out their disagreements and for their own interest.
Afghanistan has not only the benefit of being rich in resources. Being a landlocked country, Afghanistan is strategically favored by its geography as it can be considered part of both South-Asia and Central-Asia, and is often included in the Middle-East landscape. Therefore, the country is not only rich in resources, but also in offering access to many markets; Afghanistan is an economic corridor and shortcut for natural resources between South and Central Asia. This fact has not been overlooked and many regional actors are willing to be a part -mainly financially- in the reconstruction of Afghanistan to gain access to the large variety of markets Afghanistan can open doors to.
The object matter of the study is the Central and South Asian transnational infrastructure projects in Afghanistan and the subject is their development potential on a national and regional level as well as the challenges it imposes to Afghanistan, regional and extra-regional actors.
The aim of the study is to gain a deeper understanding of the dynamic between Afghanistan and South and Central Asian regional partnerships that are being formed within the framework of transnational infrastructure projects.
To achieve this aim, the research has the following five objectives:
The chronological framework of the study covers the period from 2007 to the present. This choice is due to the fact that in 2007, Afghanistan became a member of SAARC [South Asian Association for Regional Cooperation], a regional integration unit that proposed the development of cross-border infrastructure projects as one of the areas of cooperation.
The hypothesis of the study is that Afghanistan find itself in a position where it has to choose the right balance between self-sufficiency and cooperation. The country has been ground for foreign disputes and foreign interests, the consequence being economic stagnation and growing security issues. An increase in economic development of Afghanistan could incite many changes in the region as it could provide for its resource-lacking neighbor, Pakistan, which could tone down India vis-à-vis China. As for Afghanistan’s involvement with Beijing’s project of going global, it could give the once war-thorn country the status of a transition-country and all the benefits that this status carries with it. The more Afghanistan diversifies its cooperation and the more it takes its serious security issue at hand, the more one can expect to see Afghanistan’s economy grow over the coming decades, bringing an overall improvement in the quality of life of Afghans. Afghanistan could eventually become a very important regional key player in the global system.
The theoretical basis of the study uses the perspective of neoliberalism in the context of international relations, as the importance of the structure in the international system cannot be overlooked considering how it influences actors from different spheres (politics, finance, governmental organizations and non-governmental organizations, etc.) in international relations. In the analysis of bilateral and multilateral relations, the paradigm of the structure presents concepts of neoliberalism complex interdependence, transnationalism, vulnerability and sensitivity. The study uses the works of neoliberals J. Nye and R. Keohane as well as from opposing neorealist J. Mearsheimer.
Sources of research are wide and diverse. A wide range of data from various sources has been used during the research of this subject. The primary sources for the research can be organized as follows:
Literature review. The study conducted is based on a narrow spectrum of academic publication works, as the topic has not been under a close consideration.
Russian authors are A. Kazantsev, M. Konarovsky; A. Kupryanov, I. Safranchuk, etc. Authors who wrote in English are Angela Stanzel; Dmitry Suslov; Ian Dudgeon; Jonathan E. Hillman; Kenneth Katzman; Suzanne Levi-Sanchez; Zia Ur Rehman,etc. During the preparation of the theoretical part of the research were used the works of J. Nye and R. Keohane. The publications used are from Russian and foreign specialized research centers such as the Higher School of Economics, the European Council on Foreign Relations, the University of Central Asia, and foreign publications specializing in world and regional politics, such as Foreign Affairs, The Diplomat, etc.
Academic novelty of the research. The research of this study has created a comprehensive picture of the current situation in Afghanistan and the possible changes that transnational infrastructure projects from Central and South Asia could mean for the country and the region, both on the short-term and the long-term;
It is a contemporary research, covering 2007 until the present, on regional interconnectivity between Central Asia and South Asia, with Afghanistan at the very heart of it;
It introduces an amount of valuable sources into the scientific circulation;
By using the perspective of neoliberalism as an analytic tool, previous researches are brought more descriptive characters to the research.
Practical implication. Currently, the Russian Federation is building a system of relations with its allies and partners. This study can be used by Russian interested departments, as well as analytical offices of international organizations to which Russia is a party (Collective Security Treaty Organization, Shanghai Cooperation Organization, etc.). The main provisions of the work can also be used for educational courses, programs and manuals on the latest history and international relations.
 Malik, Y. Geo-political Significance of the Wakhan Corridor for China. //Research Gate. June 2014. [Electronic resource]. URL: https://www.researchgate.net/publication/271911374_Geopolitical_Significance_of_the_Wakhan_Corridor_for_China (Date of access: 10.03.2019)
 Doing Business 2019 report // The World Bank. 1 May 2018.[Electronic resource]. URL: http://www.worldbank.org/content/dam/doingBusiness/media/Annual-Reports/English/DB2019-report_web-version.pdf (Date of access: 15.12.2018)
 Majidyar, A. W. Afghanistan Declared a Top Improver in 2019 Doing Business Ranking. // The Diplomat. 7 November 2018.[Electronic resource]. URL: https://thediplomat.com/2018/11/afghanistan-declared-a-top-improver-in-2019-doing-business-ranking/ (Date of access: 28.12.2018)
South-Asian and Central-Asian infrastructural projects in Afghanistan are about much more than improving Afghan infrastructure. Afghanistan has its fair share of benefits and gains from these projects. Nonetheless, this mostly depends of internal factors and Afghanistan’s efforts on coping with its own security issues such as corruption, terrorism, narco-trafficking and other issues that have been discussed in this research. The way Afghanistan will develop, will unavoidably have a large impact on the regional political climate and eventually exercise an important influence on matters such as the Pakistan-India conflict, Uzbekistan’s ambitions on becoming a regional leader, Turkmenistan’s political and economic isolation, the Middle East’s access to the European market, China’s BRI, CPEC and altogether relations with Pakistan as well as Russia and the U.S.s role in Afghanistan and Central Asia. If Afghanistan does not wish to leave its future in the hand of foreign powers such as has been the case in the past, but neither wishes to close its doors to opportunities that could help the war-thorn country back on its feet, then it should be prepared to tackle its security issues effectively.
The current Afghan government should make security its priority so that ongoing investments are not lost. With such an exceptional richness in resources, the only thing holding foreign investors from investing in the region is the flagrant lack of security. Once Afghanistan becomes a safe territory for investments, there is no doubt the opportunities and economic growth will be abundant. To make the gains as beneficial as possible for Afghanistan itself, the economy should remain diversified. That is, not strictly related to, for instance, Beijing’s BRI or any other project or source of investment. It is very important that Afghanistan further stimulate trading with Central Asian countries and other South Asian countries to avoid unilaterality with China or India and encourage further regional economic development, interdependence and regional peace.
Neoliberalism in international relations has been an adequate guideline and effective foundation for this research. As this research has proven, the security issues and current economic state of Afghanistan do not only concern the Afghan government; its consequences are of regional scale. Therefore, regional actors and even extra-regional actors have openly demonstrated their wish to improve infrastructure in Afghanistan in the hope to encourage transnational and regional trade and interconnectivity. Nonetheless, it is understood that each state has its own interest and works towards its own needs. Therefore, Afghanistan’s future still very much depends on its own actions, how and until what measure it will accept foreign aid.
After targeting five key projects that involve Afghanistan, regional actors and extra-regional actors, the general common interest for regional connectivity and an eventual complex interconnectivity is encouraging to observe. There seems to be a strong common desire to connect to one another, strengthen economic ties and cooperate on issues that affect or could eventually affect the entire region.
Yet, a deeper look into these transnational infrastructural projects has also shown that each state involved has its own motives. Naturally, each state will only engage in activities that are at its own benefit and for the improvement of their own economy and security. It seems that many of these projects do indeed wish to stimulate interconnectivity, regretfully often by excluding a certain party or in reaction of the growing capacity of a certain state and the wish to contain it. Pakistan is worried about India’s influence on Afghanistan, India is worried about China’s influence and the increasingly strong ties between China and Pakistan, and China is not too fond either of seeing India strengthening ties with Afghanistan. As for Iran, it would rather not have the U.S. performing any economic activities nearby. The question that remains is whether the involved states will let their own interests and motives prevail over the interest of Afghanistan and the common regional interest. This is rather unpredictable and as a great number of variables are involved, it is a hardy task to make any predictions including what this could mean for Afghanistan. Undoubtedly, it depends of Afghanistan’s own attitude toward this unavoidable tendency: it will have to measure its degree of responsiveness within the policy framework of the projects it is involved with and measure the benefits it can receive from its involvement. Afghanistan should be aware of its vulnerability and the pressure that other states can apply on it within the framework of infrastructural projects. In other words, Afghanistan should change the process and the framework for it to suit their own needs for a long-term economic growth and regional political stability. The flexibility that Afghanistan will have or allow itself to take within the framework of infrastructural projects is how the long-term benefits of these projects to the country can be measured.
To ensure Afghanistan can truly enjoy from the benefits Central and South Asian infrastructural projects offer, there will be a need for drastic internal changes in the security sphere. If the country is not in measure to guarantee a minimum of security in the context of these projects, current investments will be lost and interest will wear off. Corruption, terrorism and drug-trafficking are crimes that are closely connected to one another. If there is corruption, there is no guarantee where investments are put into and how they are spent. As much can be said about terrorism, which additionally means there is no guarantee that transported stock arrives safely or complete. As for drug trafficking –an economic activity of which a great part finances terrorism- there is no care for having good railways and roads facilitating illicit and harmful activities that jeopardize regional security.
Beijing, for instance, wishes to cooperate with Afghanistan on security issues as these affect China directly. Though China has confirmed multiple times it does not wish to establish any physical military presence in Afghanistan and remains true to its non-interference policy, it remains in Afghanistan’s own interest to tackle the security issue from within. Foreign military presence has never shown itself to be a success in the country and China can, if it stays true to its non-interference policy, only offer support. As security issues are increasing, Afghanistan has every reason to act effectively and quickly if it wishes to engage in transnational infrastructural projects.
It is very unlikely that Afghanistan can count on any military aid from the U.S. in a near future. D. Trump has made no clear statement on this subject, but seems disinterested in engaging troops in Afghanistan. As for Russia, its traditional role of responsibility for security in Central Asia does not guarantee its implication with Afghanistan. It is even more unlikely to see any cooperation between Russia and the U.S. abroad and in Central Asia. Since the last U.S. elections, it is very unclear what the terms of agreement between the U.S. and Russia are within the post-soviet space. In addition, it would be a hardy task for Russia to increase its involvement in the region, as Saudi Arabia and Qatar tend to hinder Iran and Russia by financing ISIS and Al-Qaeda to extend Middle East conflicts to Central Asia. Therefore, Afghanistan cannot count on any military support from both the U.S. and Russia in a nearby future.
What can be deduced from this research is that Afghanistan needs to undergo many internal changes within its political and security sphere for the country to be truly ready and capable of benefitting from transnational infrastructure. The country must tackle terrorism and drug trafficking and corruption as one problem as these issue are strongly intertwined and heavily dependent of one another. If Afghanistan does not wish to become the territory of dispute of foreign powers, it needs a certain strength and stability that allows it to put its own terms at front and mold the framework of projects that occur within its own territory. If Afghanistan becomes once more a tool for foreign powers to achieve their own agenda, there are no long-term benefits for the country. Infrastructure requires safety and maintenance to be truly beneficial. This means Afghanistan needs important changes on the security level, and qualified expertise in the country to sustain the quality and effectiveness of road, railways and other infrastructure without relying on foreign aid in the future.
Complex interdependence is meant to create unbreakable relations between states. The interconnectivity implies that Afghanistan and regional actors should be connected in such a way that the destruction of those ties would be of severe damage to all states and therefore avoided at all costs. This would eventually create an ideal, balanced and peaceful political climate in Afghanistan, Central Asia and South Asia. Afghanistan remains at risk of being in a position of asymmetric interdependence, caused by its vulnerability and current incapacity to tackle its growing security issues that irrupt into different spheres and take worrying, unmeasurable proportions. Asymmetric interdependence will only cause more vulnerability, which consequently only can mean there is no such thing as interdependence in place.
Afghanistan is still a very vulnerable state. As long as it has not resolved its internal issues, foreign aid and transnational projects from foreign sources remain still foreign intervention to which Afghanistan is not the triumphant in the balance of power and persuasion. Therefore, extreme caution is needed when involving in transnational infrastructural projects.