Economic cooperation between Afghanistan and Pakistan could hold the key to peace

Economic cooperation between Afghanistan and Pakistan could hold the key to peace


Recent developments in Afghanistan offer a ray of hope for peace and reconciliation. The three-day cease-fire over Eid Al-Fitr between Afghan government forces and the Taliban indicates a willingness among the cadres of both sides to find unconventional ways to reconcile.

President Ashraf Ghani has made a bold move by offering to hold peace talks with no preconditions. He also seems willing to accept the presence of a genuinely impartial intermediary with whom both sides will be comfortable. He has also expressed a willingness to consider the possible release of prisoners who fought against the state, accept former militia members as Afghan citizens, and review the constitution if need be.

The thinking in Islamabad is that Pakistan can play a very limited role in bringing about peace in Afghanistan and helping to sustain it in future. The Pakistani government feels that there are multiple regional powers operating inside Afghanistan and, unfortunately, their interests do not converge. However, as is clear from his recent writings, Zalmay Khalilzad, a former American ambassador to Afghanistan and the US permanent representative to the United Nations, believes that Pakistan still holds the key to peace in Afghanistan.

It is against this backdrop that the recent visits of Pakistan’s prime minister and the chief of army staff to Afghanistan are so important. Both sides have agreed an “Afghanistan-Pakistan Action Plan for Peace and Solidarity” (APAPPS), which can be viewed as a confidence-building measure and, if sincere, resurrect various aspects of Afghanistan-Pakistan cooperation.

Under APAPPS both sides have agreed to: support the Afghan-led peace and reconciliation process; take action against those who pose a security threat in Afghanistan or Pakistan; prevent the use of their territory by any organization or individual for activities that could derail the peace process; avoid violations of each other’s territorial boundaries; avoid playing the blame game on contentious matters; use the APAPPS framework to respond to concerns; and set up working groups to move forward with the action plan towards full implementation. 

Regardless of the position on Afghanistan taken by regional and western powers, Pakistan should have a very clear, long-term policy of sustained cooperation, particularly in the economic and security spheres.

Dr. Vaqar Ahmed

One such working group, which offers immense potential to bring both countries together, will look at trade and investment cooperation between the two neighbors. This is often dubbed the “low-hanging fruit” because it is an area that is relatively easy to reach agreement about. Economic cooperation is much needed and can bring about sustainable development, create alternative livelihoods and generate jobs. Such aspects of economic cooperation are much less talked about, given that the security paradigm often takes over and dominates bilateral dialogue. The Afghanistan-Pakistan Joint Economic Commission has not met for several months. 

Only now has an economic working group (operating under APAPPS) been established, with the participation of the private sector on both sides. It is expected that this working group will now reimagine ways through which pending matters of economic cooperation can be expedited. These include, but are not limited to: revision of the Afghanistan-Pakistan Transit Trade Agreement; an overhaul of the customs-clearance system on both sides of the border; improvements to rail and road connectivity between the countries; finalization of a bilateral, preferential-trade agreement to boost trade in goods and services; setting up economic free zones for Pakistanis who want to invest in Afghanistan; a trilateral transit-trade agreement between Afghanistan, Pakistan and Tajikistan; an avoidance-of-double-taxation agreement; transboundary energy projects; and fixing a visa system that causes delays to travel by businesspersons, workers, patients and students.

In my recently published book, “Pakistan’s Agenda for Economic Reforms,” I argue that regardless of the position on Afghanistan taken by regional and western powers, Pakistan should have a very clear, long-term policy of sustained cooperation, particularly in the economic and security spheres. Pakistan must announce its long-term visions for relations between the neighbors and for peace in Afghanistan, and how this can bring dividends for Pakistan. The latter should also continue to assist the former in its developmental goals and help to move a vast segment of the Afghan workforce, often described as poppy-production-dependent, towards more productive activities.

Afghanistan in turn should view Pakistan as a key export market. Other than a slight dip in 2015, exports from the former to the latter have been increasing since 2010; during 2017 they grew by 67 percent on the back of robust demand in Pakistan for soap rock, coal and cotton. As the nascent manufacturing sector in Afghanistan has gained ground, Pakistan has also placed orders for electric-generating sets, compressed and liquefied gas, petroleum chemicals and cotton thread. The political leaderships in both countries now face the test of finding ways to move forward and seize this opportunity for peace in the region.

–  Dr. Vaqar Ahmed is joint executive director of the Sustainable Development Policy Institute in Pakistan. His book ‘Pakistan’s Agenda for Economic Reforms’ was recently published by the Oxford University Press. Twitter: @vaqarahmed

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