A milestone has been reached in Afghanistan. For the first time in almost a century, Afghanistan’s regional trading network is up and running after the Soviet border split the region in 1917 and Afghan tradesmen are now trading with partners in all directions. Recent data from Afghanistan’s Central Statistics Organization (CSO) suggests that Afghanistan’s licit trade with the Central Asian republics is now surpassing trade with Pakistan and India. The U.S. State Department ingeniously reorganized itself already in 2005-2006 into a South and Central Asia Bureau to promote these ties. Reality has now caught up with bureaucratic administration, but the process of building further on it leaves much to be wanted.

BACKGROUND: Former U.S. national security adviser Zbigniew Brzezinski once labeled the South and Central Asia region as an “arc of crisis”. Seeking to transform this prevailing dystopic vision, former Secretary of State Condoleezza Rice in 2005 launched a campaign to reconnect the two regions into an “arc of opportunity”. It was anticipated that investments into Afghanistan’s road network, bridges, and cross-border connections with the former Soviet Central Asian republics in the north held greater prospects than any other of fuelling regional and continental trade. Trade, it was believed, could provide Afghanistan with the lifeblood and economic growth it needs to stand on its own and, hence, survive as a state.

By the time of the implementation of Rice’s strategy, Afghanistan’s trade volumes with its northern neighbors in Central Asia were close to zero. Infrastructural links to the former Soviet lands were few and far between, forcing Afghanistan to rely almost exclusively on Pakistan for trade and transit. Given the entrenched nature of these ties, skeptic participants at a 2006 Kabul Conference on transport and trade in greater Central Asia scoffed at the potential of reviving the dormant links with former Soviet Central Asia. “They no longer know each other, and they don’t want to”, said one participant.

This is now not only happening, it is exceeding even the most optimistic prognoses. In 2009/2010, Afghanistan’s total trade with the Central Asian Republics amounted to US$ 1,244 million, China and Japan US$ 697 million, and the rest of the South Asian region US$ 681 million, according to Afghanistan’s CSO. Broken down by country, the total trade volume between Kazakhstan and Afghanistan has grown from US$ 74 million in 2007/2008 to US$ 165 million in 2008/2009, to top US$ 291 million in 2009/2010 (US$ 364 million according to Kazakh statistics), almost all of which are made up of Kazakh exports to Afghanistan. Up until 2005 these volumes often did not exceed US$ 20 million.

Still stronger trading ties are being built with Uzbekistan. For much of the 2000s Afghanistan-Uzbekistan trade did not even enter into the statistics. Now, Afghan imports from Uzbekistan exceed US$ 876 million, up from US$ 167 million in 2007/2008 and figures below US$ 100 million prior to that. Meanwhile, imports from Pakistan have decreased over the past three years from US$ 431 million in 2007/2008 to US$ 308 million in 2009/2010, which is about equal to imports from China, reaching US$ 360 million in 2009/2010. True, Afghanistan’s exports are still heavily directed toward Pakistani markets and from 2005 to 2010 the value of this trade has remained in the bracket between US$ 200 million and US$ 300 million.

Critics may raise two potential objections to these new data. A first objection is that the abovementioned figures do not include shuttle trade, which IMF figures do. When shuttle trade is included, Afghanistan’s trade with Pakistan reached a whopping US$ 1.9 billion in 2009, which is significantly higher than the CSO’s statistics. While such trade is surely important for the Afghan population it does not bring income to the government. It also obscures the licit trade and transit that is being developed between Afghanistan and its neighbors. In any case, trade with Central Asia is rapidly approaching even the high level of US$ 1.9 billion.

A second potential objection is that these new trading dynamics are merely epiphenomena of the opening of the so-called Northern Distribution Network (NDN), supplying U.S. and NATO troops with materiel through Central Asia, in 2009. Critics should have in mind that even in 2008/2009 – prior to the opening of NDN – total trade with the CARs amounted to US$ 747 million and in 2007/2008 to US$ 300 million. Even if parts of the current trade may be connected to NDN there are clearly other dynamics at work unrelated to the transit of war supplies. In short, it is unmistakable that U.S. strategy works.

IMPLICATIONS: Several implications are to be derived from this development. At the most basic level, expanding trading ties and decreasing transportation costs imply that more goods become tradable, bringing cheaper and more diverse products to Afghans. Sizeable customs revenues also accrue the Afghan government as customs duties in 2009/2010 made up around 3 percent of GDP, equaling an income of at least US$ 400 million. What is the U.S. government’s response to these recent successes? The truth is that the regional dimension seems to have vanished altogether. For example, the Obama administration left out the entire sphere of economic development and regional trade from the White House’s 2010 Afghanistan Policy Review.

To put policy back on track, three steps are called for. First, the regional trading network is up and running but Afghanistan currently has little export capacity, and the U.S. must promote it. Building on Afghanistan’s export potential in natural resources is the way forward. As Afghanistan develops its vast energy and mineral resources, valued at US$ 1 trillion by audits, export markets are available in China, India, and elsewhere with transit available via the Central Asian republics and Afghanistan’s southern neighbors. This is the only policy with any realistic chances of bringing the government of Afghanistan the income stream needed to cover its budget deficits and to afford the military and police now being trained.

Second, the U.S. must emphasize that its strategy for Afghanistan is regional in scope and dust off the strategy of 2005-2006. Landlocked Afghanistan has been suffocated in the absence of regional trade, which is now reemerging. Afghanistan’s success depends on events beyond its borders and the active promotion of the synergies which exist at the regional level. Much of this is already happening bilaterally but U.S. coordination is called for since there is no other neutral broker with sufficient power and resources to play this role. In principle, this is no different from U.S. leadership in post-World War II Europe – and the lack thereof in the interwar period. Regional countries are expecting a storekeeper willing to provide the collective leadership required. Once such coordination has been set up among regional countries, and the countries involved realize the value of it, they will, just like the European countries, have a vested interest in maintaining it on their own.

Third, the U.S. government should undertake a public relations campaign to announce this milestone in relevant information outlets and give due recognition to all the Afghans, Americans, Japanese, and others who have helped restore this millennia-old trading zone. The sunk costs in this network have already been paid and there is no sensible reason why the U.S. government should diminish its accomplishments. At a minimum they testify to the U.S. engagement in Afghanistan being half-full rather than half-empty, and that a prosperous Afghanistan is surely within reach.

CONCLUSIONS: The U.S. has just achieved its first real strategic success in Afghanistan but the present administration is yet to acknowledge it, let alone act on it. To inject further fuel into regional trade, the U.S. must not stand idly by but promote Afghan mining and export of natural resources. This should be complemented by U.S. leadership on a regional level similar to what was required to assemble the belligerent European countries after World War II.

Winston Churchill once said, “A lie gets halfway around the world before the truth has a chance to get its pants on”. This is, perhaps, more relevant for the U.S. in Afghanistan than ever. The U.S. is suffering from a recognition deficit in Afghanistan and lacks goodwill ammunition against Koran burnings and other uncontrollable setbacks. The U.S. role in restoring the greatest pride of Afghanistan, its trading culture and pivotal position on the ancient Silk Roads, is perhaps a good place to start. This would give more credibility to U.S. efforts and administrative reorganizations, reify its role as a champion of this innovative thinking, and strengthen its place among Afghans as the visionary country we know.

AUTHOR’S BIO: Nicklas Norling is a PhD Candidate at Johns Hopkins University’s School of Advanced International Studies, and a Nonresident Research Fellow with the Central Asia-Caucasus Institute & Silk Road Studies Program Joint Center. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. .