Dialogue January-March, 2012, Volume 13 No. 3
Afghanistan - The View from Raisina Hill
When the rulers of British India decided in 1911 to shift their capital from Calcutta in the east to Delhi in the north, they chose a low hill as the centre of the new capital. The grand sandstone buildings that were built atop the hill had imposing walls, colossal domes and a string of sentinel points marked by stone chhatris. From here, British India’s rulers could watch over the hot, dusty plains of north India. Their constant gaze was on their northwest frontiers bordering Afghanistan. This was one reason why they had shifted the capital.
For, it was from the northwest that the gravest threat to India had traditionally come. For centuries, Turkic and Afghan hordes had thundered down the plains of India, plundering, looting and at times establishing savage kingdoms. The tide of the Afghans had ebbed but a new threat had appeared when the Russians rode into Central Asia. How that Great Game was played out has long become part of strategic lore, but New Delhi’s gaze even a century later remains fixated in the same direction – towards the northwest.
Now as a new chapter opens in Afghanistan on the eve of 2012 with United States initiating its inevitable departure from that country, Indian policy makers ensconced in the same building where British strategists once controlled their distant frontiers are stirring in renewed concern. For, the US military has held Afghanistan for more than a decade, scattered the forces of the extremist Taliban and kept Pakistan’s ambitions at bay. Kabul and the other major cities of Afghanistan, despite occasional terrorist attacks, have been secured and the international community has been able to operate in that country with relative freedom. India, including a host of other countries and multilateral institutions, have been able to carry out much needed economic development programmes. Education and the beginnings of a democratic system have begun changing traditional Afghan mindsets. A process of recovery and national consolidation is in progress. All that could now change.
India as a status quo-ist power seeks to maintain regional balances and the integrity of nations in its larger environment. On the other hand, Pakistan’s constant quest to alter regional equilibrium, its desire to gain territory in Kashmir and exert its supremacy over Afghanistan, and perhaps thereafter over other Central Asian states, is an anathema to India.
Equally worrisome for New Delhi is Islamabad’s policy of using jihadi groups and political Islam as instruments of its foreign policy. The Pakistan Army’s cynical use of jihadi elements has both radicalised the region and has bred a generation of radical Muslims in Pakistan who harbour existential hatred against India. The Pakistani establishment has used its perverse creations to organise a series of terrorist strikes against India, including the Mumbai massacres of 26 November 2008.
Afghanistan has served as a terrorist crucible and safe backyard for Pakistan’s military establishment, which it had used for training and consolidating terrorists during the Taliban years. The extremist jihadi regime in Afghanistan directly threatened Indian security and regional interests, facilitated terrorism against Indian targets and provided fuel to the Kashmir insurgency. Not surprisingly, even Indian diplomats were not welcome in Kabul during the Taliban period.
New Delhi fears the return of the Taliban or a similar anti-India regime controlled by Pakistan to further de-stabilise the region and mount terrorist attacks against India. New Delhi has a number of secondary objectives in Afghanistan, including the use of its road network to reach Central Asia, gain access to some of that country’s natural resources like iron ore and develop mutually beneficial trade relations.
Islamabad is the problem; it wishes to deny any Indian influence in Afghanistan and is willing to use every means to keep Indians out from that country. This dangerous rivalry will continue as long as Islamabad has the means to perpetuate violence and use non-governmental actors to carry out its agenda. Because of geographical and other considerations, New Delhi is not in a position to counter any physical offensive by Pakistan and its jihadi assets. Therefore, New Delhi must rely either on a continued US military presence in Afghanistan or else hope that the country’s nascent national army and police will be able to hold out against the enemies of the regime.
Indian aid started flowing into Afghanistan within weeks of the embassy reopening in 2001 and over the years this assistance has grown to nearly US $ 2 billion, making India one of the top aid donors to that country.
India has built a strategic highway linking south western Afghanistan with Iran, built an electricity transmission line from the north across the Hindu Kush Mountains to Kabul, provided food aid, built a hydroelectric project, set up training facilities, offered thousands of scholarships, donated buses and airliners, and is building the country’s new parliament building. Indian assistance has angered Pakistan, which has openly voiced its opposition to the Indian presence in Afghanistan. The Taliban has consistently targeted Indians, killing construction workers, bombing the embassy and carrying out an attack on a Kabul guest house popular with Indians. Despite the attacks and assassinations, India has not been deterred.
Much of this has been possible due to the US led military presence in Afghanistan. Despite, its many failures, NATO has brought a large degree of peace to most parts of Afghanistan, especially in the cities where state institutions are gradually being rebuilt. Western assistance has helped millions of Afghans make a better life.
The problem is that Afghanistan remains a fractured polity with competing ethnic, tribal and sectarian interests. Parliamentary democracy has not as yet been able to bind the country together. NATO has also been raising an Afghan Army and armed police force, both of which remain too weak to resist a combined Taliban-Pakistan attack. Besides, the so-called Afghan National Army (ANA) is not really a truly nationalistic force with recruits drawn mostly from non-Pashtun areas.
Many South Asia watchers, former US Ambassador to India Robert Blackwill included, believe that once US forces leave, the ANA and the Kabul appointed governors of the provinces will not be able to put up any real resistance, thus allowing the Taliban to sweep across the Pashtun dominated parts of eastern and southern Afghanistan. This prospect deeply disturbs most strategists in New Delhi.
New Delhi casting anxious glances towards its northwest has been urging Washington to delay its departure from Afghanistan, arguing that a sudden exodus would lead to a regime collapse in Kabul and all the work of the past decade would be undone in a moment. Moreover, many Indian strategists genuinely believe that the US will not entirely abandon Afghanistan even after 2014 and would retain a smaller force and a few highly secure airbases from where they could carry out attacks against rebel camps, terrorist hideouts and so on. Their hope stems from President Obama’s decision to sanction US $ 1.3 billion in additional war funds for the construction and expansion of military facilities in Afghanistan during the 2011 financial year. It was reported that at least US $ 100 million was earmarked for the expansion of three air bases at Shindand, Mazar-e-Sharif and Camp Dwyer. These bases could be protected by small contingents of US forces along with ANA elements. Kabul and Bagram air base could constitute the centre of this strategic spread. Overwhelming air power could be used to disrupt and destroy significant concentration of Taliban forces and interfere with their offensives. This would obviate any possibility of them overrunning all of the country.
Optimists in New Delhi believe that the Afghan National Army supported by US air power, artillery and diplomacy could stave off a Taliban victory. Without Pakistan supported air power or artillery, the Taliban would not be able to apply the kind of military pressure on opponents as they did in the 1990s. Moreover, the optimists argue that previously the Taliban overran most of the country without having to fight because most key warlords and local leaders capitulated, not having any inkling of how vicious the victors would turn out to be. This time, given the modicum of deterrence continued US military presence in the country would provide, provincial leaders and militias might not give in so easily, especially if they have worked out acceptable political deals with Kabul.
Kabul could also be defended much more easily if American forces with their ground attack fighters, drones and long range artillery remain. Subjecting Kabul to a missile barrage as in the past would be difficult if not impossible given US surveillance and precision bombing capabilities. Pashtuns, who have moved to Kabul during the relative peace of the past decade, and the Tajiks, who have built homes in and around Kabul, would resist any Taliban takeover of the capital. In Afghanistan, Kabul remains the political centre and the Taliban cannot pretend to any success unless they take this city.
Pessimists of course do not think this strategy would work. For one, most Afghans, especially the Pashtuns, would continue to resent foreign occupation; and keeping lines of communications open to the airbases would be difficult and costly. Even the most optimistic would have to concede that the Taliban would in all probability assume de facto control of large parts of Pashtun dominated eastern and southern Afghanistan.
As it is, the Taliban cannot entirely be suppressed in these areas even with the large presence of US troops. A de facto partition of Afghanistan along ethnic lines – Pashtun versus non-Pashtun – would most certainly result and this would never be acceptable to the Pashtun majority. Another endless civil war would ensue leading to prohibitive costs of maintaining US bases in Afghanistan or to an eventual complete American withdrawal. Moreover, Pashtun pockets in the north and the west of the country would always be potential bridgeheads for the Taliban.
The long term prognosis therefore looks bad from the ramparts of New Delhi’s South Bloc offices. The return of extremist Islamist forces to Afghanistan could be worse this time because they would consider themselves invincible after having once again defeated a superpower. Pakistan too would be vastly emboldened by the obvious limits to US military power and would be less inclined to restrain itself. The jihad factories would once again spring up in parts of Afghanistan and the Taliban would be back in business. A new generation of guerrillas would be raised for fighting the Kashmir jihad.
US Policy in Flux
US policy on Afghanistan is in a state of flux. While Washington is fully aware of the dangers of a complete military withdrawal, it is not sure what would constitute a viable, sustainable alternative. Washington’s problems are compounded by political uncertainty within the United States, the demands of the 2012 presidential polls and a deteriorating economy. Popular US support for the Afghan war is at an all-time low and a burgeoning defence budget has become a matter of national concern.
While the precise contours of Washington’s post 2014 policy will emerge only in early 2013, certain constraints are visible even now. For one, Washington cannot afford, both for economic and political reasons, to retain high levels of troops in Afghanistan. Even if it decides to maintain a military profile post 2014, it must be content with a minimal force. Second, Washington desperately needs to pare its military budget and therefore its global military commitments.
Recent reports about the Obama Administration’s plan for a "realistic" military vision suggests that severe cuts in force levels, especially of the US Army, would lead to a drawdown of US forces in Europe, Latin America and Africa with the focus being on Asia. The plan aims to cut tens of thousands of ground troops and invest more in air and sea power.
Washington also has to decide how it will play Pakistan. The big question is whether it will allow Islamabad’s dominance over Afghanistan or resist it. The second course would most certainly lead to heightened tensions between Islamabad and Washington and could also lead to a crisis between the two somewhere down the line. The first option would leave Washington with much less responsibility and basically amount to turning away from Afghanistan. This option would spell bad news for New Delhi.
Economic Implications of Drawdown
The Afghan economy has been growing by leaps and bounds in recent years, thanks to the infusion of foreign aid, the high levels of spending by foreign military forces and the rebuilding of infrastructure. Real GDP growth has averaged more than 10 per cent annually over the past five years and was an estimated 8.2 per cent in 2010. According to the IMF, the economy in 2011 is expected to grow by 7.1 per cent and thereafter rebound to 9.5 per cent in 2013.
Most aspects of the economy have been looking up
inflation is moderate and tax revenues are rising. However, as a recent Asian
Development Bank report pointed out: "the fiscal position (excluding grants)
remains among the world’s weakest. Development expenditure is almost fully
funded by external assistance while fiscal sustainability —domestic revenue as a
share of recurrent spending—is expected to decline to around 65% in FY2010 from
72% a year earlier. This decline is due to upward pressures on recurrent
spending, mainly from the higher wage bill owing to the expansion of the Afghan
security forces and the rollout of pay and grading reforms for civil servants.
Steps toward fiscal sustainability are particularly important given plans to
transit to Afghan-led security, since most International Security Assistance
Force nations are setting dates for withdrawing their troops."
The question is whether the Afghan government will be able to generate enough revenues to pay salaries for the civil administration, the military and for economic development in the medium term? For, as former US Ambassador to Afghanistan, Zalmay Khalilzad observed: "Ten years after the U.S. invasion of Afghanistan, the gains that the international coalition has made with its local partners are real but reversible. Afghanistan is no longer a global hub of terrorist activity, but a Taliban resurgence would threaten to make it one again."
Even though Kabul has succeeded in raising taxes from 6.5 per cent of GDP in 2005-06 to more than 11 per cent in 2010, the outlook is not good. Currently, the economy is virtually sustained by foreign aid and in early 2010 the international community had waived off US $ 1.6 billion of debt. The Afghan government plans to introduce VAT in 2014 to generate more revenues but even then fiscal spending will be far short of revenues with little option of borrowing. In 2011, government revenues as percentage of GDP was just 11.3 per cent, one of the lowest in the world, while the average for oil importing Asian countries was more than 20 per cent. Spending by Afghanistan that year was more than double at 21.6 per cent of GDP.
"Afghanistan has the potential to grow by around 6 to 7 per cent over the medium term, but this assumes a stable security situation and is subject to considerable uncertainty", an article in the IMF Survey magazine pointed out1. "Much depends on the economic impact of the troop withdrawal as well as the evolution of the security situation, which in turn affects the business environment. Risks are clearly to the downside, and, if security does not stabilize or the negative impact of the troop withdrawal is larger than currently estimated, economic activity could easily come to a standstill or worse."
The bigger problem is the substantial economic disruption Afghanistan will experience when the war eventually winds down. The war economy acts as Afghanistan’s single largest employer on the construction and supplies front. The Afghan economy is also heavily dependent on the US, in the form of military expenditure and financial aid. Experts have suggested that the withdrawal of troops would plunge Afghanistan into a period of "very slow" progress, where only a small percentage of Afghans have found suitable and sustainable employment in areas like public health and education.2
Robert B. Zoellick, writing in The Washington Post, has pointed out that "From 2010 to 2011, military spending was estimated at more than $100 billion, while spending on aid could be as high as $15.4 billion. Total gross domestic product is about $16.3 billion. As the troops withdraw, support will shrink. Private consumption is closely linked to military spending and aid."
Afghanistan is one of the world’s largest recipients of aid, it was in 2010-11 $15.7 billion—about the size of nominal GDP. Total aid to Afghanistan last year was equivalent to 91 per cent of its economy, but most military and other aid was spent outside the country. Some analysts fear that there is a chance of a complete collapse of the Afghan economy once US troops leave.
Regional Economic Problems
Afghanistan is not alone in its economic woes. Pakistan too has been struggling to keep its economy afloat. In 2008, Islamabad took an $11 billion IMF loan. The programme was halted in August 2011 due to Islamabad’s refusal to implement fiscal reforms and over $3 billion of the loan was left unused. In September 2011, Pakistan said it would not seek a new International Monetary Fund (IMF) programme because it had no balance of payments crisis and enough foreign exchange reserves.
Economists believe that Islamabad was putting on an unreasonably brave face when in fact its long term economic troubles were only mounting. The biggest problem is Pakistan’s balance of payments, which has traditionally been in the red and covered only by foreign aid and inward remittances. According to the Economic Intelligence Unit "Foreign direct investment (FDI) fell in the first four months of 2011/12 by 28% year on year to stand at just US $340m. Meanwhile, foreign portfolio investment recorded a net outflow of US $102m. The bulk of FDI in the four-month period came from the Middle East and China. The fall in capital inflows is worrying given Pakistan’s rising levels of external debt. The government repaid debt worth US $8.9bn in 2010/11; this represented US $1.1bn of interest payments and US $7.8bn of principal repayments. However, total external debt increased from US $57.4bn in June 2010 to US $61.9bn in June 2011."
Pakistan has been saved by remittances which continued to perform strongly. "In the first four months of 2011/12 remittances grew by 23% year on year to stand at US $3.5bn. Although remittances are growing strongly, the weakness of capital inflows coupled with a widening current-account deficit and a depreciating local currency raises the risk of balance-of-payments difficulties in the coming months-particularly as Pakistan will soon have to begin repaying loans to the IMF," the EIU pointed out.
Pakistan’s foreign trade outlook is not bright. Merchandise exports (fob) stood at US $21.5bn in 2010, while imports (fob) totalled US$32.9bn in that year, resulting in a trade deficit of US $11.4bn. With a population of 184 million (2010 estimate) growing at a breakneck speed of 2.2 per cent annually (compared to 1.3 per cent in India) and real GDP growth stagnating at 4 per cent or less, poverty is growing and with it extremism. The Pakistani rupee has fallen to 85 per US dollar and energy shortages continue to put a huge pressure on its balance of payments.
Afghanistan is becoming more important to Pakistan’s economy, with its relatively low foreign trade levels. Last year as much as 10 per cent of Pakistan’s exports went to Afghanistan. Assistance from Washington remains crucial, no matter what Islamabad might say. During 2002-2010, the US poured in US $20.7 billion of which $14.2 billion went to the Pakistani military. This money lined the pockets of the generals but also cushioned the country’s balance of payments.
Some Pakistani experts have argued that US financial assistance is not significant. "World Bank data shows that net Official Development Assistance (ODA) from all sources to Pakistan in the last five years has averaged less than 1.5 per cent of Gross National Income (GNI)", argued commentator Hameed Wahid [Pakistan Observer, 5 January 2012]. US aid does not help the government’s precarious fiscal situation in any meaningful way as only 12-15 per cent of the total amount is channelled for budgetary support. These facts do not, by any understanding, reflect that the Pakistani economy will collapse if the US decides to withdraw economic aid."
Others do not agree. Dave Heller felt that the "International Monetary Fund forecast for the country is bleak at best with a projected growth 3.5% for the next fiscal year, a $1.6 billion deficit, a Standard and Poor’s rating of B-, and a Moody’s score of B3. What’s more, Pakistan must begin its payment for its loan by the IMF in early 2012 with a $1.1 billion payment for the second half of that year."3
More worrying for New Delhi is the fundamental realignment of Asian geopolitics. For, the general view in Asia is that the US exit from Afghanistan would mark the beginning of the West’s long retreat from that continent. India has become distinctly pro-West in recent times and the decline of the West in Asia would be added cause of anxiety for New Delhi. Especially because the resulting power vacuum seems destined to be filled by the continent’s ascendant power, China.
The other reason for China’s raised profile in the region would be Pakistan, a nation that increasingly looks incapable of fending for itself. China’s sole publicly proclaimed strategic ally is Pakistan, which it has helped by giving nuclear weapons technology and material, subsidised conventional arms, combat aircraft and naval assets. Pakistan is eagerly waiting for the departure of US forces from Afghanistan to re-establish its defacto control over that country, this time, with the help of China. Beijing has no particular issue with radical Islam, despite the Uighur problem which has been managed quite easily. Beijing also has no ideological issue with Islamist ideology; it views the problems of the Middle East as the legacy of colonial and imperialist policies; and it does not feel compelled to take sides.
Beijing’s aims at the moment are practical and it does not seek to project a way of life or propound the merits of Chinese communism. Its decision to sell ballistic missiles to Saudi Arabia and smaller missiles to Iran is based on pragmatic goals. In exchange, it wants humungous quantities of oil, gas, strategic minerals and fissile material. In Afghanistan, Chinese eyes are on strategic minerals, including iron ore and copper. Beijing therefore would be only too happy to strike a deal with its ally, Pakistan, to stabilise Afghanistan in any way. After all, Washington too had once fallen in with Islamabad’s idea of the Taliban bringing stability to Afghanistan and allowing oil companies like Unocal to bring gas and oil through it from Central Asia. Thus, Beijing would be content to let Islamabad take defacto control of Afghanistan after the departure of Western forces.
To consolidate its strategic hold on the region and ensure that India does not meddle with its regional strategy, China has begun building and securing transport, communications and support infrastructure in a key territory wedged between India and Afghanistan. This area is Gilgit-Baltistan, originally a part of the undivided state of Jammu & Kashmir annexed by Pakistani forces in 1947-48.
Will the Peace Hold After 2014?
"So what will Afghanistan look like after 2014 when the foreign troops have left the country?" asked Afghan journalist, Bashir Ahmad Gwakh. "It is as simple as this: if Afghanistan reaches a peace deal with the Taliban before 2014 and overcomes the armed groups to a certain extent, the Afghan forces — despite their small number — would be able to keep their country secure. The Taliban confirmation of willingness to have a political office in Qatar seems a huge success and the first real step forward in a potential political settlement. However, if this major breakthrough is not explored further and does not end the insurgency, Afghanistan will remain as vulnerable as it is. As a result, the Afghan National Army and the Afghan National Police will be an easy target for the Taliban. In other words, the Afghan troops will not be able to defend themselves against terrorist attacks. To assure some success in persuading the insurgents to lay down their weapons, the US has to somehow force Pakistan to stop helping Afghan armed groups and ‘allow’ them to participate in negotiations."4
However, even Gwakh admitted there were other, bigger problems. "Many Afghans believe that the 2014 US exit strategy is premature. American withdrawal means leaving Afghanistan at the mercy of its antagonistic neighbours. In such a case, Pakistan will support the Taliban. Afghanistan could once again turn into a place where terrorists can have safe havens and host Al Qaeda," Gwakh concluded5.
From all accounts, the prognosis is gloomy and Islamabad is probably the only actor in the entire drama looking at the developments with a degree of satisfaction. But even Islamabad’s optimism might be short lived as the Western drawdown from Afghanistan leaves a yawning economic and military void. This void cannot be entirely filled by China and therefore must draw in more and more forces of extremism. This dynamic coupled with a downward economic spiral for the AfPak region can only spell disaster. Indian policy makers looking afar from Raisina Hill would do well to work out a plan for a worst case scenario in their northwest.
1. Asain Development Outlook 2011, ADB, Rehman Rahmani
and Tia Raappana of the Afghanistan Resident Mission, ADB, Kabul; and
Nina Clare Fenton of the Central and West Asia Department, ADB, Manila.
2. Afghanistan to Get $133.6 Million IMF Loan, IMF Survey online, November 15, 2011, IMF Survey Magazine: Countries & Regions.
3. Afghanistan is Broke, US Drowning in Debt - So What About a War Ceiling? By Michele Lin Date:2 August 2011, Economy Watch.
4. Disaster Would Strike If U.S. Cuts Pakistan Aid, Dave Heller, policymic, 21 Dec 2011.
5. Afghanistan beyond 2014: hopes and concerns - Bashir Ahmad Gwakh. Daily Times, 6 January 2012.