Monday, 14 December 2015 00:00

The EU and Kazakhstan: Developing a Partnership in Trade and Transport

by S. Frederick Starr and Svante E. Cornell

Click Here for PDF version

In 2015, the EU revised its Strategy for Central Asia, and finalized an Enhanced Partnership and Cooperation Agreement with Kazakhstan. These welcome steps will not turn the EU into a regional powerhouse overnight, but provide the EU with a platform to play a constructive role in Central Asia. The EU can achieve that if it avoids focusing on issues where it has little hope of direct influence, such as regional security affairs and domestic governance. Instead, to gain such a role eventually, the EU should focus on revitalizing the promise of its visionary initiative of the 1990s – the Transport Corridor linking Europe to Asia via the Caucasus and Central Asia – which it allowed to slip, handing the initiative to other powers, primarily China.

 

An Enhanced European Profile in Central Asia
On December 21 in Astana, the EU and Kazakhstan signed an Enhanced Partnership and Cooperation Agreement. This agreement, the first of its kind with a Central Asian country, had been initialed in January 2015, and provides an important platform for European engagement with Central Asia. In June, the EU Council in June 2015 also adopted so-called Council Conclusions on the EU Strategy for Central Asia, effectively updating the document dating to 2007. The signing of the Enhanced PCA took place on the sidelines of the eleventh EU-Central Asia Ministerial Meeting, which gathered representatives of the five states of post-Soviet Central Asia, and at which EU High Representative Federica Mogherini termed developments in Central Asia “extremely important” to the European Union.
Yet the PCA, and the broader Strategy, remain general documents that largely lack concrete priorities. They emphasize human rights as well as security and stability, yet the EU is unlikely to develop a sizable role in either area anytime soon. Security and stability in the region remains dependent largely on the regional states themselves, not least of them Afghanistan, and on the priorities of and interaction between Russia, China and the United States in the region. The EU can, and does, play a supporting role in enhancing border control and drug enforcement in the region, but has neither the intention nor the ability to expand its role to other areas. And whereas a number of EU member states have voiced strong concerns over the human rights situation in Central Asian states, the EU lacks the influence to affect the situation. Europe is simply not important enough a partner to affect the domestic priorities of Central Asian leaders, and certainly not to mitigate the adverse effects of the informal power struggles within regional elites that are often at the heart of the lack of meaningful reform.

The EU’s Comparative Advantage: Trade and Transport
There is, however, an area in which the EU could have significant impact – and one that would, in the long run, make it a much more credible force in enhancing security and promoting human rights. That is the development of Continental Transport and Trade – an area where the EU took the initiative in the early 1990s but ran out of steam.
With its visionary but poorly implemented TRACECA project (Transport Corridor Europe-Caucasus-Asia), the EU pioneered the idea of rebuilding trade and transportation arteries between Europe and Asia across Central Asia and the Caucasus. Since 1998, when the EU co-hosted a conference in Baku on the “Restoration of the Historical Silk Road,” the term “New Silk Road” has gained currency in a virtual competition of initiatives. The U.S. launched its New Silk Road (NSR) initiative in 2010, which nevertheless remained focus on a North-South axis centered on Afghanistan, and failed to get the endorsement from the Presidential level needed for its success. In 2013, China launched the much more well-endowed Silk Road Economic Belt. It is remarkable that the EU is now absent from the list of leaders of this grand project. In fact, initiatives of the regional countries themselves have gained a profile much greater than TRACECA’s. Kazakhstan and Uzbekistan have made major investments in railroad development; Azerbaijan, Kazakhstan and Turkmenistan have each developed modern port facilities on the Caspian Sea; and Azerbaijan, Georgia and Turkey are about to complete the missing links in a railroad corridor that could link Hamburg to Hanoi. Further west, Georgia has developed the capacity of its Black Sea ports, while Lithuania has pioneered a “Viking Railway” linking the Baltic and Black Seas across Belarus and Ukraine.
But while overland trade links offer great potential benefits, these corridors are only in a formative stage. Approximately 90 percent of the cargo from Europe to China is transported by ship via the Suez Canal; most of the remaining volume is flown by air. The overland corridors traversing Central Asia are shorter compared to sea routes, but are presently inefficient and, in some cases, relatively expensive. Several obstacles must be overcome in order to make overland transport corridors genuinely competitive. Notable among these are slow borders, but other causes for delay range from impediments in the legal, economic, tax, organizational, and banking sectors to issues with security and communications. Furthermore, there is a need to create integrated and competitive intermodal transportation and logistics networks across the region. The fact that Central Asia is landlocked compounds these problems, but the heart of the problem is that bottlenecks in one section of a given route end up affecting the entire route and those trading along it. It is in these areas that the EU could play an important role.
As European leaders consider the expansion of trade and transportation links, Kazakhstan occupies a unique position in at least three ways. First, by virtue of geography, Kazakhstan forms a one-country link between China and the Caspian Sea. Second, as the signing of the Enhanced PCA shows, Kazakhstan is the Central Asian country that has gone the farthest in terms of deepening institutional cooperation with the EU. Third, in a regional context Kazakhstan offers an improving business environment crucial to the establishment of a trading hub: In the World Bank’s Doing Business 2016 ranking, Kazakhstan jumped 12 positions in a year, from 53rd to 41st. If the EU were to take a more strategic approach to continental transport and trade, it will be natural to focus initially on the partnership with Kazakhstan. Importantly, this should not occur at the expense of a focus on other regional countries, but as a first step in what must ultimately be a regional effort that includes all Central Asian states, including Afghanistan.
To date, the EU and Kazakhstan have focused their efforts almost entirely on the link between China and Europe. In light of the advanced development of infrastructure along this route such a focus is entirely natural. However,Europe's long-term interest will include an equal emphasis on connecting Europe and India. This development is almost inevitable, given the demographic future of the Indian sub-continent (India, Bangladesh, and Pakistan). Within twenty years this region will be far more populous than China and, unlike China, with its rapidly ageing population, all three countries on the Indian sub-continent will have a far larger working age population. In this respect, India's cohort alone will far outstrip China. Even if the economies of the subcontinent progress at a slower rate than China did in the period 1991-2016, one can be certain that the importance of their land trade with Europe will soar.
Kazakhstan's location offers great potential for such trade with both northern Europe and Russia, but such potential will not be achieved without focused and joint attention to the Europe-Kazakhstan-India route by the EU and Kazakhstan together.

Promoting Market-Oriented Initiatives and ‘Soft Infrastructure’
So far, the efforts to promote Eurasian trade routes have been dominated by governmental programs, as is understandable with infrastructure. However, henceforth the progress of the initiatives will increasingly be determined by market realities. The key question is whether shippers in the EU, the Middle East, and Asia will choose to use the infrastructure that governments have helped provide. The development of land routes is occurring at a time when ships are going back and forth between Europe and Asia partially empty. Therefore, the building of trade links in Europe and Central Asia should focus not just on the completion of TRACECA, but more importantly, on making these transit routes attractive from a market standpoint.
The program will rise and fall on the basis of soft infrastructure, which depends solely on the private sector. This means that governments have to focus on easing the crossing of borders, implementing low or at least competitive tariffs, as well as providing frameworks that ensure the quick and fair resolution of disputes arising from shipping. In sum, the task will be to focus on the market and make trade routes both predictable and attractive to businesses near and far.
It is unfortunate that enthusiasm for the construction of “hard infrastructure” has relegated all other forms of infrastructure to a secondary status. The world is littered with grand infrastructure projects that failed due to the postponement or non-existence of the supporting institutions that are essential to their functioning. The widely quoted phrase “Build a road (or railroad) and people will use it” is simply wrong. They are just as likely to ignore it.
“Soft infrastructure” takes many forms. The most obvious is the structure of tariffs imposed on shippers using a given railroad or road. The case for low tariffs is obvious, for without them shippers will turn to more competitive routes. But if they are too low, citizens of the transited country will object, claiming that their territory is being used by others, without adequate payments to them. Reasonable and firm agreements between the EU and Kazakhstan can prevent this from happening. Such agreements must involve all interested countries and parties and must be solidly endorsed by the private sector as well.
A second dimension pertains to private firms in such fields as freight forwarding, logistics, insurance, storage, supplies and equipment maintenance, and hotels. Each of these is important. Indeed, the absence of any one of them could break the chain of institutions necessary for the smooth functioning of an international trade corridor.
To date, there has been little, if any, serious discussion of these crucial issues. Even though private firms in many countries have quietly carried out their own analyses of the needs and prospects, there exists no major study by either European or Central Asian experts on how to encourage the establishment of the network of companies and industries as a whole. Such studies, in which European and Kazakh experts could take the lead, should seek to identify the impediments that will inhibit the free development of private initiatives in each of these areas, and which may arise from national legislation, permit requirements, overly restrictive labor laws, taxation of essential imported equipment, or controls on the repatriation of earnings. The first task of policy must be to identify all such barriers to the development of soft infrastructure in each of the areas listed above and to lead a systematic process to alleviate them.
Further, effective measures must be taken to ensure that a key node is created along the China-Europe route for firms in all the key areas of soft infrastructure, e.g. freight forwarding, logistics, insurance, storage, supplies and equipment maintenance, and hotels. A glance at the map, as well as the country’s economic situation, shows that Kazakhstan is ideally situated to serve as a hub for these services.
However, geography is not destiny, and any number of impediments could neutralize the potential benefits Kazakhstan should derive from its location. While Kazakhstan has embarked on laudable efforts to diversify its economy and has a more beneficial business climate than its neighbors, the country does not presently offer market-friendly conditions to host firms in all these areas. Still less is it able to generate firms of its own that will be able to successfully compete with the international giants that will inevitably appear on the scene. Restrictive regulations, bureaucratic lethargy, and outright corruption are the chief villains. Without a firm hand from the Government of Kazakhstan, backed up by clear and effective support from the EU, Kazakhstan will be doomed to the status of a passive transit country and not an active participant in the new continental economy and a beneficiary of its fruits.
Serious and well-known impediments in Afghanistan and Pakistan/India have caused policy-makers to ignore the opening of a Europe-India route via Kazakhstan. This is a mistake. Both Europe and Kazakhstan have a serious long -term interest in this second continental corridor, and they should therefore be working together now to remove these impediments. Recent visits by the presidents of Pakistan and India to Central Asian capitals, the signs of a practical detente between India and Pakistan on the issue of trade, and the opening of work ion the TAPI pipeline, which involves India, Pakistan, and Afghanistan in a collaborative effort, justify cautious optimism. The EU and Kazakhstan should therefore place diplomatic work in behalf of a future EU-India corridor via Kazakhstan at the top of their regional diplomatic agendas, and begin making practical plans for such a land corridor in the event that a breakthrough occurs.

Going Forward: EU-Kazakhstan Cooperation on a Logistics Hub
The EU and Kazakhstan, involving official bodies but especially the private sector, should develop a partnership in all fields of logistics to accomplish two goals: first, to have them base their Central Eurasian operations in Kazakhstan and, second, to work with Astana to create Kazakh-managed entities locally. In other words, the goal should be to strengthen Kazakhstan’s public and private sector in all the relevant fields of soft infrastructure. Since nearly all of Eurasia’s leading logistics firms are European (mainly German, Swiss, and Danish), it would be possible within the framework of the EU-Kazakhstan partnership to mount a systematic program to build Kazakhstan’s capacity in the area of soft infrastructure to a world-class level. Once this is realized, it is more likely than not that such success will nudge Kazakhstan’s neighbors toward emulating the reforms that were needed for this to be realized.
A recent Kazakh initiative is relevant in this regard: the Astana International Financial Center, modeled on the equivalent center in Dubai, which was announced in July 2015. Confirmed by the Kazakhstani senate in November 2015, the AIFC will be lodged on the grounds of the EXPO 2017 in Astana, be based on British law, and will have a special tax, currency, and visa regime to attract foreign personnel. To establish Astana as a financial center, the AIFC will essentially operate under its own legal regime, derogated from national law. Clearly, this initiative, if realized, will go a long way toward encouraging the type of investments in soft infrastructure that will be crucial for the development of the transport sector, and on this basis, further specific initiatives in the transport sector should be considered.
It would be highly desirable for the EU to propose the creation of a special entity within its consultative process with Central Asia that would focus on land transport and would recommend joint actions that are needed in that area. Since the establishment of such an entity will take time, the EU should begin the process at once on a bilateral basis through its Enhanced PCA with Kazakhstan. However, a bilateral approach can only be a precursor and never a substitute for the region-wide arrangements that both the EU and Central Asian countries need.

S. Frederick Starr is Chairman and Svante E. Cornell Director of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Center affiliated with Johns Hopkins University-SAIS and the Institute for Security and Development Policy.

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  • Protests in Georgia | Laura Linderman
    Monday, 18 November 2024 16:37

     

    In Georgia, opposition parties have accused the pro-Russian Georgian Dream party of stealing recent elections, leading to protests and calls for an investigation into electoral violations. Discrepancies between official results and exit polls have sparked demands for snap elections supervised by an international body. The European Union has called for a thorough inquiry into allegations of voter intimidation and multiple voting. The protests are also a response to fears of Georgia shifting closer to Russia, with Western support at stake. The situation could lead to EU sanctions, further complicating Georgia’s aspirations for EU and NATO membership.

    For more details, check out the video.

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  • Greater Central Asia as a Component of U.S. Global Strategy
    Monday, 07 October 2024 13:50

    By S. Frederick Starr

    Central Asia-Caucasus Institute & Silk Road Studies Program
    Silk Road Paper
    October 2024

    Click to Download PDF

    Introduction

    Screenshot 2024-10-07 at 9.55.36 AMWhat should be the United States’ strategy towards Central Asia, the Caucasus, and the region of Greater Central Asia (GCA) as a whole? Should it even have one? Unlike most other world regions, these lands did not figure in US policy until the collapse of the USSR in 1991. Though the new Baltic states entered Washington’s field of vision in that year, in those cases the Department of State could recall and build upon America’s relations with independent Estonia, Latvia, and Lithuania during the inter-war decades. For the US Government after 1991, GCA was defined less as sovereign states than as a group of “former Soviet republics” that continued to be perceived mainly through a Russian lens, if at all.  

    Over the first generation after 1991 US policy focused on developing electoral systems, market economies, anti-narcotics programs, individual and minority rights, gender equality, and civil society institutions to support them. Congress itself defined these priorities and charged the Department of State to monitor progress in each area and to issue detailed country-by-country annual reports on progress or regression. The development of programs in each area and the compilation of data for the reports effectively preempted many other areas of potential US concern. Indeed, it led to the neglect of such significant issues as intra-regional relations, the place of these countries in global geopolitics, security in all its dimensions, and, above all, their relevance to America’s core interests. On none of these issues did Congress demand annual written reports.  

    This is not to say that Washington completely neglected security issues in GCA. To its credit, it worked with the new governments to suppress the narcotics trade. However, instead of addressing other US-GCA core security issues directly, it outsourced them to NATO and its Partnership for Peace Program (PfP). During the pre-9/11 years, PfP programs in the Caucasus and Central Asia produced substantial results, including officer training at the U.S. Army’s program in Garmisch-Partenkirchen, Germany, and the Centrasbat, a combined battalion drawn from four Central Asian armies. But all these declined after 9/11 as America focused its attention on Afghanistan. 

    Today this picture has dramatically changed, and the changes all arise from developments outside the former Soviet states. First came America’s precipitous withdrawal from Afghanistan, which brought important consequences. As the U.S. withdrew, new forces—above all China but also Russia and the Gulf States—moved in. Also, America’s pullout undercut the region’s champions of moderate Islam and reimposed a harsh Islamist regime in their midst. And, finally, because Central Asians have always considered Afghanistan as an essential part of their region and not just an inconvenient neighbor, they judged the abrupt U.S. pullout as a body blow to the region as a whole. Now the scene was dominated not by the U.S. but by China and Russia competing with each other. Both powers presented themselves as the new bulwarks of GCA security, and reduced the U.S. to a subordinate role. 

    While all this was going on, the expansion of China’s navy and of both Chinese and European commercial shipping called into question the overriding importance of transcontinental railroad lines and hence of GCA countries. Taken together, these developments marginalized the concerns and assumptions upon which earlier US strategy towards GCA had been based. With Afghanistan no longer a top priority, American officials refocused their attention on Beijing, Moscow, Ukraine, Israel, and Iran, in the process, increasing the psychological distance between Washington and the countries of Central Asia and the Caucasus.  

    It did not help that no U.S. president had ever visited Central Asia or the Caucasus. This left the initiative on most issues to the GCA leaders themselves. Thus, it was Kazakhstan and not the State Department that proposed to the U.S. government to establish the C5+1 meetings. It was also thanks to pressure from regional leaders that the White House arranged for a first-ever (but brief) meeting between Central Asian presidents and the President of the United States, which took place in September 2023 on the sidelines of the United Nations General Assembly in New York. By comparison, over the previous year Messrs. Putin and Xi Jinping had both met with the regional presidents half a dozen times. Hoping against hope, the Central Asian leaders hailed the C5+1 meeting as a fresh start in their relations with Washington. Washington has done little to validate this 

     

    Additional Info
    • Author S. Frederick Starr
    • Publication Type Silk Road Paper
    • Published in/by CACI
    • Publishing date October 2024
  • Press-Release: The "International Kazak Language Society" Presented the Kazakh Translation of "Geniuses of their Time Ibn Sina, Biruni and Lost Enlightenment", in Washington DC
    Tuesday, 22 October 2024 13:36

     

     

    PRESS-RELEASE

    THE INTERNATIONAL “KAZAK LANGUAGE” SOCIETY PRESENTED THE KAZAKH TRANSLATION OF “GENIUSES OF THEIR TIME. IBN SINA, BIRUNI AND LOST ENLIGHTENMENT”, IN WASHINGTON D.C.

     

    Author Dr. Frederick Starr places great importance on  making his work accessible to a broad audience

    October 21, 2024, Washington D.C. | The American Foreign Policy Council (AFPC) in Washington, D.C., hosted the presentation of the Kazakh translation of the book, “Geniuses of Their Age: Ibn Sina, Biruni, and the Lost Enlightenment”, authored by the renowned American historian Dr. Frederick Starr. This translation was initiated and realized by the International Kazakh Language Society (Qazaq Tili), with the support of Freedom Holding Corp., and in collaboration with the Embassy of the Republic of Kazakhstan in the USA.

    Dr. Starr's book, “The Genius of Their Age: Ibn Sina, Biruni, and the Lost Enlightenment “, explores the lives and contributions of two outstanding figures of the Eastern Enlightenment, Ibn Sina and Biruni, whose intellectual legacies shaped both Eastern and Western thought. It highlights their significant contributions to science, medicine, and philosophy, and their role in the broader development of human knowledge. A major portion of the narrative details their biographies, achievements, and the lasting impact of their work on the intellectual heritage of the world.

    This is the second translation of Dr. Starr's work into Kazakh, following the successful release of his first book, “Lost Enlightenment: Central Asia's Golden Age from the Arab Conquest to Tamerlane” by the International Kazakh Language Society.

     

    The translation of this latest work was inspired by and aligns with the vision outlined in Kazakh President Kassym-Jomart Tokayev’s recent article, “Renaissance of Central Asia: On the Path to Sustainable Development and Prosperity.” In support of promoting a shared vision for Central Asian prosperity, the book, which sheds light on the region’s profound intellectual legacy, was translated into Kazakh and made accessible to the public.

    The book presentation was attended by the author of the book Dr. Frederick Starr, member of the Board of Directors of Freedom Holding Corp. Kairat Kelimbetov, and Rauan Kenzhekhan, President of the International Kazakh Language Society (Qazak Tii).

    "This book is a tribute to the brilliant minds of Ibn Sina and Biruni, who made monumental contributions to science and thought long before the European Renaissance. The book also honors other scholars such as al-Farabi, al-Khwarizmi, Omar Khayyam, Abu-Mahmud Khujandi, al-Ferghani, and others whose names have entered the world's intellectual heritage. These two geniuses from Central Asia not only pioneered in various fields of knowledge but also developed research methods that are still relevant today,” said Kairat Kelimbetov, member of the Board of Directors of Freedom Holding Corp. 

     

    Rauan Kenzhekhanuly, the President of the International Kazakh Language Society, emphasized the significance of making Dr. Starr's work accessible to Kazakh readers: "The translation of this book into Kazakh is significant for us. Dr. Starr's work offers profound insights into Central Asia's historical contributions to global knowledge and underscores the region’s role as a vibrant hub of intellectual and scientific discourse during the Enlightenment. By reconnecting with the foundations of our region's 'golden age' and learning from both its successes and declines, we can pave the way for a collective future of prosperity and innovation."

    The book was translated and published by the International "Kazakh Language" (Qazak Tili) Society with the support of Freedom Holding Corp. Thanks to the support of the American Foreign Policy Council and Rumsfeld Foundation for hosting and partnering. 

    The International "Kazakh Language" Society (Qazak Tii: www.til.kz) is the largest non-profit organization dedicated to preserving and promoting the Kazakh language and cultural heritage. Through education, translation projects, and international collaborations, the organization aims to bridge cultures and empower future generations to embrace their identity while contributing to a more interconnected and culturally diverse world.

    Freedom Holding Corp. is an international investment company that provides a range of services, including brokerage, dealer, and depositary services, as well as securities management and banking services. The company was founded in 2013 by Timur Turlov, a Kazakh entrepreneur and financier.

    The book is available in the libraries of educational institutions in Kazakhstan, the digital version can be accessed for free on the Kitap.kz portal.

  • Dysfunctional centralization and growing fragility under Taliban rule
    Wednesday, 11 September 2024 14:35

    By Sayed Madadi

    One year ago, on Aug. 31, 2021, the last foreign soldier left Afghanistan. Since then, the situation in the country has only grown more fragile, marked by deteriorating living conditions, widespread human rights violations, and increasing political instability. One key contributing factor to the crisis is a dysfunctional centralized governance structure that has become more paralyzed and unresponsive under Taliban control. The group has greatly aggravated the problem with its rigid religious ideology and exclusive political agenda, but it well predates the Taliban takeover. The situation has steadily deteriorated over the past two decades as a result of a system that undermined local mechanisms of resilience, deprived people of access to basic public services, and marginalized them politically. With the Taliban at the helm, the system now only perpetuates further political exclusion, economic deprivation, and human suffering. The worsening economic conditions and political environment in the last year offer ample evidence of this.

    Ever hungrier population

    According to the most recent data from the World Bank, Afghanistan is now the poorest country in the world and the per capita income has declined to 2006 levels. The Taliban’s return to power exacerbated an already worrisome economic and humanitarian situation. Pushed to the brink by recurrent droughts, chronic cycles of violence, and poor governance, the insurgent offensive that captured Kabul last August created a shockwave that neither the economy nor the people could absorb. Before 2021, the latest poverty rate in Afghanistan was 47% and 35% of people reported that they were unable to meet their basic needs for food and other essential goods. Now, according to the World Bank and the United Nations, more than 95% of the population is poor, with more than 70% suffering from food insecurity. In an undiversified and limited economy that does not have much to offer, only a staggeringly low 2% said that they did not face limitations in spending. Rising prices caused by high inflation, the liquidity crisis, and a massive drop in international trade, coupled with sharply decreased household incomes, have reduced purchasing power for millions and increased unemployment to record levels, even as an estimated 600,000 people enter the labor force annually.

    Many of these sources of fragility, of course, existed before the Taliban came to power. For over a century, Kabul has grown in monetary wealth, human capital, and opportunities at the expense of the rest of Afghanistan. The economic wealth and metropolitan character of the capital has come with the centralization of state power and revenue collection since 1880. For decades, lack of opportunities — and later on conflict — brought the best and the brightest from around Afghanistan to the capital, thus gradually draining the provinces of intellectual capital and economic resources. Historically, the Kabul-based kings gave land titles and trade monopolies to traditional power-holders in return for revenue, while the latter extorted the local population to raise what was required to pay Kabul. The central state relied on the periphery for resources, soldiers, and legitimacy, but hardly provided anything in return.

    The 2004 constitutional architecture did little, if anything, to change that. As foreign funding flowed in at unprecedented levels, the concentration of political power and economic planning in the capital continued to draw resources and talent from the periphery, eroding the foundations of local resilience. Local and provincial power holders and economic tycoons survived only because they maintained strong ties with those who controlled financial wealth and political decision-making at the center. The immense wealth that the Karzais gained in the south or the riches that Atta Mohammad Noor was able to raise in the north were not possible without the backing of central authorities, which in both cases were highly formalized: Ahmad Wali Karzai was the head of Kandahar’s provincial council and Atta served as the governor of the lucrative Balkh Province for over a decade. Staggering levels of corruption and state capture enabled a select group to easily gain control of the country’s economic riches and move them abroad.

    The population was already struggling by the time the Taliban returned to power. Studies and analysis by the U.N., the World Bank, and independent observers had long warned about increasing poverty, unemployment, and cyclical droughts. After last August, the depletion of human resources and economic wealth and the withdrawal of the international presence in Kabul disrupted value production and business enterprise around the country. The crisis has left millions of people helpless, not only because of their reliance on the Kabul-centric legal regulatory framework, but also because most of the job market — the public sector and the NGOs — was funded by donor money from Kabul. The full international withdrawal shrank the economy by more than one-third and the implications of the political crisis disrupted the markets for much longer than the country could afford. After severe drought and conflict displaced over 700,000 people last year, hundreds of thousands have left Afghanistan since August 2021 in search of a better life.

    The Taliban's inability and unwillingness to provide public services and reinvigorate economic activity led to the further deterioration of living conditions and heightened the people’s vulnerability. The World Bank reported that more than 81% of household heads were self-employed after Aug. 15, 2021. An absolute majority of them are not business owners but job seekers turning to physical labor and street vending to avoid starvation. The Taliban authorities claim that they have increased revenue collection at border crossings, mainly by curbing corruption and expanding ports with taxable trade. However, the regime does not provide even basic public services such as education and health with that revenue. For example, nearly half of schools are closed as the Taliban still refuse to allow girls to access secondary education, resulting in a major decline in public spending. Most of the health infrastructure is supported through international humanitarian aid by the U.N. and ICRC, and the extravagant Afghan National Defense and Security Forces no longer exist. On top of that, only a fraction of public servants go to work, and after months of delays they now receive far lower salaries based on the regime’s new pay scale — labor earnings in the public sector have declined by 69%.

    Therefore, without offering social protection, public services, and economic opportunities, the centralized revenue collection continues to further deplete the provinces of resources that could otherwise help them mitigate the risks of economic and environmental shocks. The Taliban's interference in the distribution of humanitarian aid takes away from the neediest people their only means of survival in the midst of destitution, further compounding local fragility. Despite a year of trials and the infusion of more than $2 billion in aid into Afghanistan, the economic and humanitarian situation continues to deteriorate. Although conventional humanitarian assistance programs help people get by in the short term, they also reinforce a relationship of dependency on aid without developing opportunities for employment and private enterprise, thus reinforcing deeper vulnerability. These approaches — coupled with the Taliban’s centralized and unaccountable governance — build on ineffective modalities that disenfranchise local communities, compound economic deprivation, exacerbate environmental shocks, and intensify human suffering.

    A totalitarian regime

    The political and human rights situation has equally deteriorated under the Taliban. While the Afghanistan Independent Human Rights Commission says more than 1,500 people have been killed by the regime since last August, some independent observer groups report that around 2,000 civilians from the Hazara ethnic community alone have been killed. Protests by women have been repeatedly suppressed and participants have been imprisoned, tortured, and killed. The government is populated entirely by Taliban clerics, excluding all other political forces and non-Pashtun groups. The persecution of Tajiks in the name of quelling the military resistance in the north and of Hazaras justified by ethno-sectarian divisions — the latter are mostly Shi’a — continue. Afghanistan is the only country in the world that prevents girls from getting an education by barring them from secondary schools. Most women cannot work, and a woman’s political agency and social status are tied to that of a man, who has to accompany her, fully veiled, anywhere she goes outside the home. According to Reporters Without Borders, 40% of all media outlets in the country have disappeared and 60% of journalists have lost their jobs. The figure for female journalists is even higher, at 76%.

    The Taliban have managed to consolidate their power within an Islamic Emirate that borrows significantly in structural design from its predecessor Islamic Republic, rather than introducing a new institutional architecture. Save for a few tweaks, the broader framework of the system has remained the same. The judiciary system, for example, and its relationship with the head of state have not changed. The Taliban have kept most political and governance institutions as they were, filling positions across the ministries and provinces with their own appointees. The major institutional change the Taliban have brought has been the removal of elections to establish popular legitimacy: The head of state is now a divinely mandated supreme leader, and there is no legislative branch. These alterations, while substantial on paper, have not changed much in practice. Given the highly centralized nature of the republic with an overly powerful president at the top, electoral processes had failed to produce either legitimacy or accountability for much of the last two decades. In many instances, elections provided opportunities for embezzlement and corruption by enabling actors with ulterior motives to buy votes and then abuse public office to enrich themselves. This was particularly true in the case of the parliament and provincial councils, institutions captured by a handful of kleptocrats who failed to keep an overly strong executive in check.

    The binary division of a republic versus an emirate was what bogged down the peace talks until they fell apart in the run-up to the Taliban’s takeover of Kabul. The fact that the group has consolidated its power through the very system it so vehemently rejected says a lot about the actual democratic character of the centralized political institutions. The narrowing of the public space under the Taliban, for example, indicates that the degree of openness for debate and democratic practices before 2021 was not necessarily a byproduct of a meticulous institutional design that checked the use of power and ensured accountability. Rather, it was attributable to the personal commitment to democratic values of those in control. For over a decade, Hamid Karzai, who ruled through tribal consensus and appeasement, enabled a conducive environment in which a vibrant media industry and civil society took root. Across Afghanistan, especially in Kabul and other key urban centers, demonstrations against the government were ubiquitous.

    After 2014 when Ashraf Ghani came to power, the democratic space began to shrink for a variety of reasons, chief among them the intolerance of the president and his inner circle. Crackdowns on public protests, silencing of independent media and civil society, and marginalization of political opponents and critics, including through the use of force, became increasingly common. In order to act with the utmost impunity, Ghani maintained a facade of accountability through the ministries while monopolizing state functions by creating parallel institutions at his own office. Since last August, the Taliban, undeterred by any prospects of accountability, have further centralized the structure by removing the subsidiary units of the Arg, Afghanistan’s presidential palace, and have instead directly utilized the formal government bureaucracy to consolidate their power, implement their extremist views of what an Islamic society should look like, and silence any voices of dissent. In other words, the centralized political and governance institutions of the former republic were unaccountable enough that they now comfortably accommodate the totalitarian objectives of the Taliban without giving the people any chance to resist peacefully.

    What lies ahead

    The Taliban, who claimed to represent rural Afghanistan, have further oppressed and marginalized Afghans outside Kabul as their core members continue to settle in the now dual capitals of Kabul and Kandahar. The Taliban’s thinking about governance based on a rigid interpretation of religion and ethnonationalist politics, as much as it evolves in practice over time, has further centralized political decision-making and economic resources in the hands of a few. As economic resources become more scarce, wealth will be controlled by those who hold political power at the highest levels.

    This will only deepen the drivers of fragility and conflict, including poverty, exclusion, and discrimination. With drought likely to become an annual occurrence by 2030, the financial and banking crisis set to continue for the foreseeable future, and the economy expected to keep shrinking, people across Afghanistan are becoming increasingly vulnerable. Moreover, the unsustainably large but still inadequate humanitarian aid budget, which has offered a minimal lifeline to the country, will be in danger of getting smaller in light of recent security developments that further limit the parameters of international engagement with the regime. The United States has reportedly withheld talks about the possible unfreezing of Afghanistan’s central bank assets held by the U.S. Federal Reserve and the U.N. Security Council has not extended travel exemptions for 13 Taliban leaders. These developments also mean that potential foreign investment, even from friendly partners of the regime, such as China, will likely take a long time to materialize. The overall impact of all of this will be to push Afghans across the country further and deeper into cycles of economic deprivation and political instability with substantial implications for health, education, and human rights, especially for women and children.

    However, as much as centralization allows the Taliban to consolidate power in the short run, it equally makes its long-term survival unlikely. The group led a highly decentralized, mobile insurgency where local commanders oversaw the war in their areas in whatever way they saw fit. That was vital to withstand the republican army and its partners, as well as recruit non-Pashtun commanders in the north, which later proved fatal to the republic. But now they are struggling to transform from a decentralized insurgency into a centralized government and what were previously strengths have become weaknesses. Commanders such as Fasihuddin, once trusted with complete authority, are expected to give up their autonomy and obey orders. The regime is also facing difficulties integrating key battlefield leaders into its new official structures in an appropriate way, as the appointment of Qayum Zaker to an arbitrary assignment managing the resistance in Panjshir illustrates. These trends stemming from the centralization of power will eventually push away those who were key to the Taliban’s success — similar to how President Ghani’s exclusionary politics alienated the republic’s natural allies. The Taliban have long prioritized their cohesion over any other political objective. Now, unable to govern and unwilling to share power with other political forces, the centralized regime’s disintegration becomes increasingly inevitable — and arguably has been expedited — as it fails to incorporate even its own senior political and military leadership into decision-making processes.

    Sayed Madadi is a Reagan-Fascell Democracy Fellow at the National Endowment for Democracy’s International Forum for Democratic Studies and a Nonresident Scholar with the Middle East Institute’s Afghanistan and Pakistan Studies Program. You can follow him on Twitter @MadadiSaeid. The opinions expressed in this piece are his own.

     Read at Middle East Institute