OPINION Vol.1, No.1 June 2013 - National Defence University

Proposed Transport Corridors / Routes. Pakistan, Afghanistan and Tajikistan have agreed on a
route of 1,306 kilometers connecting Pakistan with Tajikistan through Afghanistan from Chitral.
Revival of old Silk Route was first propounded by ex Prime Minister Benazir Bhutto during visit to
CARs in mid 1990s. However, lately US has reinvigorated the proposal by terming it as ‘New Silk
Road’ (CARs – Afghanistan – Pakistan – India). As regards rail network, the transport links with
Central Asia need to be supplemented by the railway. The Pakistan – India link can be extended via
Afghanistan to CARs. Pakistan has already announced development of rail link from Chaman to Spin
Boldak.
Challenges to Economic and Energy Cooperation
Political and Security Factors. The most important among the factors which inhibit inter-regional
cooperation relate to the political and security issues including prolonged political tension between
India and Pakistan and war like conditions in Afghanistan.
Constraints to Trade and Transit. Besides political and security factors, few identified constraints
to trade and transit can be divided into three categories i.e. Physical Constraints including
insufficiently developed inter-regional infrastructure and high infrastructural development costs. The
Policy Constraints are restrictive trade policies, different transit and tariff policies of countries in the
region and lack of proper legal and regulatory systems. Similarly inadequately harmonized trade and
customs procedures, insufficient port capacity on the borders, lack of transparency and corruption,
poor border management, large informal or illegal sector, a weak private sector and absence of vital
services 28 are some of the Institutional Constraints.
Emerging Favourable Environment
Economic Development and Trends. Despite the above constraints, the economic development and
certain trends, both at the global and regional levels, create favourable environment to strive for better
inter-regional cooperation. The quest for economic development and rising energy / trade pursuits has
forced the governments to look for new avenues. 29
Indo-Pak Economic Relations. In the recent past there have been series of discussions between the
two countries to improve bilateral trade arrangements.
Pak-Afghan Cooperation. Over $2.5 billion 30 trade between Afghanistan and Pakistan and
replacement of Afghan Transit Trade Agreement (ATTA) of 1965 with Afghanistan-Pakistan Transit
Trade Agreement (APTTA) in 2011 are the significant indicators in improved Pak-Afghan
cooperation. Under new agreement, Afghan goods are being exported to India.
Economic Cooperation Potential
The analysis of economic dynamics of both the regions brings forth a number of prospective areas of
cooperation. CARs are energy rich, whereas South Asian countries like India and Pakistan, and also
Afghanistan are energy-deficit. Tajikistan and Kyrgyz Republic have large surplus generation in spring and
summer and supply deficits in winter due to lack of fossil fuels. The export of electricity could be a key driver
of their economic growth. Rising demand for coal in India and its availability in Central Asia create another
area for trade. Collaboration in the field of cotton with Uzbekistan can be beneficial for South Asian
countries.
REGIONAL PEACE AND SECURITY
Afghan Situation. Afghanistan, the main hotbed of conflict over the past several decades, is the main source
of regional instability. The peace and stability in Afghanistan remain elusive in the foreseeable future due to
host of factors.
Situation in South Asia. The deep rooted hostility between India and Pakistan is a key reason behind
prevailing regional insecurity in South Asia. The quest for regional stability is further shadowed by Indian
attitude towards other smaller nations of South Asia.
Internal Dynamics of CARs. When becoming sovereign in 1991, the newly independent states of Central
Asia proclaimed as their strategic goal the transformation into free democratic societies based on market
economy and integrated in the international community. However, confronted with the authoritarian legacy of
the former regimes, with the challenges of simultaneous multi-faceted transition in political, economic and
social areas, and with waves of instability resulting from violent ethnic, religious and social conflicts, CARs
have had enormous difficulties in making headway towards these goals. 31 The rise of Islamist forces in the
OPINION Vol.1 No.1 4 June 2013