Trade, Aid, and a Self-Reliant Afghan Economy

At first glance, a chart depicting Afghanistan’s annual Gross Domestic Product (GDP) figures since 2001 could be characterized as a series of peaks and valleys. Though the imagery may be fitting with the country’s landscape, probes into why Afghanistan’s year-to-year growth is erratic necessitates a deeper look into the country’s trade practices, as well as the management and deployment of foreign aid.

While incessant conflict with the Taliban certainly plays a formidable role in deterring investment, it is far from the only ailment afflicting Afghanistan’s path toward economic independence. As one example, foreign aid still accounts for nearly 77% of the government’s budget, and that includes an assumption of a best-case scenario involving collected revenues.

Furthermore, Afghanistan’s increased engagement in global trade has yet to materialize any substantial capital investment, which is necessary for industrializing the economy and building a sufficient manufacturing base. The country’s trade deficit has also widened considerably in the last decade by nearly 25%.

Such conditions suggest that even in the event of successful intra-Afghan talks, the country’s development agenda will still rely heavily on substantial foreign aid inflows, with the World Bank estimating between $6-8 billion USD will be needed annually over the next several years. In order to best facilitate the use of that aid, both donors and the government will need to be selective in projects that incorporate broader participation from Afghans and put the country on proper footing for self-reliance.

To achieve this, Afghanistan’s economic policy will have to focus on three key prerequisites. These include an emphasis on export-led growth, diversification of trade partners and investors, and improvements toward tax revenue mobilization.

Export-Led Growth

Export-led growth is a strategy that concentrates on boosting the export potential of domestic businesses that specialize in certain goods and services. Assuming a comparative advantage for developing these certain products exists, the revenues and profits earned from exports are then to be reinvested in the country to expand production capacity and nurture the development of supporting industries. This method of economic policy was principally responsible for the rapid expansion of East Asian economies and remains in favor today among emerging markets across Southeast Asia and Sub-Saharan Africa.

For Afghanistan, exports have historically been limited to agricultural products (mainly fruits) but given the country’s vast reserves in minerals and natural resources, the opportunity for industrialization will be contingent upon proper management of the extractive sectors. The benefits would include the absorption of labor from agriculture as well as a diffusive investment that would support infrastructure projects and generate demand for businesses and employment across the manufacturing and services sectors.

In the past, several donor-led initiatives focused on the establishment of “resource corridors” have been put forth but have been shelved as a result of insecurity and dampened foreign investor sentiment on the country’s prospects. Nevertheless, should intra-Afghan talks prove fruitful in resolving the insecurity, it would clear the most significant obstacle for the extractive industries.

Diversification of Trade Partners and Investors

Currently, Afghanistan ranks 173rd out of 190 countries on the World Bank’s Ease of Doing Business, an index that uses indicators including the time required for permits and licenses, access to credit, and the enforcement of contracts, among other criteria to gauge the business/investor climate. As a result, inflows of foreign direct investment (FDI) in the country remains scarce and concentrated among a handful of nations, most of them neighbors. Afghanistan’s export destinations are in a similar position, with India and Pakistan accounting for a combined 75% of all Afghan exports. Imports are more diversified in terms of sourcing, but the trade imbalance has been costly in the absence of any progress on an import substitution strategy.

While the debate on the harmful effects of a trade deficit remains unresolved, curbing Afghanistan’s import reliance could help it bolster homegrown industries. Agricultural products and textiles makeup a significant portion of Afghan imports, yet domestic potential already exists in these sectors. Hence, these sectors, if prioritized, could rank among one of the simpler transitions available to the country’s economy.

The textile industry is also a common and vital source of employment for female labor and allowing wider participation by females can pay dividends by providing additional economic security for households, a boost in consumption, and accelerated growth via a larger labor pool for the country.

Ensuring quality over quantity in FDI is commonly overlooked by recipient nations, particularly those endowed with natural resources. Oft-cited criticism of foreign investor practices include employing or awarding contracts to the investing nation, with little to no benefit for the domestic workforce or businesses. Stipulating stringent quotas for the contracting and employment of Afghan businesses and nationals is a crucial tool that can be leveraged when vetting potential foreign partners.

Given Afghanistan’s strategic (and volatile) location, diversifying the country’s trade partners and investors remains in its best interests for long-term growth. This directly ties in with a balanced foreign policy based on non-alignment. Given the competing interests of regional hegemons like Russia, China, India, and Pakistan, the ability for Afghanistan to deftly balance external relations without committing to a single side ensures sovereignty and self-reliance.

Mobilization of Tax Revenue

At present, the shortfall between the Afghan government’s annual budget and its revenues stands at roughly $8.5 billion USD, which is covered by foreign aid. A gradual paring of that figure will necessitate a more efficient collection and allocation of tax revenues. In tandem with taxes, Afghanistan’s role as a transit hub for pipelines and infrastructure that transports resources (like natural gas) is another opportunity to improve revenues.

In a scenario where peace is established, ensuring that the Taliban’s arbitrary tax regime is dismantled in favor of a government collection system will be vital to increasing government revenues. In addition, the ability to safely access and incorporate swathes of Afghan territory under the government’s jurisdiction will present new opportunities to improve the fiscal situation of the government and locals. However, the notion of a “peace dividend” will not be without costs. As exhibited by US troop withdrawals throughout the Obama Administration, any additional drawdowns could once again trigger economic consequences for businesses that engage with or rely upon foreign forces.

It remains pertinent that the government learns to wean itself off of foreign aid and prove to its donors it is capable and sophisticated enough to budget and allocate aid funds efficiently. Doing so would contribute positively to what will be a long, but viable, route toward genuine independence and lasting stability.

– Arman Sidhu

Do Cryptocurrencies Provide Opportunities for Terrorist Organizations?

Bitcoin and other cryptocurrencies were once considered as fantasy rather than a viable method of exchanging goods and services, but today many companies — even countries like Saudi Arabia — have adopted forms of cryptocurrency. Even average citizens have embraced the use of Bitcoin in everyday transactions.

In Lebanon, where COVID-19 has exacerbated the economic crisis and caused drastic inflation, there has been a demand for cryptocurrency as a stable alternative to the Lebanese pound and a possible means to avoid government defaults. The Lebanese government has no regulatory laws regarding cryptocurrency, but has issued warnings against its use — the Lebanese Central Bank advocates for its use to be illegal. However, independent crypto-traders estimate the Lebanese population trades between one to five million USD a month using cryptocurrency.

As the utility of cryptocurrencies rise in countries like Lebanon, Hizballah and other terrorist organizations may adopt its use. Additionally, cryptocurrencies are coming under scrutiny lately for their perceived anonymity and how terrorist organizations could exploit the features of digital currency to bypass sanctions and current counter-terrorism finance initiatives. But what are the threats of cryptocurrency to counter-terrorism efforts, is there evidence of their use, and do they provide real utility over traditional finance methods to terrorist organizations?

Cryptocurrency offers terrorist organizations a possible route for anonymous, secure, and reliable streams of funding. They offer anonymity that hackers have used for years as a part of ransomware cyberattacks, as sending, receiving and converting money to Bitcoin does not require the use of a legal name or address. This feature, in combination with a virtual private network (VPN) to hide the user’s true Internet Protocol (IP) address, gives hackers and others anonymity in accessing funds that are not routed through banks.

Cryptocurrency, especially bitcoin, provides security of transfer through encryption and blockchain technologies that drastically limit the potential for hackers to steal funds or the recipients information. While reliability would depend on the donors to terrorist organizations, the characteristics of cryptocurrency provide some incentives to those donors.

The benefits are also incentivizing states to invest in cryptocurrency. Iran, facing economic pressure from US sanctions, has seen a surge in bitcoin popularity — much like Lebanon. While bitcoin is technically illegal in Iran the state is reassessing the ruling and is likely to change. Additionally, Iran is currently planning for the creation of a national Iranian cryptocurrency to bypass US sanctions and embargos.

Yet with all the positive aspects of cryptocurrencies, the evidence suggests that terrorist organizations are not using them on a large scale. Hamas uses some bitcoin but it uses far less cryptocurrency than the average for the civilian population of Gaza. And while Randa Slim (the Lebanese-American director of diplomacy programs for the Middle East institute) thinks that Hizballah has the most to gain from adopting bitcoin usage, there is no evidence to suggest they have begun using it.

The RAND Corporation has examined why non-state actors have not emphatically embraced cryptocurrencies, but subsequently issued a warning for future developments. RAND agrees that while there is an increasing need to understand the full potential of cryptocurrency exploitation by terrorist organizations, that concerns over the abilities of cryptocurrencies to enable terrorist organizations, have yet to materialize. This is because cryptocurrency does not yet provide additional benefit to the areas where terrorist organizations place the most importance in procuring funds than their traditional methods.

The table below (sourced from the RAND report) shows the levels of importance for the most common aspects of terrorist finance, of which security is of the most importance. While cryptocurrencies like Bitcoin are relatively secure, RAND posits that current cryptocurrency options do not currently provide the security that these highly scrutinized organizations need. However, future improvements to bitcoin could make it appealing to terror organizations for the select use of fundraising.

Source: Rand Corporation

As the economy evolves, and includes continually improving cryptocurrencies, so does the potential for terrorists to adopt the technology. Technological advancement cannot be prevented, but policy that creates regulation and oversight of cryptocurrencies with international cooperation of the intelligence community and law enforcement agencies are crucial steps towards preventing cryptocurrencies from enabling terrorist organizations.

– Cameron Hoffman

  • Clarification: According to Bitcoin vocabulary, it is acceptable to use an uppercase B when discussing the concept or network and a lowercase b to describe a unit of account. This is relevant to the textual differences in the above analysis.

Indo-Afghan Ties and the Prospect of Peace

As one of several external stakeholders that have taken a keen interest in the affairs of Afghanistan, India ranks among one of the more reticent partners of the Afghan government. In spite of losing their shared border over 70 years ago, due to the results of the Partition of India and the subsequent First Kashmir War, Indo-Afghan ties remain strong. India’s steadfast support for Afghanistan’s state entities has evolved considerably, from recognizing and supporting Afghanistan’s contentious Cold War-era governments, to aiding the present-day Islamic Republic of Afghanistan.

In return, India’s status as the largest regional donor and supporter of Afghan statecraft and reconstruction has endeared the country to numerous Afghan leaders. Beyond provisions of material support and developmental assistance, India’s higher education institutions, which counts former President Hamid Karzai as an alumnus, remains a popular destination for Afghan students, many of whom return to positions in the nascent public and private sectors. Two of India’s most prominent military academies, namely the Indian Military Academy, and the National Defence Academy, enroll a significant intake of Afghan soldiers, aiding in the capacity-building process of Afghanistan’s security forces.

Behind India’s soft power investment in Afghanistan is a desire to retain existing influence in Kabul, while curbing similar ambitions by arch-rival Pakistan. Unlike the other original sponsors of the Mujahideen, such as the United States and Saudi Arabia, Pakistan’s stake in Afghanistan did not wane at the conclusion of the Afghan Civil War.

Instead, the five-year period of Taliban rule from 1996-2001 showcased the potential potency of a Pakistan-friendly government in Afghanistan. Seminal events like the 1999 hijacking of an Indian Airlines flight by a pro-Taliban group based in Kashmir, accelerated India’s coalition-building of anti-Taliban forces, which featured a mix of both internal and external entities.

In addition, throughout their tenure, the Taliban hosted numerous anti-Indian organizations, several of which have been linked to Pakistan’s Inter-Services Intelligence (IS) agency. The most notable of these organizations was Lakshar-e-Taiba, the terrorist group that would later be responsible for the 2008 Mumbai attacks. Given the proximity of Kashmir to Afghanistan’s northeast borders, the notion of a contiguous corridor that could supply Indian Kashmiri separatists with training, safe haven, as well as material and logistical support from Pakistan and/or the Taliban is a crucial security concern for India.

Memories of the subsequent damage inflicted upon Indian interests during the Taliban’s tenure continues to inform New Delhi’s present-day objectives. While its contributions to the Afghan state have enlarged in scope, India still remains fixated on curtailing Pakistan’s influence, which is primarily wielded through the relationship between the Taliban and Pakistan’s security establishment.

Although portraying Afghanistan’s situation as a microcosm of the Indo-Pakistani rivalry may come off as a slight toward Afghan sovereignty, alignment between the goals of India and the Afghan government remain strong. India remains one of the more active participants in development and infrastructure projects designed to boost Afghanistan’s connectivity and increase its participation in the global economy. The Iranian port of Chabahar is one example, as the port remains a key conduit of trade between India, Afghanistan, and Iran, through a route that deliberately avoids Pakistan.

Furthermore, Indian Prime Minister Narendra Modi has sought a more vocal and active role for India’s engagement in foreign affairs, with developments in Afghanistan at the forefront of this initiative. Indian officials have been frequently sighted and quoted during pivotal moments in the Afghan peace process, including during the US-Taliban deal that was signed in Doha, Qatar earlier this year.

In its most recent observations of the Afghan peace process, India’s foreign policy establishment has tempered expectations, preferring to instead focus on the schematics of a deal signed between the Taliban and the Afghan government.

In particular, the unresolved question of how the Taliban will integrate into Afghanistan’s civil society is pertinent to India’s posturing. In the event that the Taliban and its members convert to willing democratic participants, India’s interests would then evolve into preventing radical elements and individuals from ascending to the highest levels of government. A scenario in which Afghan political parties begin to orient themselves as strictly pro-India or pro-Pakistan remains plausible and would likely fuel further competition between the two powers, with the concomitant effect of tainting Afghanistan’s political culture.

The spectrum of possibilities in a potential peace deal presents newfound challenges to the Indo-Afghan relationship. India’s reluctance to engage with the Taliban stems from its characterization of the group as a stalwart client of Pakistan, rather than an independent entity.

Thus, any peace deal outcome that grants some level of legitimate political authority to the Taliban would present the greatest threat to India’s strategic ambitions in Afghanistan, which includes fostering closer political and economic ties with Central Asia and the Gulf region. As a result, the next few phases of the intra-Afghan peace process, set to resume in Doha, will carry significant political, economic, and security ramifications for India’s broader foreign policy strategy.

– Arman Sidhu

A Road to Everywhere: Afghanistan’s Role in the Belt and Road Initiative

Nearly seven years after it was first announced, China’s Belt and Road Initiative (BRI) continues to endure a barrage of setbacks that have called into question the feasibility of President Xi Jingping’s signature economic plan. Prior to the COVID-19 pandemic, criticism of the BRI included accusations of “debt trap diplomacy”, environmental concerns, and the lack of benefits for local populations in the form of no-bid contracts and job opportunities.

Furthermore, among the defining moments of the BRI’s short history was the fallout associated with Sri Lanka’s Hambantota port, a maritime port that was largely constructed and financed by China. At a cost of nearly $1.5 billion USD, the port struggled to generate the level of financial return needed to service the debt to China. With few options available, the Sri Lankan government was compelled to enter an agreement with a partially state-owned Chinese firm, which granted the company a 99-year lease on the port, essentially ceding Sri Lanka’s control and day-to-day management of the port.

The Hambantota debacle has increased the level of scrutiny paid toward other BRI projects, which span parts of Asia, Africa, Europe, and South America. Yet, for many developing nations, the BRI presents an intriguing opportunity to access the requisite financing to establish and upgrade infrastructure networks.

For a landlocked country like Afghanistan, overland infrastructure remains a core priority within the government’s economic agenda. Incessant conflict has eroded what was once Afghanistan’s natural advantage: its geographic location. By constructing transportation networks, such as roads, railways, airports, etc., Afghanistan would be well-positioned to benefit as a conduit for transporting physical goods and natural resources in a region that features some of the fastest growing economies in the world.

Thus far, attempts to include Afghanistan in the BRI have been frustrated by the vagaries of the country’s internal conflicts. The results of the peace talks between the Afghan government and the Taliban will provide investors, donors, and state entities with the necessary signals and guidance needed before launching additional economic programs in or near territories contested or controlled by the Taliban.

In particular, the Sino-Afghan Special Railway Transportation project is one of a handful of infrastructure initiatives that could bolster Afghan exports of minerals and agricultural products to China, via Central Asia. The ability to transport high-value input commodities, such as copper and rare-earth elements, safely and securely, is crucial to China’s decision-calculus when choosing where to invest in Afghanistan.

Supplementing the BRI is the “Made in China 2025” plan, which envisions Chinese production evolving toward advanced industries like semiconductors, which necessitate consistent access to a specific set of raw materials, many of which Afghanistan is heavily endowed with.

A favorable outcome in the peace talks with the Taliban could also extend Afghanistan’s BRI participation to its southernmost regions, where it shares a border with Pakistan. As one of the more active nations in the BRI, Pakistan has pinned its hopes of economic revitalization through the China Pakistan Economic Corridor (CPEC), a microcosm of the broader BRI strategy.

Valued between $50-$60 billion USD, CPEC’s portfolio of massive infrastructure projects includes power and transport projects, the establishment of special economic zones (SEZs), and Gwadar Port, the deepest seaport in the world. Extending Afghanistan’s connectivity with CPEC projects would be pivotal to expanding export destinations for Afghan goods. This in turn could create a productive business climate in Afghanistan, one that is conducive for job creation and economic diversification away from subsistence agriculture.

However, reversing Afghanistan’s status from a bottleneck to a transit hub will involve far more than the accession of policymakers in Kabul or Beijing. The looming question regarding the prospect of lasting peace is still the greatest hurdle in Afghanistan’s reconstruction plans. The Taliban’s tendency to intentionally target infrastructure or other foreign projects has given pause to plenty of investors in sectors like oil & gas, construction, and mining.

Even if peace can be attained, the track record for foreign investment in Afghanistan is littered with corruption, graft, and cronyism as a consequence of poor institutional capacity. In addition, other stakeholders and key Afghan partners such as the United States and India continue to view the BRI with suspicion, and the prospect of a trilateral partnership between Afghanistan, China, and Pakistan is likely to arouse concern.

Lastly, in the wake of the COVID-19 pandemic, the appetite for Chinese-led investment has hit a significant snag. Local attitudes toward the BRI have become polarized, and vocal opposition has risen as a consequence of China’s lending practices, which are often characterized as predatory, and its management of projects on the ground, which have gained a reputation elsewhere for environmental destruction, forced relocation of residents, and an unwillingness to engage local contractors and/or labor.

In an optimal set of circumstances, Afghanistan’s BRI projects could help restart growth and diffuse benefits to the local population. Yet, given the murky track records of both the BRI and Afghan investment at-large, the consequences of overpromising and underdelivering could enable greater unrest, without providing tangible benefits for the broader Afghan population.

– Arman Sidhu

Unlocking Afghanistan’s Resource Wealth: Three Obstacles for the Mining Sector

Throughout its history, Afghanistan’s most notable advantage has been its geographically strategic location. The country’s proximity to trade routes and markets in the Middle East and throughout South, Central, and East Asia enabled an unparalleled level of connectivity in global commerce. However, decades of instability as a result of constant warfare, have disrupted many of Afghanistan’s naturally endowed advantages. Adding to this tragedy is the unfavorable timing of Afghanistan’s woes, which coincided with the era of globalization.

An alternative narrative of the country’s history in the past 40 years may have heavily favored Afghanistan as a transit hub for moving goods and fulfilling global energy demands between supply-rich states near Afghanistan’s north and eastern borders and booming emerging markets like India and China, both of which consume a considerable amount of commodities.

Yet, Afghanistan’s potential value to the global economy goes beyond just its geography. Among the sectors that could prove to be a catalyst for reconstructing the country’s economy is the nascent mining sector. The involvement of foreign actors in Afghanistan’s conflicts over the past 40 years, beginning with the Soviet Union in the late 1970s throughout the 1980s, began to unveil the extent of Afghanistan’s mineral wealth.

Through geological surveying, and cutting-edge methods such as remote sensing, the Soviets, and later, NATO member-states, have added clarity to the staggering level of wealth residing in Afghanistan’s mines. Valuation attempts have resulted in estimates that range from $1-$3 trillion USD in untapped mineral deposits. In addition to standard precious metals (gold, silver, platinum, etc.), Afghanistan also contains vast reserves of high-quality gemstones, rare earth elements (REEs), and minerals that are critical for industrial inputs, such as copper, iron, lithium, and uranium, among others.

While such commodities offer considerable advantages for economic development, the number of case studies that exhibit the downsides to resource wealth are plentiful, particularly in the developing world. Afghanistan is no exception to this phenomenon, which is most often referred to as the “resource curse”. To ensure proper and equitable development of Afghanistan’s mining sector, a number of obstacles, each of which present their own unique set of challenges, must be resolved to encourage domestic and foreign investment in this sector.

Obstacle #1: Securing Peace & Stability in Resource-Rich Regions.

The need for establishing rule of law and implementing peacebuilding measures is an intuitive requirement for any nation’s economic development, especially when recovering from long bouts of violence. With nearly 46% of Afghan territory in contention, or controlled directly, by the Taliban, ensuring safe passage within resource-rich provinces takes precedence among the sector’s prerequisites.

Although peace talks between the Afghan government and the Taliban remain fragile, the past two years has featured gradual progress between both parties. In relation to the mining industry, these talks will necessitate bargaining on both sides.

The Taliban is believed to generate nearly $300 million USD in revenues through illegal mining, serving as a lucrative revenue stream for the group. Additional grievances cited by legitimate mining firms include extortion and theft by militants and local warlords. For its part, the government will likely need to cede some level of control over the mining industry, whether that includes awarding formal rights to the group, and/or designing a mechanism for how mining proceeds will be used in Taliban strongholds.

Obstacle #2: Accountability & Transparency from Stakeholders

At present, the Afghan government loses hundreds of millions of dollars as a result of the status quo, which has dampened investor sentiment and discouraged local contractors from expanding mining operations. Assuming security assurances can be guaranteed, the next step would be to enact governance measures that bring much needed reform of existing mining laws and strengthen the oversight capacity of Afghanistan’s Ministry of Mines and Petroleum.

The tendency for corruption and graft to flourish within extractive industries is a recurring theme throughout resource-rich nations. To ensure adequate levels of oversight, the Afghan government will have to take further steps toward formalizing the sector. Doing so would ensure transparency during the auction and bidding process for mineral rights, providing a more leveled playing field for all participants, particularly local small and medium enterprises (SMEs). An emphasis on awarding tenders to SMEs would have the dual advantages of encouraging growth and competition, while minimizing the risks and liabilities associated with larger foreign mining firms.

In addition, greater accountability is required from the government with regard to how (and where) the proceeds from royalties and mining rights are funneled. One oft-cited solution toward this end includes providing an equity stake and royalties for local communities surrounding an active mine, which can be used toward developmental objectives in areas like infrastructure, education, and health.

Obstacle #3: Diversification and Avoiding the “Resource Curse”

In spite of its abundance of mineral wealth, the extractive industry is best understood as a catalyst toward nurturing growth throughout the Afghan economy. With over 70% of the population reliant on the fickle agricultural sector, job growth in mining is but one avenue for absorbing labor from rural communities. As exhibited by countries like South Africa, Nigeria, Angola, and the Democratic Republic of Congo, an overreliance on natural resources poses daunting challenges that subject such countries to the whims of the erratic global commodities market.

Thus, revenue generated from mining activity would be best allocated toward upgrading infrastructure and improving the provision of public services. In tandem, these efforts could jumpstart activity in the manufacturing and services sectors, fomenting the conditions for private sector-led growth while expanding government services in rural areas adjacent to the mines.

Resolving these concerns is critical for Afghanistan to harness their bountiful mineral wealth. While rare, successful case studies of resource-rich nations do exist, and an emphasis on transparency, fiscal prudence, and sound economic policy remain the critical components of successful natural resource management.

– Arman Sidhu

 

Eid Ceasefire Offers Cautious Optimism for Peace Process

After enduring a spate of violent attacks carried out by the Taliban over the past two months, Afghanistan received a much needed respite from conflict during the Eid al-Fitr holiday. In recognition of this sacred time, the Taliban announced a 3-day ceasefire, marking the third instance of a temporary truce since 2018.

In its announcement, the Taliban’s leadership commanded its fighters to refrain from launching any offensive operations, but did not rule out the possibility of needing to defend against assaults carried out by government forces. Such sentiments signal that the level of trust between both parties remains shaky, threatening any momentum that has been garnered over the past two years toward a substantive and inclusive peace deal.

Like previous periods of ceasefire, this round proved to be short-lived, with recent attacks attributed to the Taliban following the expiry of the ceasefire. Nevertheless, such measures are considered integral to facilitating the ongoing talks between the Taliban and the Afghan government, who are currently meeting in Kabul while fighting continues unabated.

In spite of the challenging circumstances regarding the conflict, and the sudden emergence of the COVID-19 pandemic, the Afghan peace process has shown resilience through 2020, with promising signs of headway emerging both between, and within, both parties.

For its part, the Afghan government responded to the Taliban’s unilateral declaration with its own peace offering, by promising to accelerate the release process for imprisoned Taliban fighters. The significance of such a move cannot be understated, given that terms for the prisoner release remain a contentious sticking point within the government. As well, the release of Taliban prisoners by the Afghan government has also been utilised as the primary tool for encouraging the Taliban’s initiation of a ceasefire, demonstrating that the Afghan government is willing to take the ‘next steps’ towards intra-Afghan dialogue.

Furthermore, a power-sharing arrangement cinched earlier this month between President Ashraf Ghani and Abdullah Abdullah will undoubtedly strengthen the government’s legitimacy, while improving its position of leverage during the reconciliation process. Prior to the deal, both Ghani and Abdullah had claimed victory in last year’s presidential election, even after an appeal process had declared Ghani as the victor.

The political feud and rivalry had even gone as far as encouraging Abdullah to form a parallel government, precisely at the time when the Trump administration had signed a conditional peace deal with the Taliban, putting the ball in Kabul’s court to advance the peace process. As a result of the difficulties associated with managing a pandemic and brokering a peace deal, resolving the internal crisis of leadership within the Afghan government has proven advantageous by presenting a united front between the two factions of leadership in their talks with the Taliban.

Having resolved their differences, the terms of the deal designate Abdullah as the government’s lead in talks with the Taliban, leaving administration of state affairs to Ghani. As a conservative politician of mixed heritage with historical ties to the Mujahideen movement, Abdullah has assiduously crafted an image and narrative of his willingness to negotiate with the Taliban.

In recent months, Abdullah has often critiqued Ghani’s approach as impractical, believing that the imposition of demands as a prerequisite to intra-Afghan dialogue has only dissuaded the Taliban’s participation.The Ghani-Abdullah rivalry had also been used to advance the Taliban’s rhetoric, by describing Ghani’s government as fractured and unrepresentative of the Afghan population.

Despite their previous discrepancies, both Afghan leaders can be seen to understand the importance of working together on behalf of taking the peace negotiations with the Taliban further. By agreeing to the ceasefire and to the subsequent release of an additional 2000 Taliban prisoners, the Afghan government has shown its willingness to continue peace talks with the Taliban.

However, it is not only the Afghan authorities who have taken significant steps towards satisfying the Doha Deal, but also the Taliban who have demonstrated their great commitment to the peace talks through the recent initiation of the ceasefire arrangement over the course of the Eid holiday period. Even though violent clashes continued directly after the ceasefire concluded, the hope for finally reaching peace has not entirely vanished, as both parties have clearly indicated a higher degree of willingness to move forward with the Doha Deal and collaborate towards establishing a more stable Afghanistan.

– Arman Sidhu and Anja Apfel

Terrorism or Testing: Will COVID-19 Reduce Counterterrorism Efforts?

In the wake of the global pandemic, concerns about public health dominate the political sphere, enough so that issues related to public security and defense against terrorist activities no longer appear in the headlines. As government expenditures to divert economic damages and bolster public health measures increase, defense budgets are likely to experience cuts to balance the budget. Such a response makes sense given the scope of stimulus packages and widespread unemployment.

Countries like France, Spain, and the United Kingdom decided to withdraw all troops from Iraq because of the risks posed by COVID-19. This raises the question: Does there remain a need to combat terrorist activity in the same way in a post-quarantine world?

Government officials, researchers, and the Islamic State themselves say yes. Lawmakers and researchers warn that terrorist actors are increasingly threatening global security as they have exploited the pandemic not only to increase their operations, but also their influence in countries with weak governments struggling to confront the virus.

For instance, Gilles de Kerchove, the counterterrorism coordinator for the European Union, in stressing the importance of not detracting from security spending said that, “we must prevent the one crisis from producing another.” Additionally, terrorist activity and attacks in the Middle East and Africa increased in recent months despite the pandemic. ISIL is using the virus’ crippling impact on the West and its online newspaper “Al-Naba” as a method to recruit more fighters to its cause. Further, it is increasing its militant activities in Egypt’s Sinai Peninsula. Likewise, Boko Haram has used the global focus on the pandemic to launch multiple attacks against government forces in recent months, killing well over a hundred soldiers in Nigeria alone.

To date, neither the United States nor European governments signaled that they plan to leave the Middle East entirely (though as previously mentioned some US partners are leaving Iraq), but the pandemic provides both an excuse and economic incentive to do so. States with large military expenditures like the US will likely be able to continue their operations and smaller countries may not be able to afford these expenses even if they wanted to remain engaged in the region.

US policymakers face a tough decision as the de-facto leader in military engagement in the Middle East. Will the US continue the strategy of deep engagement, utilizing drone strikes as they have in the past, for the purpose of countering Iranian influence and terrorism in the region? Or will the US pursue an “America First” policy that focuses on rebuilding the US economy, which has been President Trump’s major policy objective and source of support? While either outcome could be normally expected, the aftermath of COVID-19 is likely to be anything but normal.

Likely, the US will pursue a sort of middle ground.  The level of activity in the Middle East will decline in some areas (especially helpful to this goal is the US withdrawal from Afghanistan), but remain constant in areas deemed critical security threats.  For example, the US is unlikely to limit funding for countering Iranian aggression, but find other budgets to cut to focus on the economy.

While the retreat of foreign forces from the Middle East, like the US, is unlikely to be met, the future of military engagement in the region will undoubtedly change as world leaders confront the lack of resources to continue their past strategies. Countries with little to lose and smaller levels of commitment will be more incentivized to withdraw and benefit from the continued engagement of the world’s military leaders on some level.

– Cameron Hoffman

Drone Technology and Its Malicious Use by Terrorists

Emerging technologies may offer recognised benefits, but they pose threats to national security also. A case in point are unmanned aerial vehicles (UAVs) — one of the most common examples of dual-use technology.

Drone technology refers to a pilotless aircraft whose operation is based on a combination of technologies, such as artificial intelligence and computer vision. Although initially developed for military purposes, drones now receive wider attention and use.

Over the past few years, UAVs have been used by various businesses, including refining companies, online marketplaces, broadcasting services, airlines, construction and logistic companies in addition to governmental and defense organisations. Therefore, from timely delivery at peak time and geographical mapping of inaccessible regions to border control surveillance and supervision of unreachable military bases, drones are proving to be highly beneficial for a broad range of sectors.

However, alongside the aforementioned businesses and governmental organizations, drone technology has had a beneficial effect on terrorism as well. More specifically, newly affordable prices and growth in popularity have attracted the attention of a number of terrorist organisations, including Hezbollah and the Islamic State of Iraq and the Levant (ISIL).

Hezbollah has paved the way for the extensive use of drones by non-state groups. Indeed, the Lebanese militant group is reported to have the longest-standing and most advanced drone program of any non-state actor. It is believed that most of its drone fleet was supplied by Iran which has been developing its drone program since its war with Iraq.

Over the past decade, Hezbollah has made a great deal of progress in the acquisition of highly sophisticated UAVs. They have exploited them to gain useful intelligence and to intercept poorly encrypted Israeli drone feeds. Consequently, the Hezbollah drone program poses a constantly growing threat not only to Israeli security, but also to other non-state combatants.

Similarly, the Islamic State’s use of drones is developed to the extent that it can be described as a ‘drone program’. However, ISIL differs from other terrorist groups in that it has exploited drone technology in a more creative manner. Focusing more on acquiring simple, cost-effective and replaceable devices, they managed to build their own drone fleet.

Another point that sets apart the Islamic State’s drone program is the emphasis put on drone imagery. Rather than just weaponizing drones to conduct an attack, ISIL has strategically used the ability to capture aerial photos that later become central components of its propaganda machine.

In the light of the significant and rising threat posed by the possession and malicious use of drones by non-state actors, several companies were prompted to come up with technologies able to bring them down. These include electronic fences which block drone signals and drones equipped with nets which can capture enemy drones. However, additional measures should be implemented in order to prevent terrorist groups from having access to such technologies.

It is clear that alongside the tremendous benefits, drone technology also involves a direct threat to national security. Although they were first developed for military purposes, the ever-increasing commercial use of drones has also enabled terrorist groups, such as ISIL and Hezbollah, to acquire or even to manufacture their own drone fleets.

– Vasileia Kioutsouki

 

Possible Consequences of the Israeli Unity Government’s Annexation Plan

On May 18, Israel swore in a new unity government in which Benjamin Netanyahu will continue as Prime Minister until he is succeeded by Benny Gantz in 18 months. The power-sharing deal resolved a political deadlock that lasted for more than 500 days.

While the stated goal of the new government is to fight the coronavirus pandemic, the two politicians also agreed to press ahead with a plan to annex parts of the occupied West Bank as early as July 1 — a move that could have serious consequences.

It is likely that the annexation would deal a serious blow to the already stalled peace process between Israelis and Palestinians. In January, President Trump presented his Middle East peace plan which proposed an independent Palestinian state and recognition of Israeli sovereignty over its settlements in the West Bank area. This was perceived by Netanyahu as a green light for annexation of these territories.

The plan was immediately dismissed by Palestinian President Mahmoud Abbas, stating that Jerusalem and Palestinian rights are not for sale. Subsequently, the Palestinian Authority cut all ties, including security, with Israel and the United States.

Palestinian leaders reject the legitimacy of the Israeli move to annex the settlements, which are seen as illegal by most of the international community. Abbas promised to take measures against Israel and the US in response to the annexation, including cancelling all agreements signed with Israel. Therefore, it would be fair to assume that the annexation would further deteriorate Israeli-Palestinian relations, diminishing prospects for peace. In addition, this move could lead to an escalation in violence.

Hamas, Palestinian Islamic Jihad (PIJ), and other groups could carry out more attacks in response. In a reaction to the Trump peace plan, Hamas stepped up its rocket attacks from the Gaza Strip and hailed ‘acts of resistance’ throughout the West Bank, including a car-ramming attack in Jerusalem.

Both Hamas and the PIJ called on President Abbas to cut all ties with Israel and for an increase in resistance activities. President Abbas even invited Hamas and PIJ officials to a meeting to discuss possible reaction to the Israeli plan. Azzam al-Ahmed, a senior Fatah official, stated that the Palestinian leadership devised a plan, noting that Israel and the US would bear the full consequences in the aftermath of any moves towards annexation. These developments suggest that a rise in violence could be one of the responses.

Calls for resistance activities could motivate lone actors to carry out attacks. Recently, as the swear in of the unity government neared, an increased number of violent attacks were carried out by Palestinians. On 12 May, an Israeli soldier was killed by a rock thrown from a rooftop and, only a few hours later, a Palestinian tried to stab an Israeli security official at Qalandiya checkpoint. On 14 May, the day when the new government was supposed to be sworn in before Netanyahu asked for a three day postponement, a Palestinian deliberately drove his car into Israeli troops, injuring one. These attacks suggest that because of the annexation, more individuals could resort to violence either in a response to calls from Hamas and others or out of grievance. However, the annexation could also lead to a more organized form of resistance.

The annexation could mobilise enough people to start a third Intifada (popular uprising). In the case of the first Intifada, an Israeli vehicle struck two vans carrying Palestinians, killing four of them. A second Intifada followed Ariel Sharon’s visit of the Temple Mount, together with 1, 000 riot police, and the subsequent killing of six Palestinian demonstrators the following day. Although there were arguably more causes for the two Intifadas, the situation escalated for an extended period and the described events were merely triggers, it might be argued that the annexation would be of such significance, compared to the previous two, that it could start a third uprising. Moreover, Palestinians could be supported or even called upon to do so by the Palestinian authorities as a response to the annexation.

All in all, it seems likely that the new Israeli unity government will face serious consequences and a possible rise in violence if it proceeds with its annexation plan. The peace process would not only arguably experience a major setback, but annexation could have security implications for the region as a whole.

Furthermore, difficulties stemming from the coronavirus pandemic could be significantly aggravated by any potential uprising. The government should thoroughly assess the possible costs and benefits of the annexation and try to keep the peace process alive in order to avoid unnecessary crisis and violence.

Moreover, as the settlements are perceived as illegal by many, the international community should step in and pressure both parties to refrain from actions that might be destabilizing for both Israel and the region. Otherwise, the long-lasting conflict might experience yet another escalation which could in turn affect the already unstable Middle East.

– Ondřej Palička

Countering Extremism with Sports: A Look at Martial Arts

The inclusion of sporting elements in preventive measures and deradicalization programs has not been treated with sufficient academic rigour, but the notion has been touted at the highest levels of intergovernmental organizations. Accordingly, initiatives that attempt to shift the use of combat sports as a means of extremist or terrorist recruitment into pathways for peaceful mentorship should be examined as well.

Why Is Sport Important?

Analysts focused on the complexity of why youth radicalize often conclude that the most vulnerable struggle with matters of identity and thus related issues of belonging, purpose and connection. These variables are often coupled with insecurity at home, economic marginalization and mental health as obstacles that young adults are unequipped to solve by themselves. While sport cannot singly resolve these issues outright, it remains a key factor in youth empowerment and thus wider social development in communities.

Empowerment from sport is intrinsically linked to lessons learned through practice and sensations of accomplishment. For instance, programs that include sport in some format highly focus on the development of confidence, self-esteem, self-control, teamwork and the continued breakdown of cultural stereotypes. Each of these characteristics and their maturation are extremely beneficial in both prevention and deradicalization efforts.

In both cases, youth and young adults come to acknowledge their roles in community settings, pursue beneficial connections, and build a sense of self that prepares them for fruitful opportunities. Indeed, United Nations Security Council Resolution 2419 adopted on June 6, 2018 acknowledges, “the growing contribution of sport and culture to the realization of development and peace in the promotion of tolerance and respect as well as the contributions sport and culture make to the empowerment of youth and women, individuals and communities as well as to health, education and social inclusion objectives.”

As hinted in the resolution, there is evidence that the most effective sport programs include access to educational classes, vocational training and employment, and opportunities to volunteer in the community. In such an arrangement, the connection between psychological and physical health of youth is addressed and in turn, reflective in the state of their communities. Strong youth contribute to community resiliency.

Nonetheless, such frameworks can only be facilitated by the involvement of reliable role model figures — teachers, coaches, volunteers — that create atmospheres of mentorship. Figures such as those that excelled in sport as well as individuals involved in their respective communities can share their personal experiences of integration, success and warn that extremism is a flawed, dangerous path. Mentorship relationships between coach and student provide yet another layer of connection that can potentially pinpoint if a youth seems atypically troubled or disaffected, especially in communities targeted by manipulative extremist recruiters.

Sport unites in a fun environment with holistic objectives. As governments typically focus on intelligence and law enforcement to counter radicalization, the inclusion of sporting programs is often a secondary — or even tertiary — afterthought prompting initiatives to seek out government funding, donations from the private sector and non-governmental organizations (NGOs). It is generally considered that those youth most at risk of radicalization and recruitment are of meager socio-economic means; therefore, sports that provide the best dividends with as little investment, but requiring of strong effort and passion, are preferred.

Combat Sports and Radicalization

In recent years, law enforcement has made the link between combat sports (martial arts) and radicalization. For example, a sudden interest in hand-to-hand fighting styles or techniques to subdue an opponent have been mentioned as possible indicators of nefarious activities once taken into context with other factors. Some scholars have gone as far as to say that the topic has been previously neglected from prior study.

It is a simple conclusion as to why this phenomenon materialized as extremist groups and terrorist organizations thrive on the recruitment of fighters or those willing to carry out operations. The psychological stimuli created by striking sports can be easily exploited if not taught alongside an integrated positive lifestyle. Those already trained in the fighting arts are prepared and those that need to gain such skills can be easily taught as well.

Much attention has been paid to far-right extremist movements’ involvement in the promotion of mixed martial arts (MMA) tournaments and the participation of some perpetrators in said sports. However, those of Islamist persuasion also include combat sports in their general training and preparation, as evidenced by Daesh propaganda videos. In one particular case, “physical fitness and strength” was identified as the first stage in training to fight for the cause. The terrorist organization instructed its adherents to learn Krav Maga in one of its generally panned handbooks disseminated across social media.

Some analysts conclude that the inclusion of “power sports” (boxing, martial arts, weightlifting and wrestling) lead to anti-social behaviors due to an emphasis on fighting and strength. As a consequence, they challenge the value of martial arts in preventative and rehabilitative settings. Nevertheless, it must be argued that the fact remains that these sports are already attractive to youth and touted by those with disreputable purposes, so it would be beneficial to flip the negative and cynical messages into those that imprint positive overtones on young practitioners.

Fighting Against Radicalization

There are viable examples of associations and non-profit movements that have unified combat sports with preventative measures. Fight for Peace is the most visible organization at the international level and includes holistic programming (sport, education, employment training), but countering violent extremism is not one of their primary objectives, though their services are undoubtedly useful in this context.

The German Association of Martial Arts Schools Against Violent Extremism (DKVE) acts a touchstone project that unifies other schools across the country to train coaches as mentors. As part of their instruction, mentors are specially trained in psychology and the ability to spot any signs of the radicalization process taking root. Rather than the critique that such sports provoke negative behaviours, students are taught to de-escalate violence, embolden self-esteem and carry these lessons to all aspects of their lives.

Further, Not in God’s Name is a Vienna-based non-profit and fight club that aims to create tolerance amongst diverse ethnicities and combat radicalization through martial arts. NIGN contends that while education is extremely important, activities like sports encourage integration for youth, especially for those whose native culture seems incongruent with their new homes. “They train together, they practice. Jews, Christians, Muslims. We have here Albanians with Serbs, we have here Jews with Chechens,” explained founder Alexander Karakas. Mentorship from those who originate from immigrant communities and share their stories to youth that consequently look up to them plays an important role in their activities. Besides sports and mentorship, NIGN employs an active social media presence to counter the prolific activity of extremist groups.

As a last example, it should be noted that various combat sports associations from taekwondo to judo embraced April 6 celebrations on the UN International Day of Sport for Development and Peace. Many athletes contributed to the ‘White Card Campaign’ organized in unison with Peace and Sport; an independent organization headed by Prince Albert II of Monaco. The campaign seeks to build “solidarity and peace through our community and share the good will with the large sport movement”, in the words of the International SAMBO Federation (FIAS).

In conclusion, sport provides ample opportunities for outreach in various communities affected by violent extremism and radicalization. Programming can be amended to suit particular community needs and resources at hand for youth in question. The role of combat sports may have been usurped by extremist organizations, but there are realistic examples that their inherent lessons in self-esteem, self-control and mentorship can be reasonably shifted towards preventative objectives.