Pakistan should lobby the international community in providing humanitarian assistance to Afghanistan. The best way to do so is to work closely with China, Russia, Iran and the Central Asian States.
Some Afghans living in Pakistan have reportedly purchased millions of US dollars from Pakistani currency markets – mostly to hoard them. To discourage these purchases, as well as the smuggling of dollars, the State Bank of Pakistan has now made it mandatory that anyone buying more than 500 dollars a day must provide his or her biometrics so that the authorities can track and trace them.
Foreign currency is not the only commodity being smuggled to Afghanistan. Wheat and wheat flour are also going illegally to the other side of the Durand Line — just as they have always done in recent decades. The smuggling of Urea fertiliser to Afghanistan is also being reported. Pakistan produces the fertiliser using subsidised gas so that its retail price in Pakistani markets is almost half of its international price. This makes it a lucrative proposition for smugglers to buy it from Pakistan at the local price and sell it in Afghanistan at the international price. Consequently, Urea shortages are being reported from several parts of Pakistan ahead of the wheat sowing in November.
Uncertainty and volatility in Afghanistan and its possible ripple effects in Pakistan are another reason why foreigners are reluctant to invest in Pakistan. The suicide attacks and other terrorist activities being carried out by the Islamic State’s Khorasan chapter are adding yet another deadly element to the region’s already volatile mix of unrest and terrorism.
The situation leaves Pakistan with very few policy options so it must tread carefully. It needs to maintain a high-stakes balancing act: desist from antagonising Afghan Taliban so much that they start fomenting trouble through their proxies and allies in Pakistan, and prove to the rest of the world that Pakistan is as much opposed to Taliban’s extremist and conservative policies as the rest of the world.
This is not going to be easy. Already some leading American media outlets—such as the Wall Street Journal and Bloomberg — are urging the US government to use its influence to make International Monetary Fund (IMF) assistance to Pakistan more difficult and to maintain financial restrictions on it through the Financial Action Task Force (FATF). They argue that Pakistan’s support for the Afghan Taliban has been a major reason for the latter’s ascendency to power in Kabul. Not being able to either get the IMF assistance or get off FATF’s grey list is something that Pakistan can ill afford given the fragility of its economic and financial sectors. Pakistan must persuade the Afghan Taliban that they need to form an inclusive government and respect the global human rights standards.
Yet, Pakistan can ignore the humanitarian crisis brewing in Afghanistan only at its own peril. Having to live through a harsh winter without any external assistance, many Afghans will be left with no choice but to leave their homeland and migrate to Pakistan. Any large-scale exodus of Afghans to Pakistan will not only make the management of the Pak-Afghan border extremely difficult, but it could also lead to an influx of terrorists masquerading as refugees into Pakistan. Unvaccinated Afghan refugees can also bring new variants of the Covid-19 virus to Pakistan. Pakistan should both lobby and try not to lead the international community in providing humanitarian assistance to Afghanistan. The best way to do so is to work closely with China, Russia, Iran, and the Central Asian states—the countries that share borders with Afghanistan.
Some quarters suggest that Pakistan should go “beyond the humanitarian approach” to help Afghanistan. They say the two countries should allow barter trade so as to avoid the use of hard-to-come foreign currency. They also put forward the idea that Pakistan should print Afghan currency, open the branches of its banks in Afghanistan and provide both human and financial resources to the Afghan Taliban to run their government in a smooth manner.
To do so without jeopardising its relationship with the United States and its European allies is going to be hard. Jeopardising our relationship with the US would mean inviting more economic hardship. One way of getting out of it could be to chalk out a minimum common agenda— in consultation with China, the United States, European Union, Russia, and Iran—of economic and humanitarian engagement with Afghanistan.
Earlier this week, China reaffirmed its supporting role in Afghanistan. Iran has hosted a foreign ministerial conference of Afghanistan’s neighbours to chalk out a regional strategy for dealing with Afghanistan’s emerging situation. Such regional developments can take the onus off Pakistan to act as the sole saviour of the Taliban government. Balancing acts are never easy in statecraft. The challenge this time is to balance our Afghan policy with our economic policies.