EDITORIAL: By now it is pretty clear that, contrary to what everybody believed throughout the American war in Afghanistan, Pakistan is indeed sincere to a peaceful settlement and stands to gain the most from an end to hostilities in the neighbouring country. As such, Islamabad has lent all support possible to both Washington and Kabul as they looked to wrap up this long and ugly war. It agreed to release a few senior former Taliban commanders in its custody so that they could give the peace process the push that it needed at that early stage, even used what little influence it had left with the militia to get it to agree to peace terms, and offered to help in any way in the reconstruction phase that will follow intra-Afghan talks currently underway in Doha. It will also quickly recognise any power-sharing government that is formed and help arrange an honourable return for the millions of refugees that fled to Pakistan over the decades. But while Pakistan is eager to enhance bilateral trade it doesn't always understand what to do about all the requests about facilitating Afghan businesses' operations here. Representatives of the two countries agreed to solve 16 out of 21 issues related to trade and transit in Islamabad on Tuesday, and promised to meet in Kabul soon to discuss those that are left, but the usual concerns of Afghan businessmen trying to set up shop in Pakistan will be harder to address.
Pakistan is always open to Foreign Direct Investment (FDI) just like any other country, of course, provided it is brought here by serious, legitimate investors and helps the country's economy, especially the job market. And since most of Afghanistan's so-called businessmen are warlords who amassed their wealth during one or more of the country's recent wars, and sources of their money are suspect more often than not, they don't tend to make the most desirable investors for most countries. Experience has also shown that once they are allowed to bring their money here, they are mostly interested in buying real estate to rent out and especially shopping plazas where their refugees can then set up outlets for small profits, so their investments hardly ever rise above the retail level or do much about creating jobs for locals here. So it is natural for any country to think twice before opening its gates to such inflow of money.
A far better way to approach this issue would be to work on trade first, help create genuine entrepreneurs in Afghanistan, and then make way for direct investment. Right now what counts as Afghanistan's business elite would fail any credible financial institution's risk management and due diligence tests because much of their money comes from foreign intelligence services, arms deals on the black market, or the country's notorious drug trade. Not too long ago the Central Intelligence Agency (CIA) of the American government admitted that it passed on millions of dollars, practically in plastic bags, to the Karzai government to buy out whoever it needed to and to get done whatever it needed to get done. Many Afghans that entered the ranks of the super-rich because of that money practically hate Pakistan to begin with, so it will be a while before Islamabad is comfortable with Afghani investors here.
Needless to say that the two countries have had their fair share of falling out over the years, especially since the onset of the so-called war against terrorism. Successive Afghan governments have directly blamed the Pakistani government and military for almost all of their problems, often going to the extent of asking the Americans to sort us out. Pakistan however has always been clear that the war would only end when the American and Afghan governments talk to the Taliban, something that the rest of the world realised after wasting two decades on fighting, and was also the most helpful of all players in eventually getting everybody to the negotiating table. Binding both countries economically, of which direct investment is a very big and crucial part, is the natural way forward. They should therefore work on creating an atmosphere of trust so the process can be carried forward amicably. A carefully worked out step-by-step approach is advised rather than putting everything on the table at once.
Copyright Business Recorder, 2020
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