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Books on Afghanistan


Update No: 119 - (26/01/12)

Who wants to negotiate?
In December rumours that a deal between Washington and Taliban over the opening of a Taliban political office in Qatar started circulating; even Taliban sources confirmed that the deal was very close. The reaction of the Afghan government, however, was far from positive: Kabul withdrew its envoy to Qatar in protest at a deal which left Kabul out. At about the same time the Taliban circulated a document which reaffirmed their desire for an inclusive Taliban government, opening the door the participation of Hazaras and other minorities, which are not known for lending much support to the Taliban. The Taliban seem not to be taking negotiations too seriously, or at least seem to have determined that in the short term strengthening their political legitimacy brings greater benefits, which could also help increasing their negotiating leverage later. In particular, they do not seem to believe in a deal with the Karzai government.

The Taliban document interestingly criticises Afghanistan’s neighbours in a relatively fair way, implicitly criticising Pakistan for having supported only Pashtuns, alongside Iran for having favoured the Shiite minority. The statement can be read as a new effort of the Quetta leadership of the Taliban to set a role for itself which goes beyond the Pakistani plans. Weeks after the Taliban statement was circulated, a wave of bloody attacks on Shiite mosques, crowded because of the religious celebrations of Ashura, killed tens. Afghans read this as a Pakistani message that unless Pakistan is granted a key role in negotiations, it could unravel any effort to negotiate and precipitate the country in an Iraq-like civil war. That’s for the Taliban’s dreams of inclusiveness, the attacks seemed to mean to say. Now that Washington finally seems to have made up its mind concerning the opening of the Qatar office, it turns out that neither Kabul nor Islamabad like that, although for different reasons. The road to a negotiated settlement is a tortuous one. The Karzai government is trying to influence the talks, or maybe scuttle them imposing demands like a preliminary ceasefire, which the Taliban will not accept.

Kabul accelerates tender for mining concessions
In the second week of December, the Afghan government opened the tender for four new concessions, also announcing that from 2012 onwards there would be five such tenders every year. A Polish company appears to be interested in one of the gold mines being tendered. In 2010, the government would like to put forward for tender an oil field, a gas field and a large iron ore deposit. The government plans calls for 25% of GDP to come from the mining sector by 2016, which most observers judge as being wildly ambitious, considering the complete lack of infrastructure. The Aynak mine, tendered in 2008, will still wait years to see its railway built, if at all.

Speculation on Karzai’s future
Despite Karzai’s announcement earlier this year, that he would not stand for re-election in 2014 (he would not be allowed by the Constitution anyway), a recent intelligence leak suggested that Karzai might be secretly planning to stay in power after having the constitution modified. Karzai is allegedly planning to hold a Loya Jirga for the purpose of changing the constitution, but not in order to allow a third term for himself, but to create a prime minister position, which Washington has for a period advocated as a necessity. Karzai would then take over the prime-ministership, in order to make his experience still available to the country and steer it through the post-western withdrawal turmoil from 2014 onwards. The presidency would then be taken over by a representative of the Tajik opposition, presumably an option which would allow the Tajiks to swallow down the pill of Karzai staying in power and facilitate the consolidation of the presently very fragmented coalition government. Names being mentioned are parliamentary speaker Qanuni, vice president Fahim (who is however already in very poor health) and governor of Balkh Atta Mohammed. Qanuni is said to have expressed an interest in the plan, as has Fahim, while Atta reportedly rejected the idea. However, many even within Karzai’s Pashtun allies would rather see the Karzai family gone; some minister are jockeying to emerge as the natural candidate to the succession.

Forecast 2012
While perhaps this is not to be a decisive year per se, 2012 in Afghanistan will show whether there is any substance to the multi-pronged negotiations efforts, at what speed western disengagement and will also provide some clearer indication of whether the Karzai regime can make it on its own. It will also be a test to business confidence, as the government tenders more and more mining concessions.

The debate in Washington is whether the transition to Afghan security leadership should be accelerated and be completed by the end of 2012 already. President Obama is in favour, as that would allow him to enter the re-election campaign without the embarrassment of American casualties and an open-ended operation still going on in Afghanistan. The Americans would in this case bail out of combat operations by the years’ end, maintaining only a back up force for emergencies and mentoring teams to training the Afghan security forces.

What could spoil Obama’s plan is some embarrassing Afghan failure; however, even the Taliban do not seem keen on testing the resolve of the Afghan security forces just yet. Maybe they have decided to wait out the Americans, while preparing themselves for the next phase and do their best to infiltrate the Afghan government.

The Afghan economy is likely to start showing signs of weakness as western expenditure, chiefly in the form of military contracts and purchases, is becoming drawn down. The price of property and rent for luxury accommodation in Kabul was already falling in the second half of 2011. Capital flows abroad could accelerate further, even if the UAE, the favourite destination, right now does not offer the same opportunities for investment as before.

The negotiating effort is likely to continue amid ups and downs, with all sides engaging in it without too much conviction: too much remain uncertain about the future for negotiations to proceed smoothly.

Forecast and summary 2011
Every year in Afghanistan is declared to be the decisive one; perhaps 2011 qualifies better than its predecessors. The western debate about disengagement/escalation ‘should be’ clarified once and for all in 2011. The Europeans have already made clear that their disengagement starts in 2011 regardless; the Americans still seem to hesitate. The American army defends its honour in Afghanistan, not wanting any lingering suggestions of it being another Vietnam, and will lobby to continue fighting and trying to gain the upper hand, at least until the budget cuts season comes up in Washington. Then they will be asked whether they choose to sacrifice the war in Afghanistan or some of the high technology programmes aimed at some future intercontinental war.

The fight between President Karzai and the Electoral Commission over the legitimacy of the new parliament elected in 2010, highlights how fragile the political environment remains. The electoral results leave little room for Karzai’s influence in the parliament and he has been coercing the Electoral Commission (through the Attorney General) to change the results. The majority within the commission sympathises with the opposition to Karzai, or with those elements of the ruling coalition who would not mind seeing Karzai downsized. The mixed composition of the Commission was the result of the 2009 Presidential Election turmoil, as an attempt to reassure that the 2010 elections would have been fairer. The ‘peace agreement’ collapsed over recriminations of who cheated most! Karzai sees a reduced Pashtun presence in the parliament as a development which might dramatically reduce his ability to obtain support from the parliament on key issues. In January the confirmation of the results was postponed once again, but the majority of the unofficially elected MPs have decided to inaugurate the parliament against Karzai’s opposition. If elections were supposed to bring peace and harmony, they have not succeeded.

Meanwhile President Karzai is convinced that the Americans will eventually dump him and will continue trying to build his own power base and establish relations with the countries of the region. He will have to make the system over which he presides, a little bit better at managing resources and more effective, if he wants to survive politically. That is going to be a challenge because his supporters now are largely motivated by the predatory opportunities which international intervention and war offer. The relationship with the Pakistanis remains difficult, despite Karzai’s try in 2010; the Pakistanis still think they hold all the winning cards and will continue pushing for a settlement in their favour. The attitude of the rest of the region will continue to rotate around the Pakistani attitude.

President Karzai believes that he needs patronage and corruption in order to keep his ruling coalition together. He might be right or not, but his practices are less and less acceptable in Washington. Karzai managed to stall the investigation of the US-supported Crime Task Force, but his freedom of manoeuvre is getting more and more constrained. Now the US grand jury is investigating one of Karzai’s brothers, Mahmud, alleging graft, tax evasion and other illegal activities. At the same time the Kabul bank affair is back to haunt Karzai. The IMF has examined the issue and determined that the government has done too little to fix the problem to deserve the IMF’s help. Much of the foreign aid to Afghanistan is now at risk as donors are up in arms against the failure to develop any banking regulations, even after the Kabul Bank debacle. This at a time when the Afghan government is actually demanding that a larger share of external aid be channelled through the government itself, as opposed to being spent directly. The country's second largest private bank, Azizi Bank, was also in the eye of the storm by July, as investigations were taking place concerning some of its investments. The Bank was rumoured to have fallen not much short of the collapsed Kabul Bank, in terms of unsavoury practices. President Karzai is certainly very nervous: he recently banned American advisers from the Central Bank, where they had been advising their Afghan counterparts for years. The head of the Central Bank is now a fugitive in the US, after the government tried to arrest him on the accusation of being involved in the Kabul Bank scandal, but more realistically angry over his naming in the parliament of the president's and vice-president's brothers as key beneficiaries of Kabul Bank's ‘largesse’. The Kabul Bank scandal is linked to the decision of the IMF to withhold a US$70 million loan, which is only a small portion of the aid being received by Afghanistan, but enough to unnerve the government. The World Bank estimates that 97% of the GDP is linked to either external aid or to the expenditure of the foreign military forces based there. Afghanistan’s finance minister is now trying to convince donors to replace those US$70 million, although not very successfully for the time being.

Experience suggests that Karzai still has a chance of having it his way, as Afghanistan is too high a profile conflict for Washington to risk too big a crisis. With Holbrooke dead and Ambassador Eikenberry replaced, the enemies of Karzai in the Department of State are weakening, while the military, more inclined to cooperate with Karzai regardless, seem stronger after the American mid-term elections. But Karzai is taking a risk, as Washington itself and its European partners might not be able to ‘sell’ the bottomless pit which the Afghan operation has been becoming, to their parliaments anymore. Karzai is also trying to convince his Western backers to support him in his on-going dispute with the parliament, but they have little appetite for this. The parliamentary elections were heavily rigged, but having accepted the process the Westerners cannot now backtrack.

ISAF faced in March renewed criticism by Karzai, because of a string of incidents involving civilian casualties. Gen. Petraeus relaxed the rules of engagement when he took over ISAF’s command and intensified air strikes as well as Special Forces operations. Now Karzai says that Petraeus’ excuses are no longer enough and later even called for ISAF to stop operations. Although he did not follow up on his request (made during a public meeting) with a formal demand, it is the first time that he has gone this far; with the transition to Afghan command to start soon, there might be important repercussions in terms of operational planning. Karzai moreover is upping the stakes in his ‘soft’ confrontation with Washington, by imposing for the first time conditions on the concession of permanent rights for US bases in Afghanistan. He argued that such rights would have to be based on a comprehensive peace settlement, taking into account the interests of the neighbouring countries as well. Finally, Karzai has been recently arguing that he wants to see ISAF’s Provincial Reconstruction Teams shut down, because they function as a parallel government and therefore undermine his own influence. ISAF, by contrast, sees PRTs as essential to its military effort.

Following strong messages from Washington that in the future, funding for the Afghan armed forces would have to be contained at under US$6 billion, Afghan Defence Minister Wardak stated in October that Afghanistan can do with US$5 billion a year of cash to support its armed forces (police and army). The problem is that what the Americans want is for the Europeans to shoulder a substantial share of that amount. For the time being however, there seems to be little enthusiasm among NATO countries to contributing. In the meanwhile it seems clear that the morale of the Afghan army is pretty low: desertions are increasing and fewer soldiers renew their contracts when they expire. In the police, the leadership of Minister of Interior Mohammadi, once a popular man, is now being questioned. His behaviour resembles more that of a colonel than of a minister. He micromanages operations, including personally appearing in the field, to handle riots and terrorist attacks.

Karzai’s western allies have other reasons for being upset. The government continues to block corruption investigations, including those where plentiful evidence had been gathered by its NATO allies. Recently the former governor of Kapisa province, accused of collaborating with the insurgents, was saved from prosecution by such an intervention. The production of opium is up again this year, after last year’s drop. The 7% increase is not a massive one, but occurs despite a poppy disease that has damaged the harvest. Finally, Western companies are not even winning the potentially lucrative contracts for exploiting Afghanistan’s natural resources. The first oil and gas exploration contracts were recently awarded and were won by China National Petroleum Corp. This has sparked some resentment among other bidders, such as Tethys Petroleum, a British company, who allege that CNPC was unfairly favoured. Allegations of bribe taking and favouritism already emerged at the time of the awarding of the contract for the Ainak copper mine, years ago.

The political landscape is getting more complicated because Afghanistan too is getting affected by rising food prices. The ‘Egyptian wave’ has not arrived as this country is quite insulated from the Middle East, but demands for pay rises can already be heard among government officials and contractors. The rising oil prices will also stoke trouble. The government pay-bill already exceeds its revenue by several times and can only be afforded because of external support. Fortunately for Karzai the disgruntled Members of Parliament and the failed parliamentary candidates are too busy exchanging accusations against each other, and if they do mobilise crowds these will be their relatives and kin to support their claim to a seat; there is little genuine civil society that could move against Karzai. The big issue for Karzai is whether his alliance with Vice-President Fahim can hold; Fahim has been good in mobilising Tajik support behind himself, through the distribution of posts and government patronage. However, his greater than expected success in undermining support for opposition leaders like Dr. Abdullah and Qanuni is turning him and his circle into a potential danger for Karzai: the President’s ‘divide and rule’ method does not work if Fahim comes close to monopolising Tajik support. The parliamentary dispute is just one of many signals that Karzai is uneasy about Fahim’s growing influence; Karzai’s closest supporters do not spare criticism of key allies of Fahim, like Minister of Interior Bismillah Mohammadi. Few believe that the coalition and indeed the system as such could survive in the event of a Western disengagement, which instead looks more and more likely. Even if in recent months Washington has been downplaying the forthcoming downsizing of the US military contingent, the Department of Defense budget request for 2010 points at an average US troop level of 98,000, well below the current numbers.

In July the tribunal appointed by Karzai to look into the issue of the 2010 elections fraud has annulled the elections of 62 Members of Parliament, throwing the body into disarray. The 62 who will replace them, on the other hand, will be indebted to Karzai and therefore his position will be strengthened, but many question Karzai's right to appoint the tribunal in the first place. Inevitably, more political instability is to be expected.

The opposition, which once represented a strong majority in the new parliament, has started fraying even before ‘the 62’ MPs are forced to abandon their seats and be replaced. 33 MPs defected to the pro-Karzai faction, which is now slightly stronger than the opposition, with 106 MPs versus 104. Karzai's position is also being strengthened by Washington's decision to make peace with him. The new American ambassador from Washington, Ryan Crocker, has been instructed not to try to drive Karzai, but to support him instead and let him make his own decisions. Karzai reportedly showed appreciation. Ambassador Crocker's predecessor, Eikenberry, had been very critical of Karzai. However, negotiations over a long-term Afghan-American strategic partnership are not going well. The real issue is not a permanent US military presence in Afghanistan, but the Afghan desire to acquire control over detentions and night raids by ISAF. The Afghan requests for tight timelines on these issues is not acceptable in Washington.

Washington’s plans for continuing escalation in Afghanistan have started meeting significant hurdles in 2010 and in January 2011 a new one appeared. The Europeans and President Karzai himself now question the need for continuing to rapidly expand the Afghan armed forces, when outstanding issues of quality and capability obviously exist. The Europeans are also worried by the cost of all this effort in a time of growing budgetary constraints. NATO is also achieving little in terms of convincing its European member countries to send more trainers and mentors to coach the Afghan armed forces. The shortfall increases instead of falling, because the size of the Afghan forces expands, increasing the need for mentoring teams. Disagreements also exist on how to distribute the proposed increase to 378,000 personnel between army and police. The Americans in the meanwhile are sending another 1,400 troops to keep some sense of momentum going; they have widely campaigned in the press arguing that the Taliban are being weakened; however support for the war in the US continues to fall according to the opinion polls.

The forthcoming decision over de-surging by the Obama administration has been one of the main focuses of the debate in the media. Until last month, Gen. Petraeus seemed to be positioning himself against a significant withdrawal; more recently however he seems to have accepted the idea of a more substantial troop draw-dawn. Perhaps he received messages from Washington that it has to happen anyway, or it was when he had heard that he is going to lead the CIA. It seems now clear that some non-combat troops will go first, but during the second half of 2011 some combat units will also be withdrawn.

The departure from the world stage of Osama bin Laden might have been wildly greeted in the USA, but not everybody has good reason to be happy about his physical elimination. The Afghan Taliban will not miss him so much as a friend, but certainly see their leverage in potential negotiations go down, because they can no longer offer to drop any relationship with him as a reward for American acceptance of the Taliban. Paradoxically, however, those most worried by the killing of Osama are America’s allies in Afghanistan, who fear that now American disengagement cannot be delayed much longer. American public opinion was increasingly wary of the war before Osama’s killing and will be even warier now. How long can the Obama administration lag behind public opinion, plus many believe that Washington was already looking for a way out and now has got it. The leverage of the Karzai administration vis-à-vis Washington is therefore greatly reduced. The Pakistani invitations to Karzai to get closer to China, which were deliberately leaked to the Pakistani press in April, were mainly meant to threaten the Americans and put pressure on them to accept the Pakistani peace plan. However, the very fact that Islamabad felt such an invitation could be plausible, highlights the spreading perception that Kabul and Washington are more and more on diverging paths.

Pakistan’s credibility has certainly been damaged by the raid which killed Osama, but it will take some time to understand how the episode has affected Kabul-Islamabad relations. Recently Karzai had appointed a confidante and known pro-Pakistani, Dawlatzai, as ambassador to Pakistan, a move understood to appease the Pakistanis. Dawlatzai was replaced in the important position of Karzai’s chief of Staff by Khurram, another pro-Pakistani element. But this was all before Osama’s death. At least some lull in the preparation of talks should be expected. Pakistani-sponsored terrorist attacks have intensified in recent weeks across Afghanistan, suggesting that the Pakistanis still want to close business on their peace plan this season. In substantial terms, therefore, little might have changed.

On the negotiating front, Karzai has been sending mixed signals after Rabbani’s killing. He first stated that he would try again to negotiate with the leadership of the Taliban, whom he described as powerless. He would, instead, directly negotiate with Pakistan, which, he says, controls the insurgency. That was interpreted as a concession to Islamabad, but shortly thereafter Karzai travelled to Delhi and signed a strategic partnership agreement with the Indian government, which is unlikely to have pleased the Pakistanis! Then later in October he stated on Afghan public television, that in the event of an American aggression towards Pakistan, he would lead Afghanistan to take Pakistan’s side. He also described Pakistan as a ‘brother country’, which must have disconcerted more than a few, given his previous tirades about Pakistan’s aggression against Afghanistan.

President Obama announced on 22 June that he wants to withdraw all the 33,000 troops sent to Afghanistan during the surge, 10,000 will leave by the end of 2011. This is more than the military and hawks in general were advocating. The US military were insisting to extend the troops surge, claiming that another 15 months would have made the difference in terms of defeating the Taliban, or at least consolidating the gains that they claim to have made since early 2010. However, even within the military almost nobody believed that President Obama would postpone the beginning of the withdrawal; the military seems more intent on covering their back and preparing the ground for justifying a disappointing outcome, than on arguing seriously for staying on. More realistically, some generals are advocating a slow drawdown that gives them more time to sort out the Afghan security forces and weakens the perceptions that the Americans are ‘giving up,’ within Afghanistan and the region. Indeed the most dangerous aspect of the decision is exactly that it will confirm the locally held view that the Americans were never going to stay and that their patience was running out, hence the need to work out a modus vivendi with the Taliban. In the longer run, disengagement is becoming more and more a concrete option for the Americans. Already two Republican hopefuls, Romney and Huntsman, have declared themselves in favour of a withdrawal; the Republican base has not been very supportive of their statements, but they reflect the shifting mood among the American public. If the Republicans are increasingly disinclined to stay, one can imagine what the mood among the Democrats must look like. Defence Secretary Gates declared that the US no longer seeks permanent military bases in Afghanistan, but would content itself with joint bases with the Afghan military, presumably within the framework of some training effort. The idea is in this way American presence in the region would be less of an irritant to the regional powers and also more flexible in terms of a possible final withdrawal. In June for the first time, US officials have also acknowledged that preliminary talks with the Taliban are underway.

The assassination in Kandahar of President Karzai's half brother Ahmad Wali dominated the headlines in July. Interpreting the killing is not easy: wasn't Karzai opening up to negotiations? Wasn't he getting closer to the Pakistanis? At the end of June, as the Pakistani army was shelling the Afghan border killing tens of civilians. Several ministers and the leadership of army and border police were advocating a military response. Karzai, however, decided not to respond. Perhaps the killing of Ahmad Wali was an action by the Taliban without Pakistani endorsement, to signal their displeasure at the shape the Pakistani-sponsored deal with Karzai seems to be taking? There are however alternative explanations. The Pakistanis suspect that Karzai once again is just trying to buy time and manipulate all his counterparts, including the Pakistanis themselves. He was dragging his feet at the Pakistani demand that he keep a substantial amount of power in Kabul after a deal, should be offset by the handing over of control over several provinces, including the whole south, to the Taliban. Ahmad Wali, the strongman of Kandahar, was an obstacle to such plans: the Karzais were reluctant to give up their southern fiefdom. The killing of Jan Mohammad Khan in Kabul, shortly after Ahmad Wali's death seems to point in that same direction: Jan Mohammed played a role similar to Ahmad Wali's in Uruzgan province, another one of those claimed for the Taliban by the Pakistanis. Paradoxically, therefore, the killing might be a forceful attempt to clear the way for a settlement. In July members of the High Peace Council reported that the armed opposition is somewhat softening its demands for accessing to preliminary talks; a complete preliminary US withdrawal is no longer a prerequisite. The talk now is of what modifications to the Afghan constitution would be demanded.

Nonetheless President Karzai remained keen on improved relations with Pakistan and is giving more and more space to pro-Pakistani elements within his cabinet. The July resignation of his spokesperson signalled a new victory of the pro-Pakistan party, led by elements close to the Islamic Party and centred around chief-of-presidential staff Khurram. The Karzai-sponsored High Peace Council continues to indicate a Taliban interest in negotiations, but the Taliban themselves deny any opening. The Taliban web sites have issued statements which signal some opening towards Washington, such as a quite explicit invitation to negotiate a 'face-saving' withdrawal directly with the Taliban. What they demand before starting negotiations, is the announcement of an American decision to completely withdraw. What is noteworthy here is the lack of any reference to Karzai and his government. In fact, the Taliban seem keen to avoid any deal with Karzai, whom they do not trust and whose corrupt government is not a very attractive partner in a future settlement. In fact the Taliban are not showing much respect for Karzai and his allies; at the end of July they murdered another of his associates, the mayor of Kandahar, and tried to kill the remaining pro-Karzai powerbroker in Uruzgan.

Also noteworthy the fact that such statements were issued on the web site, not the most appropriate place for anybody wanting to kick off high level negotiations. It might be that what we are seeing is a Taliban attempt to bypass Pakistani patronage. Many Taliban figures privately express irritation for the Pakistani attempt to manipulate negotiations to its advantage. Reportedly Tayyeb Agha, the Taliban contact with the Washington, was threatened by the Pakistanis after meetings with the Americans in Qatar and Germany. The Americans, hurt by the leaks, have now become more secretive and claim that Agha has disappeared and the track gone cold.

The decision to release the statement on the web site might also reflect Taliban frustration at the American failure to engage in a substantive way with Taliban approaches. Although exchanges between Taliban and US diplomats occur on and off, the Americans do not seem willing for the moment being to give concrete answers on any of the Taliban's demands. The release of Taliban prisoners seems to be a matter of discussion at this stage, but the main Taliban demands are the complete withdrawal of foreign troops and, before negotiations even start, an end to the night raids campaign by ISAF.

The assassination of former President Rabbani shook the country because he was seemingly involved in leading the peace effort of the Afghan government through the High Peace Council, whom he was leading. Many wonder what is the rationale of his killing and indeed it is not clear who ordered it -or why? In reality, despite the inflated claims of the High Peace Council, the peace talks had got stuck long before and the Council was only able to contact individuals, mostly of low rank. An attempt to talk to Taliban leader Mullah Baradar, detained in Pakistan, might even have been the most direct cause of Rabbani’s death, as trying to reconcile individual Taliban leaders often sets off reactions. Among Rabbani’s supporters, who are numerous among the Tajiks of Afghanistan, the reaction to the killing was quite emotional, but there was little that they could do. They were already rearming before the killing, with militias now proliferating in parts of northern Afghanistan.

With the attack on Rabbani and the attack a week earlier on the US Embassy, it can be said that the season of talks is over at least for a while. The path the talks were taking did not please the Pakistani services, who felt control over the process was slipping out of their hand. The fading star of negotiations contributes to dampening the popularity of a group of Hizb-i Islami high rank officials linked to Pakistan, who advised Karzai. Reportedly Karzai’s family has moved against them as well, not least because after the killing of Karzai’s half brother Ahmad Wali anybody advocating a deal with Pakistan can only be looked at suspiciously. This despite the fact that some important signals had come, shortly before the killing of Rabbani, that progress was being made on the issue of political talks. At the end of Ramadan, Mullah Omar released a conciliatory message suggesting that the country could achieve an inclusive government and admitting to the fact that some talks had taken place. Shortly later, the Americans stated that they were ready to recognise the opening of a Taliban political office in Qatar. All of this might have been in vain.

While the same idea of negotiations might be sinking, in NATO some rethinking is going on concerning the ‘transition’, that is the assumption of responsibility by the Afghans in the security sector. Now General Allen, the new head of ISAF, is considering transition for some of the difficult provinces first, rather than last, so that any problem which could emerge could be fixed before it is too late. The Afghans, however, resist and are in no hurry to take on responsibility.

Among the countries which have been showing growing interest in Afghanistan in the wake of (expected) American disengagement is Turkey. The Turks have in recent years intervened more and more heavily in Afghan politics, paying political parties and leaders for example, as well sending troops to the country. However, Turkish troops are strictly staying out of the fighting. Considering Turkey's recent past, this is not likely to be due to fear of violence; the Turks are trying to position themselves as mediators in Afghanistan, in rivalry with Pakistan. The Turkish offer of a political office on its soil for the Afghan Taliban created a major rift between Pakistanis and the Taliban, with the latter being keen to accept, and the former fearful of losing control over their clients. The Pakistanis tried to resist the offer, but eventually had to agree to it, re-launching however with the offer to open a similar office in Pakistan as well, perhaps in the hope of making things more complicated or of being able to manipulate the situation to their advantage later. The Turks are also exploring business opportunities in Afghanistan and have shown interest in the mining sector, particularly copper and oil/gas, and in the production of cement.

Afghanistan continues to be subjected to the vagaries of its neighbours, who use carrot and stick to gain diplomatic leverage in the region and elsewhere. Iran has been using the stick. In January: its blockade of fuel tankers at the Afghan border caused a 50% increase in prices, causing street protests against Iran. The Iranians might have been trying to signal to Washington that it can retaliate against fuel sanctions in Iran by creating trouble in Afghanistan. Russia instead is using the carrot these days. Recently President Karzai has invited Russia to rehabilitate a number of old Soviet projects in Afghanistan and the Russian President Medvevev showed interest and expressed readiness. Russia also says it is ready to sell helicopters to the Afghan armed forces, but the Americans, who would be paying for them, say the old models are being overpriced by the Russians and the sale has not been agreed yet.

On the battlefield, the Taliban have been hurt but not mortally wounded; they have lost in some areas and gained in others. They seem to believe that they need to hold on for a few more months in order to demonstrate that the surge has achieved little or nothing and gain diplomatic leverage. The ‘nut’ of how to make the Afghan security forces able to operate independently ‘has not been cracked yet’, a fact that adds to Pakistani and Taliban self confidence.

The informal truce between Pakistanis and Afghans in Kabul was over by February, presumably because the Pakistani services do not see any prospect of Karzai coming closer to their position with regard to negotiations. On the other hand, it is clear that ISAF has gained some ground against the Taliban, mainly because of the better anti-IED technology being used and because of the effectiveness of Special Forces raids. The coming spring will tell us how sustainable all this is. The attempt to kick-start a negotiating process has been stuck for months, as Karzai tries to get the insurgents to talk directly to him, bypassing the Pakistanis, and the latter resist. Much effort is now focused on finding a neutral venue where the Taliban could gather and discuss the matter with representatives of the Afghan government; Turkey has been proposed and the Turkish government has agreed, but the Taliban do not seem entirely satisfied.

The two sides in the war are still gearing up for more fighting this spring. ISAF is planning a new operation in Maywand (Kandahar), while the Taliban are penetrating deeply in the eastern part of Afghanistan, no longer so well guarded, reaching out to the neighbourhoods of the capital. In the west and in the north-west, where ISAF is weakest, the situation is also deteriorating. In other words, the Taliban avoid confrontation in the areas where ISAF has concentrated its efforts, preferring to focus elsewhere. At the same time, however, signals that the two sides are ready to consider talks are intensifying. The Taliban have announced a new decree by Mullah Omar, ordering his men not to attack schools any more. Reportedly an agreement over the reopening of schools in areas under Taliban influence has already been reached between the Taliban and the Ministry of Education. The Minister of Education, Wardak, in a public speech went as far as praising the Taliban for modifying their policies. Sources close to the Taliban report that Mullah Omar will issue more decrees, revising the movement’s stance on a number of key issues. If that were to effectively happen, it would be a clear signal that the Taliban are openly positioning themselves for negotiations. However, the Taliban continue to insist that they want a ‘confidence building measure’ from ISAF in order to move one step closer to actual negotiations.

The American military would like to maintain permanent military bases in Afghanistan, up to three of them; the main rationale seems to be that only by maintaining military bases the US Armed Forces would be able to claim success in Afghanistan. Any outcome short of that would probably be seen as a failure. The Department of State, by contrast, does not seem to believe that permanent bases are worth the trouble which they would attract, and would be happy with American presence being limited to some kind of training and assistance programme. Sharing bases with the Afghan forces seems to be the way this will go. The Karzai government, from its side, likes the idea of a Strategic Partnership with the US, which it sees as a guarantee against external threat as well as a guarantee of continuing support. The regional powers are unanimously opposed to the idea of permanent US military bases, but also of a long-term American presence of any kind. Many believe that signing an agreement on military bases would spell the end of any possibility of a negotiated settlement.

As long as massive international intervention goes on, the macroeconomic indicators will look good; given that every year more than the Afghan GDP is injected into the country in the form of aid and expenditures, growth rates in the range of 10-20% are not particularly impressive. It is clearly a bubble which is bound to burst at some point. Sectors of the economy will suffer already in 2011, as a dry winter is bringing drought to several provinces. Nature’s gifts are Afghanistan’s best chance of anything resembling a real economic take–off, because developing an industrial sector faces bad odds. Among all else, the high cost of electricity in Afghanistan is generating complaints by the business sector: electricity is mostly imported at relatively low prices, but consumers get charged up to 20 US cents per kilowatt, which some judge as too high for competing with the industrial sector of neighbouring countries.

The Afghan government has made a decision on how to deal with the Kabul Bank and the related financial scandal, but haven’t yet implemented it. The largest private bank in the country will be split in two, with one half taking over all the bad loans and try then to recover them. With this move the government responds to intensifying pressure from the International Monetary Fund and donors, who wanted the mess in the banking sector sorted out. In reality, although Kabul Bank’s management was the most ruthless in the country’s banking sector, other private banks have often operated not much more cautiously. At least two of them are very exposed and in extremely shaky positions. The only Afghan bank which is not seriously at risk is the Afghan International Bank, which is the best managed of the lot.

On a separate issue, the UN this year forecasts a slight reduction in the opium poppy harvest, despite very high prices following the poppy disease last year. The decline in production is expected to be concentrated in the South, with increases instead in the north-east and in the west, where the poppies were supposed to have been completely eradicated in the past.

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