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Update No: 108 - (24/01/11)

Hurdles to escalation
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 obvious issues of quality and capability already 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 European 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 the sense of a 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.

Bad neighbours, good neighbours
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.

Nature’s gifts
The Afghan government has finally invited 22 companies to bid for the Hajigak iron ore deposit; most of the companies are Indian (as many as 15), with just one being Chinese. The value of the deposit is estimated by the Afghan government, perhaps a bit optimistically, as US$350 billion. Nature’s gift are Afghanistan’s best chance of anything resembling a real economic take–off, because developing an industrial sector faces bad odds. Among 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.

It was supposed to be peace
The fight between President Karzai and the Electoral Commission over the legitimacy of the new parliament elected in 2010 was not yet over at the time of writing this commentary. The electoral results leave little room for Karzai’s influence in the parliament and he has been trying to coerce the Electoral Commission (through the Attorney General) to change the results, so far without success. The majority within the commission sympathises with the opposition to Karzai; 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.

Forecast 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 and they will be asked whether they choose to sacrifice the war in Afghanistan or some of the high technology programmes aimed at a future intercontinental war.

In the meanwhile President Karzai is already 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 is 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.

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.

As long as massive international intervention goes no, 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.

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