The SCO’s dilemma is that the progressive economic downturn in Afghanistan could possibly exacerbate challenges for member states
The 21st SCO summit in Tajikistan’s capital city of Dushanbe on the 16th and 17th of September was attended by leaders of all member states (Russia, China and India joined virtually), and also by the recently elected Iranian President Ebrahim Raisi as Iran’s formal induction process as a full member of the SCO began. But, there was no delegation from Afghanistan, an observer state since 2012 and the country that poses the biggest challenge to the SCO since its inception.
As the SCO celebrates 20 years of its existence, the summit presented a befitting opportunity to address some major issues surrounding Afghanistan. Therefore, amidst discussions pertaining to the enhancement of socio-economic cooperation, climate change, coping with the effects of the pandemic etc., unsurprisingly, Afghanistan featured quite prominently on the agenda. While different SCO countries face different as well as shared threats from the situation in the country, in line with a statement released by the SCO Secretariat on 26th August, the member states re-affirmed their commitment to build a stable, peaceful and prosperous Afghanistan free of terrorism, warfare and drugs.
The member states conveyed the willingness to coordinate among each other through different mechanisms such as the Regional Anti-Terrorist Structure (RATS), SCO Contact Group, CSTO, extended Troika, Moscow Talks etc. to tackle threats arising out of Afghanistan. They also expressed their readiness to take part in international efforts towards Afghanistan’s stabilization and development, with the United Nations playing a central role. However, the contemporary economic instability that persists in Afghanistan, combined with the unlikely prospects of international recognition for this Taliban regime anytime soon, presents a unique and complicated challenge for the SCO.
The member states conveyed the willingness to coordinate amongst each other through different mechanisms such as the Regional Anti-Terrorist Structure (RATS), SCO Contact Group, Regional Anti-Terrorist Structure (RATS amongst others, to tackle threats arising out of Afghanistan.
With a GDP per capita of approximately $508.80 in 2020, Afghanistan is Asia’s poorest country and one of the poorest in the world. Decades of devastating war made it really difficult for industries and a formal economy to develop and left the country overwhelmingly aid-dependent; 40% of its GDP comes from aid and international grants. The current political scenario has further put Afghanistan on the cusp of economic collapse. 47.3 % of Afghanistan’s population currently lives below the poverty line, but the existing conditions could take this number as high as 97% by mid-2022, according to the UNDP. Political upheaval of the previous government, skyrocketing inflation, collapsing health and education systems etc. following the Taliban takeover has meant that more than 18 million people are in need of some form of humanitarian assistance as well; out of which 75% are women and children.
The Taliban want to govern Afghanistan like any functional government runs a country. They have made promises to improve Afghanistan’s economy and are expected to quell the humanitarian crisis that is currently ravaging the country. Resultantly, they have been trying to seek recognition by promising a moderate rule respecting women’s rights, media freedoms, sanctity of foreign embassies etc. in order to elicit international economic assistance.
Yet, the world remains skeptical of the Taliban and rightly so. At the moment, they are failing to make a compelling case for international recognition. The Taliban have formed a non-inclusive interim government filled with UN-designated terrorists, reportedly conducted “summary executions” of civilians and Afghan security forces, forced women to stay at home until a system has been put in place for their safety, announced regressive rules for female students, banned women from sports among other things.
In a bid to leverage Afghanistan’s economic dependence to get the Taliban to change their ways, western countries have suspended foreign aid to the country, and so have the World Bank and the International Monetary Fund (IMF). Moreover, Afghanistan’s foreign reserves worth $9.5 billion which are mostly held in the US have also been frozen. Over the top of foreign aid, 4% of Afghanistan’s GDP was made up of remittances; making it one of the most remittance-dependent countries in the world. But, in the wake of the takeover, international transfer companies such as Western Union and MoneyGram had suspended their services in Afghanistan for a few weeks, essentially cutting off the supply of money from abroad to Afghans and accentuating their economic woes.
In a bid to leverage Afghanistan’s economic dependence to get the Taliban to change their ways, western countries have suspended foreign aid to the country, and so have the World Bank and the International Monetary Fund (IMF).
Nevertheless, the Taliban’s inability to assuage the widespread suffering in Afghanistan has meant that some form of humanitarian funding has been resumed. As the UN Secretary General António Guterres urged countries to extend assistance to Afghanistan, donors also pledged more than a $1 billion in humanitarian aid at a conference in Geneva recently. In spite of this keenness to extend humanitarian assistance, countries have recurrently emphasised that recognition will depend on the Taliban’s behaviour, a point iterated at the SCO summit as well.
It is noteworthy that the Taliban maybe able to receive humanitarian assistance without recognition. But, there would be no direct channels for development aid or sizeable loans from countries and institutions like the International Monetary Fund and the World Bank because the Taliban would have no globally-recognized institutional structure to receive the money. To be sure, the Taliban have their own sources of revenue. The group’s annual income from 2011 onwards has been estimated at around $400 million by the United Nations and is reported to have touched even $1.5 billion a year by the end of 2018. But although this amount is adequate to run a counterinsurgency, running a country of 40 million people would require much more than this. Secondly, most of this revenue is generated through illicit sources, which means that the Taliban would have to give up on them in order to attain international recognition.
Akin to all governments, the Taliban need the money which they do not have, to run the country and foster economic development in the long-term. Even though this requirement might be perceived as a tool to pressurize the group into respecting human rights, there is a major downside to it. Afghanistan is already one of the most insecure and unstable countries in the world. The longstanding problems of political uncertainty and lack of economic alternatives have birthed conditions conducive to the flourishment of extremism, drugs trade, civil wars stemming from ethnic strife etc. Therefore, persistent economic instability and brewing discontent that causes further political instability is very dangerous in Afghanistan, because these conditions could be exploited to expand influence and radical ideology that would multiply security threats not just within the country, but in the whole extended region, including the SCO countries. This is not to say that economic development would eradicate the aforementioned problems, but it could definitely help stabilize the situation to an extent.
Persistent economic instability and brewing discontent that causes further political instability is very dangerous in Afghanistan because these conditions could be exploited to expand influence and radical ideology that would multiply security threats not just within the country, but in the whole extended region, including the SCO countries.
Given the SCO’s high stakes in the prevailing security situation in Afghanistan, it would undoubtedly be tremendously beneficial for the member states to cooperatively facilitate the development of Afghanistan and the dilapidated economy. Nevertheless, at this moment, the most that SCO countries can do together is to provide much needed humanitarian assistance to Afghanistan, join international efforts concerning Afghanistan’s future and facilitate an inclusive Intra-Afghan dialogue as Russian President Vladimir Putin mentioned at the SCO summit. This would help ease the situation in the country in the short-term but having said that, the larger picture of development and stability entirely depends on Taliban changing their behaviour and attaining global recognition, something that seems rather far-fetched at this juncture.
In essence, the SCO’s dilemma is that the progressive economic downturn in Afghanistan could possibly exacerbate challenges for member states, but irrespective of their collective commitment to averting the same, their coping options are constrained by other factors that they have limited control over.
This article has been revised and updated for clarity and in response to reader comments.
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Saaransh Mishra was a Research Assistant with the ORFs Strategic Studies Programme. His research focuses on Russia and Eurasia.Read More +