India’s role in the economic stabilisation of Afghanistan

The international military drawdown from Afghanistan has led to a drop in the international financial assistance to the country. Amidst the fallout from the dwindling international aid, and the pessimistic narrative that it has churned about the future of Afghanistan, very little attention has been paid to the window of opportunity available for the long-term economic stabilisation of the country.

With Afghanistan undergoing an inteqal (‘transition’), should India continue the well-trodden path after decades long policy on development and restructuring assistance for Afghanistan? Or should it undertake policy realignments to expand its role?

These questions are of focus in a new study on India’s role in the economic stabilisation of Afghanistan. Outcome of a collaboration between the Friedrich-Ebert-Stiftung (FES) Regional Peace and Security project, FES India Office and the FES Afghanistan Office, the study was conceived and created with essential inputs by the Afghanistan Policy Group, a diplomacy group consisting of former and current politicians, researchers, journalists, and civil society activists from Afghanistan.

For the purpose of this publication, Dr Shanthie M. D’Souza undertook a field research in four provinces of Afghanistan – Kabul, Balkh, Badakhshan and Bamyan – in the period between July and August 2016. On the bases of the primary data and interviews collected, D’Souza explores India’s role in the future economic stabilisation of Afghanistan by examining the possibility for India to replace its focus from quick-impact projects to alternative economic livelihoods programmes. Such a shift, the author asserts, is critical for the long-term stability of the Afghanistan.

Dr D’Souza argues that for India, which has adopted a minimalist role in Afghanistan’s security sector, economic assistance is the most effective tool to further its security, economic and geopolitical interests vis-à-vis the conflict-ridden country in its extended neighbourhood. One of the largest bilateral donor nations to Afghanistan since 2001, India is now confronted with the challenge of maintaining its economic and development activities amidst drastic changes in the security and political dynamics within Afghanistan.

It remains to be seen how New Delhi will pursue the development and reconstruction activities amidst changing and deteriorating, political and security conditions in Afghanistan. Until present, India has refrained from engaging in any new large-scale infrastructure project. At the same time, it has shown greater inclination for small-scale low-visibility development projects, its number increasing throughout the past years.