JALALABAD (Afghanistan) — Giant trucks thunder along the main stretch of highway that peels away from the Pakistani border, carrying cement, fruit and chemicals to the Afghan city of Jalalabad.
Vulnerable to attacks from Taliban and Islamic State (IS) militants, the crucial 74km expanse of road that runs near the famed Khyber Pass is undergoing a major facelift after security concerns forced a seven-year delay in the project.
As well as paving the way for an expansion in bilateral trade between the two countries, the road is at the centre of the struggle between Pakistan and India to maintain influence over Afghanistan.
“It’s strategic interests that are prompting investment in Afghanistan,” Mr Imtiaz Gul, executive director at the Centre for Research and Security Studies in Islamabad. “Goodwill is secondary.”
In the last decade, India’s investment in Afghanistan has created discomfort for Pakistan, he noted.
Last month, Pakistan pledged a further US$500 million (S$712 million) to help rebuild Afghanistan, in addition to an existing US$500 million package on health, education and infrastructure that includes a 400-bed hospital in Kabul and more than 2,000 scholarships for Afghan students.
India, too, has focused on building infrastructure such as dams, highways, and power frameworks as well as the new Parliament in Kabul. It has largely refrained from supporting Kabul militarily because of Pakistani sensitivities, said Mr Dhruva Jaishankar, fellow at the Brookings India think-tank.
“For India, the priority is a stable and plural Afghanistan, and the defeat of the Taliban. This would ensure that the region is not a hotbed for terrorism and is instead a conduit to Central Asia,” Mr Jaishankar said.
Meanwhile, Afghanistan remains in the grip of a resurgent Taliban and repeated attacks from IS militants.
Bilateral relations between Afghanistan and Pakistan have been severely strained over Pakistan’s support for the Taliban, presenting significant challenges to economic development in the region, said Mr Abdul Baqi Amin, director of Centre for Strategic and Regional Studies in Kabul. The neighbours accuse each other of harbouring militants who carry out assaults on both sides of the border.
Nevertheless, Pakistan is Afghanistan’s largest trading partner, with annual trade of around US$2 billion. The two governments pledged to raise bilateral trade to US$5 billion by next year.
Some of this investment is bearing fruit. Last year, Afghanistan and Pakistan trade increased from US$1.03 billion to US$1.7 billion, according to Pakistan central bank figures, and Pakistan, as one of South Asia’s fastest-growing economies, is eyeing the central Asian markets for trade expansion.
Trade between Pakistan and central Asian republics combined accounted for just US$74.27 million in 2015-16, according to the Pakistan Trade Development Authority. With the expansion of the Torkhum-Jalalabad road, Islamabad is also looking to the expansion of the corridor to central Asia, creating an economic engine for the region.
As the main gateway to Afghanistan, more than half of Afghanistan’s 2014 trade with the rest of the world was conducted via Pakistan’s two border crossings — Torkham in the north and Chaman in the south, according to the Pakistan Business Council.
“If you see the history, people just came here to fight,” said Mr Amjad Ali, director of the road project for Pakistan’s national highway authority, referring to the use of the Torkham crossing by North Atlantic Treaty Organisation forces prior to 2014, as well as the long history of invasions via the Khyber Pass. “Now, more than 600 trucks each day cross the border via this road, and once the second carriageway is completed and the mechanism at border is upgraded, it will go up further.”
Pakistan is among the best-performing economies in Asia, and Prime Minister Nawaz Sharif aims to boost it further after China pledged to invest US$46 billion in an economic corridor linking its less-developed western part to Pakistan’s deep-sea port of Gwadar.
Despite the harsh exchange of words between Pakistan and India, Pakistan’s Minister for Planning and Reform, and the brains behind Mr Sharif’s development policy, Mr Ahsan Iqbal, offered an unexpected olive branch, inviting India to join China’s corridor in order to promote economic growth in south and central Asia.
“We need to normalise ties in this part of the world,” Mr Iqbal said in an interview earlier this month. “A better political environment is the key to better economic cooperation.” BLOOMBERG