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This is a technical document drawing on multiple
data sources, all of which are open source. While any
analysis is based on this data, both sins of commission
or omission are the responsibility of the RECCA
technical team. Should there be either typographic or
data errors in the report, kindly communicate these in
writing to secretariat@recca.af and a revised version will
be posted on line. This report is the final consultation
version only. The Ministry of Foreign Affairs does not
guarantee the accuracy of the data included in this
work. The boundaries, colors denominations, and
other information shown on any map in this work do
not imply any judgment concerning the legal status of
any territory or the endorsement or acceptance of such

All queries on rights and licenses, including subsidiary
rights, should be addressed to the Directorate General of
Economic Cooperation, Ministry of Foreign Affairs, Malik
Asghar Street, Phase II, Kabul City, Afghanistan.

2017 © Ministry of Foreign Affairs, Islamic Republic of


+93 20-210-4350
secretariat@recca.af @RECCAfghanistan

1 MESSAGE from the Minister of Foreign Affairs





ENERGY ......................................................................................... 15

TRANSPORT NETWORKS ......................................................... 18

TRADE & TRANSIT FACILITATION .......................................... 26

COMMUNICATIONS .................................................................. 30

B2B & LABOR SUPPORT ........................................................... 31

RESEARCH, MONITORING, & EVALUATION ....................... 35


37 RECCA 2.0: A platform for collective economic action and exchange, owned
and operated by the people, businesses, and governments of Central, South, and
Southwest Asia.

39 CONCLUSION: Deepening Connectivity & Expanding Trade through Investment in

Infrastructure and Improving Synergy

40 ANNEX 1: RECCA National Focal Points

41 ANNEX 2: Afghan Government Ministries & Agencies Consulted for the RECCA
Annual Review 2017

42 ANNEX 3: Afghanistan’s Participation in Regional Organizations

43 ANNEX 4: Major Recommendations from the RECCA-VII Academic Forum


In the name of Allah, the Most Merciful, the Most Compassionate,

hen we met for the first time through the Regional Economic Cooperation Conference on Afghanistan,
in December 2005 in Kabul, we embarked on a journey together towards a common vision for restoring
Afghanistan’s historical role as a land-bridge and a crossroad of convergence between Central Asia,
South Asia, China, the Middle East, and Europe to achieve greater regional economic cooperation and integration.

Since then, our efforts have helped regional economic cooperation take root, building a solid foundation for cross-
border economic cooperation in a wide range of areas, including energy, transport networks, trade and transit
facilitation, communications, business-to-business partnerships, and labor support. The regional projects prioritized
under RECCA, once completed, will transform the socio-economic situation of the entire region by unleashing the
immense potential for trade complementarity and economic interactions at both regional and continental levels.

As presented in this RECCA Annual Review 2017, our region has witnessed inspiring achievements in recent years,
as exemplified by an expanding network of pipelines, transmission lines and fiber optic cables; the finalization of
important transport and transit agreements; and the operationalization of freight trains and cargo flights across
the region. The signing of the Lapis Lazuli Route Agreement, now scheduled to occur on the sidelines of RECCA-
VII in Ashgabat, marks another important milestone in our collective efforts towards greater connectivity and
integration. Once implemented, this flagship agreement will not only enhance regional economic cooperation and
connectivity among the contracting parties, but it will also contribute significantly to the Eurasian Continental trade
and transport network, creating enormous economic opportunities for the citizens of our countries.

The theme for RECCA-VII, “Deepening Connectivity and Expanding Trade through Investment in Infrastructure
and Improving Synergy”, reflects our shared commitment to addressing common gaps and investment priorities in
order to enhance regional cooperation and the prospects of our citizens.

It is my earnest conviction that with our new approach, as described in these pages under the heading of “RECCA
2.0”—and with the continued support from regional and international partners—our dynamic journey over the next
two years will move us closer towards realizing our common vision for deepened connectivity and expanded trade
across the region.

I wish to thank all the Focal Points from Afghan Ministries and RECCA regional countries, as well as our international
partners, including the UN Development Program, for their invaluable contributions to the preparation of this year’s


Salahuddin Rabbani
Minister of Foreign Affairs


AAEDC Afghanistan Airfield Economic Development Commission MCI Ministry of Commerce & Industries
ACCI Afghanistan Chamber of Commerce & Industries MMTLFs Multimodal Transport and Logisitics Facilities
AD Alternative Development MPW Ministry of Public Works
ADB Asian Development Bank MSP Memorandums of Strategic Partnership
AIIB Asian Infrastructure Investment Bank O&M Operation & Maintenance
AKT Afghanistan, Kyrgyz Republic, Tajikistan OFC Optical Fiber Cable
ANRP Afghanistan National Railway Plan OSCE Organization for Security and Cooperation in Europe
ARA Afghanistan Railway Authority PMT Project Management Team
ASYCUDA Automated System for Customs Data PPP Public Private Partnership
ATAR Afghanistan Trade and Revenue Projec RFPs Request for Proposals
ATRA Afghanistan Telecom Regulatory Authority SAARC South Asian Association for Regional Cooperation
B2B Business-to-business SCO Shanghai Cooperation Organization
BOMNAF Border Management Northern Afghanistan SEZs Special Economic Zones
BRI Belt and Road Initiative SMEs Small and Medium-sized Enterprises
BRT Business Receipts Tax TAP Turkmenistan-Afghanistan-Pakistan
CAR Central Asian Republic TAPI Turkmenistan-Afghanistan-Pakistan-India
CAREC Central Asia Regional Economic Cooperation TEVT Technical Education and Vocational Training
CASA Central Asia—South Asia TFA Trade Facilitation Agreement
CBTA Cross Border Trade Agreement THRCP Trans-Hindukush Road Connectivity Project
CRE Center for Research & Evaluation TIR International Road Transports
ESIA Environmental & Social Impact Assessment TPCL TAPI Pipeline Company Ltd.
EU European Union UNCTAD United Nations Conference on Trade and Development
FOTNs Fiber Optic Transmission Networks UNDP United Nations Development Programme
GAIL Gas (India) Limited UNESCAP United Nations Economic and Social Commission for Asia and the Pacific
GDP Gross Domestic Product UNHCR United Nations High Commissioner for Refugees
ICT Information & Communication Technology UNODC United Nations Office on Drugs and Crime
ILO International Labor Organization UNOPS United Nations Office for Project Services
ITC International Trade Center UNSPECA United Nations Special Programme for the Economies of Central Asia
LDC Least Developed Countries USAID United States Agency for International Development
LMIS Labor Market Information System WTO World Trade Organization


the banner of “Deepening Connectivity projects also benefit from—and help to

and Expanding Trade through Investment expand stronger linkages with—regional
in Infrastructure and Improving Synergy”, initiatives and organizations that share
the Seventh gathering of the Regional closely related objectives with the RECCA
Economic Cooperation Conference on forum, including the Heart of Asia-Istanbul
Afghanistan (RECCA-VII), from 14-15 Process, the Belt-and-Road Initiative,
November 2017 in Ashgabat, Turkmenistan, Middle Corridor, Silk Wind, CAREC, SAARC,
offers new opportunities for a shared ECO, UNSPECA, SCO, and the OSCE.
diagnosis of successes and challenges, as
well as renewing regional commitments Moving beyond limited transport toward

ow entering a new era of innovation for combined public and private collective more robust and multi-dimensional
and economic dynamism, the action. economic corridors, RECCA-VI in Kabul
Regional Economic Cooperation succeeded in building consensus around
Conference on Afghanistan (RECCA) has RECCA-VII will provide the opportunity practical kinds of support for new “Regional
worked to forge and implement an ambitious to take stock of the progress made since Economic Growth & Resource Corridors”
vision of inter-regional and inter-continental RECCA VI, held from 3-4 September 2015 (first discussed at RECCA-V in March 2012 in
connectivity and mutually beneficial trade in Kabul, through a comprehensive review Dushanbe). Besides focusing Afghanistan
through practical investment projects and of the platform’s regional cooperation on the hardware and software requirements
policy changes for the direct benefit of the and investment projects; discuss the to attract substantial transit as a dynamic
people and nations of Central, South, and challenges and bottlenecks, as well as regional trade and transport hub, such a
Southwest Asia. Following its first decade the financing and investment needs, with comprehensive approach to economic
of progress, RECCA encompasses a leading respect to both current and new priority corridors aims to make mineral extraction
regional cooperation framework aimed at investment projects in the key economic a viable export-led growth and revenue
promoting cross-border trade and transit areas of energy, transport networks, trade option for the country and its neighbors.
through prioritized economic exchange and and transit facilitation, communications, Regional Economic Growth & Resource
investment projects capable of contributing B2B and labor support, as well as research, Corridors also maintain the potential to
to economic growth, job creation, public monitoring, and evaluation; build generate multiplier effects and to increase
revenue, and confidence-building for the consensus around concrete steps that need returns on growth, jobs, and public revenue
countries and people situated within the to be taken by governments, the private for the individual projects examined in
wider Heart of Asia region. sector, and international organizations RECCA Annual Review 2017.
in the context of ongoing projects, and
As detailed in this RECCA Annual Review present new “bankable” investment project A greater focus on robust and multi-
2017, progress in implementing multiple concepts or reform initiatives under the dimensional economic corridors also
regional cooperation and investment abovementioned economic categories. strengthens the need to transform
projects—particularly in the energy sector RECCA into a truly regionally-led and
and development of new transport and The regional cooperation and investment owned platform for regional economic
communications networks—has been projects reviewed in the following pages cooperation at the crossroads of Central,
promising. At the same time, in other key conform with and reinforce the Afghanistan South, and Southwest Asia. The time is ripe
areas of regional economic cooperation, National Peace and Development for “RECCA 2.0” and the development of a
including the effective implementation Framework, introduced at the Brussels regional economic cooperation strategy
of bilateral and regional trade and transit Conference on Afghanistan (October that includes joint cross-border projects
agreements, more focused political 2016), and its National Priority Programs, and reflects the priorities of governments,
attention, improved security conditions, including the National Infrastructure Plan, businesses, scholars and civil society leaders
and better technical effort are required. the Women’s Economic Empowerment working to deepen mutually beneficial
Similarly, there are growing opportunities Program, National Mineral & Resources economic ties along major crossroads of
for expanded business-to-business (B2B) Development Program, National Eurasia.
relations across the region, as well as Comprehensive Agriculture Development
increased support for the rights and Priority Program, and the Private Sector
working conditions of employees. Under Development Program. Many of these


The following are brief highlights from the eighteen

Regional Cooperation and Investment Projects reviewed
and presented in this progress report:

1) TAPI Pipeline: TAPI Pipeline Company Limited and an engineering firm signed a contract, on 17 January 2017,
to commence design and survey work in Afghanistan. Signing of the project’s Pipeline System Rules Agreement,
a Host Government Agreement, and a Transportation Agreement is urgently needed.

2) CASA-1000: A signing ceremony is planned in November 2017 to mark the start of work on the 563 km
Afghanistan transmission line project component. Completion of the CASA-1000 environmental and social impact
surveys is a high priority.

3) TAP-500: Following the signing of the TAP-500 project’s MOU by Turkmenistan, Afghanistan, and Pakistan in
December 2015, three technical level meetings were held in 2016 and 2017, and a Ministerial Statement is expected
to be signed at RECCA-VII. Major priorities now include preparing a technical assessment and designing a plan for
the TAP-500 project, as well as finalizing the project’s coordination and monitoring mechanism.

4) Belt-and-Road initiative and Afghanistan: Several site visits and academic exchanges were undertaken in
2017 between Afghanistan and China to explore additional areas of collaboration, in accordance with the two
country’s 2016 Belt-and-Road Initiative MOU. A number of trilateral meetings between Afghanistan, China and
Pakistan have been held with a view to further enhance cooperation among the three countries under the BRI
and RECCA.

5) Lapis-Lazuli Transit, Trade & Transport Route: The agreement is planned for signature by the participating
countries on the sidelines of RECCA-VII in Ashgabat. Once signed, the internal procedures of the contracting
parties required for the entry into force of the Agreement need to be completed with a view to ensure expeditious
implementation of the agreement.

6) Chabahar International Transport and Transit Corridor: The internal procedures required for entry into
force of the Chabahar Agreement are being finalized and the additional protocols are planned to be discussed
and developed soon. Chabahar Port infrastructure improvements as well as infrastructure development along the
route including inside Afghanistan are now needed. On 29 October this year, the first shipment of wheat from
India to Afghanistan was shipped through the Chabahar port in Iran.

7) Five Nations Railway Corridor: Five out of six feasibility studies are completed. Exploring public-private
partnership financing for the project is a high priority.

8) Afghanistan Rail Network: The third segment of the rail line between Khaf and Herat is being completed. The
Afghan Government is also prioritizing other railway segments connecting Afghanistan with neighboring countries.

9) Trans-Hindukush Road Connectivity Project: Initiated in January 2016, the project’s preparation stage
recently concluded and recently transitioned to its three-year implementation stage. For this next phase, adequate
resources and trained construction management teams and local private contractors are needed for the design,
building, and maintenance of the Baghlan-Bamiyan highway.



10) Cross Border Transit Agreement and TIR Convention: To facilitate regional transit, over the past twelve
months sixteen TIR Carnets were distributed by the Afghan Chamber of Commerce and Industries. A priority is
extending the CBTA between Afghanistan, Tajikistan, and the Kyrgyz Republic to include Kazakhstan.

11) Special Economic Zones/Multimodal Transport and Logistics Facilities: Facilities are being developed in
Balkh, Kabul, Kandahar, Helmand, Herat, Jalalabad, Mazar-i-sharif, Nangarhar, Aqina, Toraghundi, and Zaranj. An
omnibus feasibility study is urgently needed to build the business case for a combination of public and private
investment in Multimodal Transport and Logistics Facilities across Afghanistan.

12) Regional Trade, Customs, and Border Management Cooperation: In 2016 and 2017, Afghanistan signed
agreements on Customs Co-operation with Iran and China and Customs Information Exchange with Tajikistan.
Finalizing similar agreements with India, Kazakhstan, Pakistan, Russia, Turkmenistan, and Uzbekistan is now a top

13) Digital Silk Road: 2017 saw the signing of two MOUs for expansion of the Optical Fiber Cable connecting
Afghanistan, China, the Kyrgyz Republic, and Tajikistan, and a new MOU is expected to be signed at RECCA-VII by
Turkmenistan , Afghanistan, and Pakistan. A top priority now is completion of the Afghan Fiber Optic Ring and its
480km connection with China.


14) Enhancing Regional Business-to-Business Partnerships through a RECCA Chamber of Commerce &
Industries: The RECCA Business Forum, held from 1-2 March 2017 in Istanbul, strengthened regional business-
to-business cooperation and seeded ideas on economically empowering women and standing-up a RECCA
Chamber of Commerce & Industries (which both merit support now from RECCA countries and businesses).

15) Women’s Economic Empowerment through Regional Economic Cooperation: To further progress on this
Women’s Economic Empowerment component of RECCA, a policy paper will be produced (coming out of RECCA-
VII) that highlights obstacles to progress for women entrepreneurs across the region and a set of operational
recommendations for improving their prospects.

16) Regional Agro Food Industry Development: A comprehensive feasibility study for the development of an
Afghanistan-Kyrgyz Republic-Tajikistan Agro Food Industry Development (AKT) project, financed by UNDP and
the Government of Turkey, was initiated, and its findings were endorsed during a meeting of the Consortium,
in February 2016, in Bishkek. In addition to exploring other regional opportunities, this AKT tripartite consortium
should be re-convened to work toward project implementation.

17) Labor Exchange and Remittances: The Afghan Government, World Bank, and European Union are currently
planning for the skills enhancement and employability of Afghan workers through Technical Education and
Vocational Training (TEVT) programs and “Labor Dispatch” to near-by countries in the region. Another high priority
is the preparation of a model bilateral agreement on labor support.


18) RECCA Center for Research and Evaluation: In support of RECCA Ministerial Meetings, Investment Road
Shows, Business Forums, and other activities, the new Center would undertake (demand driven) economic impact
assessments, economic and financial analysis, and feasibility studies in the form of Bankable Project Briefs, working
papers, and policy papers.


RECCA National Focal Points pull together and 14-15 November 2017
support the various tracks of this new “RECCA 2.0” Lapis-Lazuli Transit, Trade & Transport Route agreement is
approach planned for signature by the participating countries on the sidelines
of RECCA-VII in Ashgabat.
RECCA Center for Research & Evaluation to prepare
2 Bankable Project Briefs for Public and Private Investors, 17 January 2017
as well as undertake other activities like state-of-the-art TAPI Pipeline contract signed between TAPI Pipeline Company
research and analysis on priority regional matters Limited and an engineering firm to commence design and survey
work in Afghanistan.
RECCA Chamber of Commerce & Industries to
help mobilize governments and national chambers 14-15 November 2017
of commerce in support of Investment Road Shows, TAP-500 Ministerial Statement is expected to be signed at RECCA-
Business Forums, and wider B2B cooperation VII.

Prioritize Women’s Economic Empowerment November 2017

through Regional Economic Cooperation CASA-1000 signing ceremony planned to mark the start of work
on the 563 km transmission line project component situated within
Strategic Partnerships between RECCA and other Afghanistan.
5 regional organizations and initiatives
RECCA Interactive Web-Portal for Regional Digital Silk Road saw the signing of two MOUs for expansion of
6 Investment Promotion and Knowledge Sharing the Optical Fiber Cable connecting Afghanistan, China, the Kyrgyz
Republic, and Tajikistan, and an MoU is expected to be signed
Synergies with the Afghan Government’s between Turkmenistan, Afghanistan, and Pakistan at RECCA-VII.
7 Infrastructure Development Council
1-2 March 2017
Moving towards a RECCA Economic Cooperation RECCA Business Forum in Istanbul strengthens regional business-
8 Strategy for Central, South, and Southwest Asia to-business cooperation and seeds ideas on economically
empowering women and standing-up a RECCA Chamber of
Commerce & Industries.



uilding on its first Decade of This trend is based on the recognition
Progress (2005-2015), the seventh that regional economic cooperation
gathering of the Regional Economic is crucial for economic growth and
Cooperation Conference on Afghanistan sustainable development through
will focus high-level political attention, enhancing connectivity and
resources, and entrepreneurial ingenuity competiveness, generating greater
on the theme of “Deepening Connectivity productivity, lowering transaction
and Expanding Trade through Investment costs, and expanding markets.
in Infrastructure and Improving Synergy.”
Deepening connectivity refers especially Numerous studies over the past years have
to the public and private infrastructure suggested that there is a positive correlation
links that bind the countries and people between regional economic cooperation
of Central, South, and Southwest Asia. and economic growth. Regional economic
Alongside an improved policy, regulatory, cooperation can facilitate trade, investment,
and security environment, the region’s and the transfer of knowledge, which are
infrastructural backbone helps to drive each critical for productivity and growth.
down costs, thereby improving conditions These same studies further contend that
for expanded cross-border trade in goods specific factors, such as the potential for trade
and services. Finally, enhanced synergies complementarity between countries and
through regional cooperation take at the level of basic infrastructure development
least three forms: (i) between the RECCA within a country, are chief determinants of
forum and other regional platforms and RECCA ANNUAL REVIEW 2017 successful regional economic cooperation

organizations; (ii) between and within and integration efforts. They can also create
transport corridors; and (iii) between and new incentives towards achieving lasting
within robust economic corridors. In this peace and stability.
Overview section of the RECCA Annual
Review 2017, these three sub-themes of Energy, Transport Networks, Trade and In this Overview section of the RECCA
RECCA-VII are further defined and major Transit Facilitation, Communications, B2B Annual Review 2017, the recent trends and
regional trends scrutinized, and RECCA’s (Business-to-Business) and Labor Support, practical ways that deepening connectivity,
“Bankable” Investment Criteria for Regional and Research, Monitoring, and Evaluation. expanding trade, and improving synergies
Cooperation and Investment Projects are Concerted and sustained action in each of can improve outcomes from regional
also revisited. these areas is helping to ensure that the re- economic cooperation and integration
emerging and dynamic Silk Roads between that translate into meaningful progress for
As proclaimed by H.E. Dr. Ashraf Ghani, Europe, Asia, and the Middle East traverse the countries and people of Central, South,
President of the Islamic Republic of rather than circumvent Afghanistan, as and Southwest Asia are examined and
Afghanistan, in a speech this past evidenced through multiple regional elaborated. In doing so, the Review aims to:
September: economic integration initiatives, including
China’s Belt-and-Road Initiative, Turkey’s • Focus on public-private partnership
“… regional connectivity is our Middle Corridor project, Kazakhstan’s Silk investment discussions at RECCA-VII and
key goal. Afghanistan today Wind project, and the follow-on activities beyond.
enjoys the best of relationships associated with the recent U.S.-led New Silk
with every single one of its Road initiative. In doing so, Afghanistan’s • Inform the presentation at future
northern neighbors and their neighbors also stand to benefit Investment Road Shows across the region.
neighbors. There is a historical economically, socially, and politically—
transformation under way. through enhanced regional prosperity and • Contribute to a truly regional economic
Trains from China are reaching stability—from restoration of the country’s strategy for Central, South, and Southwest
our border. Pipeline, railways, historical role as a regional lynchpin at the Asia by continued consultations in
transmission lines—an enormous Heart of Asia. regional capitals prior to RECCA-VIII and
series of efforts is under way. And seeking direct linkages with other regional
the key to this is harnessing both As detailed in Annex 3 of this Review, economic cooperation initiatives (e.g., the
the natural wealth of Afghanistan Afghanistan participates actively in several Heart of Asia - Istanbul Process, the Belt-
and its immense human capital.” formal regional organizations too. Recently, and-Road Initiative, Middle Corridor, Silk
a new wave of regional cooperation efforts Wind, CAREC, SAARC, and ECO).
Through its six earlier meetings, the Regional centered on Afghanistan, leading to the
Economic Cooperation Conference on formation of two prominent Afghanistan- The Review has been prepared in
Afghanistan has aspired to deepen Eurasian focused regional cooperation frameworks, collaboration with key Afghan Ministries,
regional connectivity at the crossroads of namely the Regional Economic Cooperation the Afghan Chamber of Commerce &
Central, South, and Southwest Asia, with a Conference on Afghanistan and the Heart Industries, and regional partners (see
special focus on six thematic categories: of Asia-Istanbul Process. Annexes 1 & 2).



The RECCA forum’s focus on deepening The question is how can governments Mediterranean, was finalized in November
connectivity emphasizes public and private move towards unleashing the full potential 2016 and is expected to be signed on the
infrastructure links that bind the countries for inter-regional connectivity at a juncture sidelines of RECCA-VII in Ashgabat. The
and people of Central, South, and Southwest when the need for economic growth and Five Nations Corridor has the potential to
Asia. First and foremost, this involves poverty reduction are as pronounced as connect China on one end and Iran on
transport links via road, rail, shipping, and air ever across the wider region, and what the other, over a total distance of 2,100
that are central to facilitating cross-border role can the existing regional platforms kilometers and traversing the countries
trade and the exchange of good, services, their member states, and civil society and of the Kyrgyz Republic, Tajikistan, and
and people. Next is energy infrastructure— business play in this regard? Emphasizing Afghanistan in the process. Planning of
from a regional grid and natural gas pipelines and increasing inter-regional connectivity the Chabahar - Zaranj - Farah Railway is
to the transfer of new kinds of renewable across Central, South, and Southwest Asia also underway. The third section of Khaf-
energy—with the potential to bring the via RECCA and the Heart of Asia-Istanbul Herat railway is being completed, and the
abundant energy resources of Central Process need to build on the following Atta Morad-Aqina international railway line
Asia to the far more populous and energy examples of increased inter-regional was inaugurated November 2016, linking
deficient countries of South Asia. Another connectivity achieved in recent years. Afghanistan to Turkmenistan and other
key area for deepening connectivity is the Central Asian countries. Finally, the following
communications infrastructure, including Trade networks between Central, South, rail lines connecting Afghanistan with
state-of-the-art fiber optic cables, that will and Southwest Asia are the most crucial neighboring countries are under different
enable the steady expansion of information component of connectivity between these phases of feasibility studies or procurement
technologies and play a key role in making regions. for construction: Aqina - Andkhoy -
Afghanistan both an internet exchange and Shiberghan (108 km); Torghundi-Herat (173
broader regional trade and transit hub at Afghanistan provides the shortest km); Chaman-Spinboldak (11.5 km) and
the Heart of Asia. and most cost-effective routes Spinboldak to Kandahar (96km); Jalalabad -
for roads, railways, pipelines and Torkham (75 km); and Lashkargah-Bahram
While significant efforts have been made transmission lines between Central, Chah (258 km).
under current regional platforms towards South, and Southwest Asia.
boosting regional economic cooperation India, Iran, and Afghanistan signed an
and connectivity, progress up until now Promoting trade complementarity between agreement in May 2016 to develop the
has been nominal. Central, South, and them is highly dependent on their physical Chabahar port, located in southeastern
Southwest Asia remain three of the least connectivity. Iran. The Chabahar Corridor is forging a
integrated regions in the world marked by new trade and transit route for Afghanistan,
low levels of intra-regional and (among The potential for energy market with the potential to become one of the
each other) inter-regional trade. Certainly, expansion between Central Asia most critical and cost-efficient transit
an episodic lack of regional security, and South Asia is vast due to points for Afghan trade. Afghanistan’s 135-
among other factors, has contributed to the high degree of energy trade mile long Zaranj-Delaram Highway is a key
this outcome. However, there is immense complementarity, between an component, which helps creates a North-
potential for increasing trade, energy, energy rich Central Asia and an South transport corridor linking the Indian
and information connectivity across the energy poor South Asia. sub-continent and land-locked Central Asia.
wider region. Investment in infrastructure
enhances economic growth, job creation, The infrastructure required to achieve this ROADWAY CONNECTIVITY is also progressing
and standards of living through improved involves constructing a regional electricity in Afghanistan and the region. Completion
connectivity and production networks; grid of integrated transmission lines, as well of Afghanistan’s national ring road remains
bolsters environmental sustainability by as a network of natural gas pipelines. a top priority for the government and is
reducing carbon emissions and building nearly accomplished, while the Islamic
a more climate-resilient economy; and Progress in transport connectivity is taking Development Bank has issued a USD $74
promotes social development through different forms. Most prominently, the million loan in support of Phase 1 of the
enhanced public services like education draft agreement for the Lapis Lazuli Route construction of Kabul’s ring road, a four-
and health. between Afghanistan, Turkmenistan, lane highway that will extend 95 kilometers
Azerbaijan, Georgia, and Turkey, linking connecting all of Kabul’s neighboring
Afghanistan to the Black Sea and the provinces. In addition, completion of the


civil works for the construction of Baghlan- signed MoUs to build a four-nation – China- Yet, as the Afghan economy has grown in
Bamiyan road remains a priority. Kyrgyzstan-Tajikistan-Afghanistan – Silk recent years, import increases have not
Road Fiber Optic Cable that will connect been matched by a corresponding growth
The Trans-Hindukush road connectivity Central Asia to Europe. The strategic in exports. Without a steady increase in
project has been initiated in the form partnership between China Telecom and Afghan exports, this sizable imbalance will
of design and technical studies now Afghan Telecom will expand Afghanistan’s require regular injections of foreign aid (or
underway to improve the Salang highway informational connectivity with the region. capital) in order to be sustained. One of the
that connects Kabul with north Afghanistan, key strategies for increasing exports involves
allowing for increased transport of Along with hard infrastructure and the imperative of reducing transaction costs
goods and people across the Hindu Kush physical connectivity, however, there is in the Afghan export sector. For example,
mountains. Plans have also commenced need for intensified efforts with respect to Afghanistan’s export times require on
to repair the Salang Tunnel and construct a the soft infrastructure required for trade average 86 days, compared to only 33 days
second roadway. And construction of a 108 expansion and investment promotion by other South Asian nations. By reducing
km road in northeast Badakhshan province in Central, South, and Southwest Asia. export times to 25 days and diversifying
near the Tajik border to connect Baharak As the negotiation of new transit-trade products, Afghan exports would increase
and Ishkashim will be completed in 2021, at agreements have yet to live up to their 20% (for example, USD $48 million to India),
a cost of USD $98 million. full potential, there remains an important resulting in USD $152 million additional
Connectivity via the airways is also moving role for efforts to expand existing transit- exports per year (but the time to export
forward in the form of the new “Air Bridge” trade agreements. Policy coordination, has actually increased over time: 74 days in
to India. Afghanistan recently exported customs harmonization, removal of 2010, 81 days in 2013, and 86 days in 2014).
400 tons of fruit to India from Kabul and non-tariff barriers, visa facilitation, and
Kandahar. The Afghan grapes, apples, and communications connectivity remain For example, reducing the number of
pomegranates that were transported on essential for further economic integration documents to export is part of the solution
the first air corridor with India will make a of the wider region. to reducing transaction costs in Afghan
noteworthy contribution to an expected trade practices (10 in Afghanistan, 8 in China
60% increase in trade between the two and in Pakistan, and 7 in Iran and India).

ENERGY CONNECTIVITY is of crucial importance

to Afghanistan and its neighbors. Two
prominent examples of complementarity of
regional energy networks between Central
Asia and South Asia are the TAPI natural gas
pipeline project and the CASA 1000 regional While the trade and transit sector holds But Afghanistan also relies on its partners
grid electricity transmission project. Each considerable promise for Afghanistan, thus for improving trade flows and volumes. For
has experienced considerable progress far trade has played only a nominal role example, USAID concluded that shorter
toward the creation of an integrated in the country’s overall economic growth dwell time in Pakistani ports would not only
Central Asia-South Asia energy market. The picture. Part of the reason for this rests with improve trade relations between Pakistan
Turkmenistan-Afghanistan-Pakistan TAP the intermittent challenge of security. While and Afghanistan, but would also incentivize
500 kv Transmission line is also moving there is a great deal of emphasis placed traders in Central Asia to transit import and
forward with completion of its feasibility on the traditional trade sector involving export goods through Pakistan (“USAID
studies, and the Indian company Dynasty the export of goods and services, in fact, Trade Project: Dwell Time Study” August,
Oil & Gas is building a 10-megawatt solar it is Afghanistan’s transit-trade sector that 2014).
power plant in Kandahar—the $10 million holds greater promise than trade exports
project is the first of its kind in Afghanistan. at this juncture. According to the World Areas of notable progress are also important
Bank, fully USD $5.2 billion in traded goods to emphasize, such as how Afghanistan’s
COMMUNICATIONS CONNECTIVITY is also could be transited through Afghanistan trade structure is now less concentrated in
progressing through progressive installation on a yearly basis, including gains of up to terms of the number of its trade partners
of the Afghan Fiber Optic Ring (also known 5% of the value of total transit trade or the than it was in the previous decade. For
as the Afghan National Civil Optical Fiber equivalent of USD $260 million (October, example, China and India each have trade
Cable-OFC ring network) within the 2016). Gradually, the number of trade routes volumes with Afghanistan under USD
broader regional “Digital Silk Road”, which through Central Asia, South Asia, and Iran $1 billion at present, but infrastructure
aims to improve regional connectivity and have been increasing and diversifying improvements in the South Asian ports as
expand the regional knowledge economy the movement of goods to and from well as in the Chabahar Port, are expected
in Central, South, and Southwest Asia. Afghanistan. to contribute to increased trade flows
In addition, Afghanistan and China have between them.


EXPANDING TRADE regional” in the form of negotiating bilateral GDP growth; (iii) increasing growth of the
and regional trade and transit agreements. energy, mineral, and agricultural sectors;
This would increase not only the volume and (iv) increasing the growth of the service
of its traded goods, but also the volume of sector. With a trade-based economic
goods transiting through Afghanistan. As strategy in place, Afghanistan has a not
a landlocked country, Afghanistan’s trade unreasonable prospect of diversifying its
In 2016, Afghan trade volumes between has higher transaction costs than countries overall economy—with sizable anticipated
Afghanistan and its top trade partners rank with maritime ports; thus, when combined growth in its services sector—as well as
as follows: Iran at $2 billion USD, Pakistan with import tariffs, economic performance offering a much larger segment of its
at $1.3 billion USD, China at $1 billion USD, is affected. This implies greater net social population sustainable employment not
Turkmenistan at $700 million USD, and benefits from tariff reducing agreements only in the aforementioned sectors, but
Kazakhstan at $500 million USD. Trade with with its trade partners. also in the transport sector.
Pakistan decreased, while it increased with
Afghanistan’s top trading partner Iran. In Afghanistan’s immediate neighbors Supported by quantitative evidence
another trade measure, some of the top represent over 50% of Afghanistan’s total from the “Afghan Trade Report,” a viable
export destinations of Afghanistan are India trade volume (see Figure 1). At present economic strategy for Afghanistan involves
(USD $220 million), Pakistan (USD $199 Afghanistan has a trade agreement with making good on its accession to the
million), and Iran (USD $15.1 million). Tajikistan, numerous bilateral agreements WTO and negotiating new bilateral and
with Iran, and less than fully implemented multilateral trade and transit agreements
Yet the need for Afghanistan to increase its transit trade agreement with Pakistan. (Task Force for Business and Stability
regional and international trade is based in However, it is currently negotiating Operations in Afghanistan, 2014). Increasing
part on its inability to take full advantage trade agreements with Turkmenistan exports and trade volumes via three types
of its highly tradable commodities. and Uzbekistan (and already has a of trade agreements—the primary means
Afghanistan possesses what economists transport agreement with the former and of reducing the tariffs faced by Afghan
refer to as a “comparative advantage” in a a budding transit agreement with the exports—is expected to increase growth,
limited range of commodities, that is goods latter). New transit-trade agreements with revenue, and production in key sectors
that are either grown or extracted. In other Turkmenistan and Uzbekistan, combined of the Afghan economy. The bigger the
words, it produces a range of products in with the Lapis Lazuli Route and Chabahar reduction in tariffs, the larger the impact on
its energy, mining, and agriculture sectors Corridor Agreements (as well as the 2011 the product, energy, mineral, and services
more efficiently than a range of other Cross-Border Transport Agreement with sectors. WTO membership engenders the
countries. In straight forward economic the Kyrgyz Republic and Tajikistan) are largest tariff reduction; regional trade deals
terms, this means that all things being expected to significantly reduce the average with multiple parties to the agreements
equal, gains from trade are not difficult to transit costs between these countries. Bi offer the next largest reduction; and bilateral
achieve. and multi-lateral trade agreements are trade deals offer relatively smaller yet not
expected to expand growth opportunities insignificant tariff reductions.
However, while excessive export times for production and employment as trade
are a factor, in addition, Afghanistan faces and transit prospects increase. The modeling results demonstrate that if
a range of tariff and non-tariff barriers to Afghan trade partner tariffs are reduced by
trade with economies both within the Afghanistan stands to gain from increasing 10%, changes in Afghanistan’s economic
region and beyond. Moreover, it lacks the the volumes and distribution of its trade. By sector activity will have nominal effects.
infrastructure and regular stream of FDI that increasing the exportability of its primary However, the results for a 25% tariff decrease
traditional trading nations have in place. products, growing trade volumes are indicate broad gains in the product,
Although extracting Afghanistan’s mineral expected to benefit Afghan development resource, and energy sectors, as well as
deposits would generate a USD $2 billion in four primary ways: (i) increasing an unexpected but significant boost to the
yearly increase in the government’s annual government revenue; (ii) increasing overall Afghan service sector. As lower cost imports
budget (reserves of oil and natural gas could
be worth an additional USD $220 billion), FIGURE 1: COUNTRY SHARE OF TOTAL TRADE FOR AFGHANISTAN (2016)
between transaction costs, tariff barriers,
security challenges, and infrastructure IMPORT EXPORT
deficiencies, Afghanistan is not as well
placed to turn its vast mineral deposits
to its advantage as easily as conventional
wisdom would suggest.

Thus, in order to increase Afghanistan’s

private-sector led export-oriented growth
and decrease its dependency on foreign aid,
Afghanistan’s most viable strategy is to “go

10 Source: Central Statistics Organization


and exports increase aggregate economic necessarily involves gaining access to global
activity, this in turn will increase the demand trade markets as well as attracting foreign Pacific (UNESCAP), and the Organization
for services (including banking and financial capital. CAREC is helping to spearhead for Security and Cooperation in Europe
services, insurance, public administration, the dismantling not only of tariffs but also (OSCE). To expand their reach and overall
etc.). This projected outcome is underscored policy/legal barriers to trade in the region, effectiveness, both RECCA and the Heart of
by an increase in urban and rural formal and CAREC members have been joining Asia-Istanbul Process Platforms must enter
household sector income, which rise by the WTO in recent years just as Afghanistan into strategic, “win-win” alliances with each
over AFN 500 million. has – thus allowing them to reap similar of these organizations, as well as the earlier
multiplier effects and further diversification noted and closely related initiatives, namely
Postal and telecommunication services of their economics (as analyzed above with the: Belt-and-Road Initiative, Middle
exhibit substantial increases in activity, regard to Afghanistan). In addition to WTO Corridor project, Silk Wind project, and
while in the production sectors agriculture accession, the biggest boost for RECCA and follow-on activities previously associated
is estimated to receive a 6% boost with CAREC members would be to negotiate a with the U.S.-led New Silk Road initiative.
textiles moving up 7%, and electrical and region-wide comprehensive multilateral
machinery activity showing comparable trade and transit agreement. Combined Further elaborated in the concluding
increases. The expected results for a with joint RECCA-catalyzed infrastructure sections of the RECCA Annual Review 2017
50% decrease in tariffs demonstrate projects, the ultimate impact on economic (as part of a forward-leaning agenda known
cross-sector growth by another order of growth gains and rising living standards as “RECCA 2.0”), key elements of RECCA
magnitude, thereby indicating substantial from increased trade and infrastructure- and the Heart of Asia-Istanbul Process
net economic benefits for Afghanistan from related connectivity in the Central and partnership strategy with other regional
trade liberalization via preferential trade South Asian region will be considerable. platforms could include:

Through trade liberalization and increased

trade transit, Afghanistan is expected
to leapfrog from being a primarily
agrarian economy to having a mature SYNERGIES AT THREE LEVELS
services sector that would provide a
substantial number of low-skilled labor job
opportunities. Economic theory predicts Beyond the infrastructure and trade- • Analyzing the regional economic
merely that sizable benefits should accrue facilitation requirements, regional economic cooperation action programs, identifying
to Afghanistan (as a developing country) cooperation and deepened integration areas of possible overlap, convergence, and
from trade liberalization, with the principal can also benefit from synergies at three concrete collaboration.
gains from trade flowing from specialization additional, strategic levels: i) Between RECCA
in textiles and agriculture production. and other Regional Platforms; ii) Between • Embark on two or three regional economic
However, contrary to academic theory, Transport and Transit Corridors; and iii) cooperation projects, over the next 12-18
real world data-based simulations indicate Between and Within Economic Corridors. months, where a joint approach (including
that the benefits from trade are likely to be pooling of technical and financial resources,
diversified across the Afghan economy, with as well as political support) can accelerate
prominent growth in the services sector. 1. RECCA AND OTHER REGIONAL PLATFORMS progress on a public-private investment
Thus, dynamic gains from trade can be As detailed in Annex 3, Afghanistan opportunity in, for instance, the energy,
expected to result in substantial increases has participated in multiple regional transport, or communications sectors.
in economic growth, job creation, public organizations, in many cases for well
revenue, and the overall standard of living, over a decade, that are committed to • Explore common ways to leverage robust
all stemming from increasing Afghanistan’s expanding Eurasian economic cooperation resources and technical ingenuity from
integration in its regional and the wider and integration, including the Asian the private sector, governments, sovereign
world economy. Development Bank-facilitated Central Asia wealth funds, and regional development
Regional Economic Cooperation (CAREC) banks.
The implications of trade expansion for the program, the South Asia Association for
economies of neighboring and regional • Especially within the economic sector
countries are considerable. All of Central Regional Cooperation (SAARC), the associated with the joint regional
Asia is slated to benefit similarly from the Economic Cooperation Organization (ECO), economic cooperation project, encourage
reductions of tariffs and non-tariff barriers. the Shanghai Cooperation Organization collaboration in sectoral monitoring and
With Central Asian states landlocked akin (SCO), the Special Session of the Regional evaluation.
to Afghanistan, as well as being similarly Advisory Committee of the United Nations
endowed with natural resources and human Program for the Economies of Central Asia
potential, exploiting their comparative (UNSPECA), the United Nations Economic
advantages in traded goods and energy and Social Commission for Asia and the



trilateral cooperation frameworks including
Afghanistan-India-US; Afghanistan-
China-UK; Afghanistan-India-Iran; and RAIL LINE CROSS-BORDER ECONOMIC ZONE
Afghanistan-China-Pakistan have recently
placed a special focus on infrastructure ROAD
development and trade promotion,
contributing to greater connectivity TRANSMISSION LINE CITY BORDER CROSSING CITY
and expanded trade in the wider region.
Therefore, increased synergy between PIPELINE
RECCA and these trilateral cooperation


Transport and transit corridors connecting for the marked progress of the CAREC of Asia and exploiting both Afghanistan’s
Central Asia and South Asia, as well as China Corridors over the past decade is that their geographic location and abundant natural
with these two regions and Europe too, development has combined a focus on resources, they can also facilitate multiplier
have recently gained high momentum. The both hard (physical) and soft infrastructure effects by integrating fully investments in
Belt-and-Road Initiative (and the emerging investments, with the latter emphasizing Afghanistan’s private sector-led growth
six priority transport corridors promoted the harmonization of transport and trade engines—such as agri-business, mining,
by China), the Five Nations Railway procedures to reduce border-crossing times and small-and-medium-sized businesses—
Corridor, the Lapis Lazuli Route, and the and to facilitate the movement of goods and with the outward trade orientation,
Chabahar Corridor are among the most people. In short, they have improved and transportation and communications
important initiatives, each contributing to even transformed the conditions necessary networks, and energy resources essential
the establishment of integrated transport for establishing more multi-faceted and to a sustainable economy. These multi-
and transit systems at both regional and dynamic economic corridors. Once stood dimensional economic corridors can
continental levels. up, the more recently announced China- be realized by utilizing the RECCA-VII
initiated Belt-and-Road Initiative Corridors Declaration and Annual Review 2017
One of the most advanced transport are expected to fulfill similar functions. as planning tools for aligning short and
corridors to date are the Asian Development medium-term goals with longer-term
Bank-facilitated CAREC Corridors, with six economic development strategies.
major corridors under development that 3. ECONOMIC CORRIDORS
each aim to improve access between the A chief vehicle for advancing the goals Two identified Regional Economic Growth
10 CAREC countries and at least two large of the RECCA platform, including priority & Resource Corridors—with one stretching
Eurasian markets, as well as the warm-water regional cooperation and investment from the center of Afghanistan around
ports of Karachi and Gwadar. Afghanistan projects, has centered around rich, multi- Kabul and the Hajigak Iron-Ore Mine to
currently falls along three of the six corridors dimensional economic corridors termed Afghanistan’s northern neighbors, and the
(CAREC Corridors #3, #5, and #6), which “Regional Economic Growth & Resource other from Kabul and the Aynak Copper
were each selected based on assessment Corridors.” Defined as regionally integrated Mine to the south of Afghanistan into
again of five major criteria: i) current traffic development initiatives for bridging people Pakistan and the warm water ports of the
volume; ii) prospect of economic and traffic and key economic activities with essential Arabian Sea—could consist of the following
growth; iii) capacity to increase connectivity trade, transit, energy, and communications carefully aligned infrastructural components
between economic and population centers; enablers, they have the potential to serve as depicted in Figure 2. By constructing the
iv) potential to mitigate delays and other as regional economic game changers by infrastructural components simultaneously
hindrances; and v) and economic and generating significant returns to growth, alongside each other, significant cost
financial sustainability. A chief reason jobs, and revenue. Traversing large tracts savings and economies-of-scale can be


generated, benefiting both Afghanistan and BANKABLE INVESTMENT CRITERIA political value, in addition to its economic
its neighbors. As detailed at the outset of this Overview, value. With a full appreciation of this
since the very first RECCA forum (2005 in important distinction, and in recognizing
To fully leverage Regional Economic Kabul) and subsequent meetings in New and expecting the continued decline of
Growth & Resource Corridors, legal, policy Delhi, Islamabad, Istanbul, Dushanbe, Kabul, traditional donor assistance continues in
incentives, and regulatory frameworks and now Ashgabat, policy reform frameworks the coming years, the RECCA platform has
must undergo reform and continuous and regional cooperation & investment inaugurated a different approach to funding
nurturing once in place, in order to ensure projects have fallen mainly within one of critical regional cooperation and investment
proper enforcement and implementation. thematic categories: Energy, Transport projects.
These may take the form of new laws Networks, Trade and Transit Facilitation,
(e.g., to facilitate trade and the movement Communications, B2B (Business-to- Adopting this private sector approach,
of people), new policy incentives (e.g., to Business) and Labor Support, and Research, the following project feasibility criteria
encourage private investment and mitigate Monitoring & Evaluation. Priority projects have been applied to the featured RECCA
against excessive risk), and new regulations are found in the following pages in the projects:
(e.g., harmonizing transport and customs form of detailed Regional Cooperation and
procedures). Essential reforms may also Investment Project Overviews, and where • Must skillfully attract private sector
include the introduction of independent data is available, each project’s fundamental investment (i.e. be “bankable”).
authority structures—such as for roads and goals, projected rates of return, jobs,
rail—to strengthen public and private roles and public revenue generated, progress • Must link (directly or indirectly) to the
in delivery and in investment prioritization updates, identified risks and challenges, promotion of growth in trade, transit,
and sequencing. and recommended actions for sustaining or extractives.
progress are enunciated. In the form of
Unlocking the full potential of Afghanistan’s “deliverables”, these same recommended • Must put in place proper project
main drivers for economic expansion, actions are also presented in the Declaration management and governance
employment, and public revenue are of the Seventh Regional Economic arrangements.
fundamental to building a stable and Cooperation Conference on Afghanistan,
financially sustainable country. For convened from 14-15 November 2017 in • Must encourage innovative Public-
example, the Aynak and Hajigak mines Ashgabat, Turkmenistan. Private-Partnerships (PPP) in
require rail to efficiently move copper and support of broader kinds of private
iron-ore to rail links in Central Asia and The term “bankable” typically refers to equity participation / private sector
the ports of South Asia. A more favorable whether a development or business project development
and global trading regime could also opportunity is capable of being financed by
unleash Afghanistan’s world class marble, the private sector, while governments and • Must generate— above the opportunity
gemstones, grapes, raisins, almonds, saffron, donors can offer incentives—including in the cost of capital—sufficient cash flows
and pomegranates. Moreover, small-and- form of Public-Private-Partnerships (PPPs)— and positive Net Present Value and
medium-size enterprise owners—such in encouraging investment models that can Internal Rate of Return.
as those involved in the production of be replicated, scaled-up, and multiplied. In
rugs, wool, cashmere, and handicrafts— short, if a major transport, energy, or minerals • Can be implemented in a reasonable
repeatedly stress the importance of reliable extraction project is not bankable, then the timeframe of around 12-36 months
energy resources, alongside the rule of law, private sector is highly unlikely to finance (or significant returns on investment
as essential to their competitiveness. And a project. The private sector calculates the can be realistically expected shortly
with adequate transportation and energy risk of a particular investment in connection thereafter).
infrastructure, Afghanistan’s central location with carefully studies projected returns
at the crossroads of Asia means it is poised on investment over the short, medium, • Must place a premium on employment
to serve as a regional trade and transport and even long-term, whereas the public and public revenue in the region.
hub, providing considerable economic sector—including multilateral and bilateral
opportunities for the country and the wider donor partners—may or may not fund • Must put in place a clear risk
region. given project because of its strategic or management and mitigation plan.


1 TAPI Gas Pipeline
2 CASA-1000
3 TAP-500

4 The Belt and Road Initiative and Afghanistan
5 Lapis-Lazuli Transit, Trade & Transport Route Agreement
6 Chabahar International Transport and Transit Corridor
7 Five Nations Railway Corridor
8 Afghanistan Rail Network
9 Trans-Hindukush Road Connectivity Project


10 CBTA and TIR Convention
11 Special Economic Zones/Multimodal Transport and Logistics Facilities
12 Regional, Trade, Customs & Border Management Cooperation

13 Digital Silk Road


14 Enhancing Regional Business-to-Business Partnerships through a RECCA Chamber of
Commerce & Industries
15 Women’s Economic Empowerment through Regional Economic Cooperation
16 Regional Agro Food Industry Development
17 Labor Exchange & Remittances


18 RECCA Center for Research & Evaluation

Regional Cooperation & Investment Projects

Once completed, the estimated 1,814 an 85% share), Afghan Gas Enterprise, Inter enhance public communities support for
kilometers TAPI Natural Gas Pipeline, or State Gas Systems (Pakistan), and GAIL the TAPI project. In addition, the project’s
“Peace Pipeline”, is expected to export, (India), signed the project’s Shareholders Investment Agreement has been signed,
over three decades, up to 33 billion cubic Agreement. outlining its two-phase implementation:
meters of natural gas per year from (i) Pre-Final Investment Decision; and (ii)
Turkmenistan to Afghanistan, Pakistan CURRENT STATUS Final Investment Decision, led by the TPCL
and India. An independent study of TAPI During the past twelve months, the Ministry (now established in Dubai). As per the
calculated an Economic Internal Rate of of Mines and Petroleum had worked toward Investment Agreement, Afghanistan has
Return of 16.8 percent for the project, the completing a number of new agreements paid its first installment of shares; where the
generation of thousands of construction, with the project’s other three partner share certificate is issued to the Afghan Gas
operation, and maintenance jobs, and the countries, including a Pipeline System Enterprise. A Detailed Route Survey package
estimated annual revenue for the Afghan Rules Agreement, a Host Government has also been finalized by the consortium,
treasury is around USD $400 million. After Agreement, and a Transportation with 14 tenders made in response to 108
preliminary discussions beginning in Agreement (each to then be subsequently RFPs, whereas soon the Detailed Route
the 1990s, the Asian Development Bank discussed with the TAPI Pipeline Company Survey, Design and Engineering of TAPI
managed feasibility studies in 2005 and Limited, “TPCL”). In addition, the Ministry Project will be completed in Afghanistan.
2008 and, in 2013, it started serving as the held numerous technical working group TAPI is an integral part of the Government
TAPI project Secretariat and Transaction meetings with TPCL to discuss the project of Afghanistan’s National Infrastructure Plan.
Advisor. On 13 December 2015, the financing and finalize the financial advisory
President of Turkmenistan, H.E. Gurbanguly service agreement between TPCL and the
Berdimuhamedov, the President of Asian Development Bank and discuss the Recommended Actions by
Afghanistan, H.E. Ashraf Ghani, the Prime project design, engineering and the project RECCA-VII and Beyond:
Minister of Pakistan, H.E. Nawaz Sharif, and implementation phases. Furthermore, the
the Vice-President of India, H.E. Hamid Ministry hosted the Front End Engineering • Signing of the Pipeline System Rules
Ansari signed a Memorandum on Energy and Design works inauguration of the project Agreement, a Host Government
at a groundbreaking ceremony in Mary, and is currently facilitating design and survey Agreement, and a Transportation
Turkmenistan (near Galkynysh Gas Field) work in Afghanistan (following the contract Agreement.
to commemorate the start of the pipeline’s signing, on 17 January 2017, between TPCL
construction, to be completed by 2020. In and ILF Beratender Ingenieure GmbH and • Commencement of construction work
addition, State Concern TurkmenGaz (with held numerous visits and conferences to on the TAPI pipeline (to be completed by
Budget & Funding USD $7.5 billion for the pipeline and $15 billion for the gas field
Status • Support the TPCL in convening
more steering committee site visits to
Institutional TAPI Pipeline Company, Ltd. (TurkmenGaz, Afghan Gas Enterprise, accelerate pipeline construction and
Partners Inter State Gas Systems, and GAIL), Turkmenistan, Afghanistan, more investment road shows around the
Pakistan, India, Japan, the Asian Development Bank, and a con- world to raise additional funds.
sortium of Japanese and Chinese companies

Regional Cooperation & Investment Projects


Over a projected 15-year project life-span, CURRENT STATUS Once the transmission line’s construction is
CASA-1000 will provide the hardware During the past twelve months (through initiated in 2018, the 500kV line extension
(physical infrastructure) and software CASA-1000 secretariat supported in Afghanistan will run an estimated length
(institutional and legal framework) to enable coordination meetings in various of 563 km from the crossing point of Sher
1300 MW of surplus electricity to be traded configurations, and following delays in Khan Bander in Tajikistan through the
each summer between the Kyrgyz Republic 2016, especially due to convertor station Afghan provinces of Kunduz, Baghlan,
and Tajikistan in Central Asia and Afghanistan disagreements), marked progress has been Panjsher, Kapisa, Kabul (Sorubi) Laghman,
(receiving 300 MW of electricity) and, in South made in the following key areas: and Nangahar, reaching the Torkham
Asia, Pakistan (receiving the remaining lion’s Gate crossing point into Pakistan. The
share of power of 1000 MW). If agreed by the • Afghanistan Transmission Line total estimated length, between Sangtuda,
four participating countries, the project could Procurement has been concluded, and Tajikistan and Nawshehra, Pakistan is 765
be extended for another 15-year period. by mid-November 2017, a contract km. CASA-1000 is a central part of the Afghan
With an estimated economic Internal Rate signing ceremony is expected for this Government’s National Infrastructure Plan.
of Return of 15.6 percent, according to one 563 km transmission line.
independent study, CASA-1000 is projected • The evaluation of bids for procurement
to generate public Afghan revenues between contracts for other key components Recommended Actions by
USD $88 and $175 million per annum and of the CASA-1000 project is underway RECCA-VII and Beyond:
catalytic (indirect) employment opportunities (including Converter Stations in Pakistan
of over 100,000. The World Bank has helped and Tajikistan and Transmission Lines • Complete the CASA-1000
to convene, for over a decade, a CASA 1000 AC and DC in Pakistan, the Kyrgyz environmental and social impact surveys,
participating countries technical working Republic, and Tajikistan). as well as the additional project design
group to achieve progress towards the • The Owners Engineer Bids Evaluation work in Afghanistan.
commercial negotiation of a sales and Report has been sent to the World Bank
electricity transmissions operating agreement. for approval. • Finalize, by the first quarter of 2018,
In particular, the signing of a Memorandum • The Environmental and Social the selection and contracting of the
of Understanding by the four participating Impact Assessment (ESIA) report has project’s engineering firm to minimize
countries, in 2011 in Bishkek, represented a commenced, and soon a resettlement delays in completing the HVDC line in
critical breakthrough for the regional energy plan for affected communities will be Afghanistan, Tajikistan, and Pakistan.
project. CASA-1000 is expected to begin awarded to a consulting company.
providing energy by early 2022. • Begin to lay groundwork now on
foreseeable challenges related to
Budget & Funding USD 1.2 billion security, topography, indemnity
Status payments to private land holders along
the transmission line route, and the
Institutional Afghanistan, the Kyrgyz Republic, Tajikistan, Pakistan, the World timely administration of donor payments.
Partners Bank, Islamic Development Bank, European Investment Bank, and

Regional Cooperation & Investment Projects

underway for identifying a consulting firm
to undertake initial survey and design work,
as well as to prepare the project’s scope of
work and International Bidding Documents
(IBD). To date, there continues to be no firm
Through the proposed Turkmenistan- commitment made by prospective donors
Afghanistan-Pakistan 500-kV Line (TAP- and international financial institutions—in
500) project, Turkmenistan seeks to export the form of grants or loans—to the project.
year round power to both Afghanistan and Similar to TAPI and CASA-1000, Afghanistan
Pakistan (building on its power exports to can perform the important role of transit
Afghanistan since 2002). Turkmenistan to CURRENT STATUS country for TAP-500, paving the way for
generate for available export, by 2020, some Following the signing of the TAP-500 one-day achieving the creation of a Central-
3,500 MW of excess power. In connection project’s Memorandum of Understanding, South Asia regional electric grid powered
with TAP-500, Turkmenistan has already in December 2015, by the President by these regional mega-energy projects.
commissioned (for completion by 2018) a of Turkmenistan, H.E. Gurbanguly The project has the potential to serve as an
220-kV transmission line between Yolotan, Berdimuhamedov, the President of important part of the Afghan Government’s
Turkmenistan, and Serhetabat on the Afghanistan, H.E. Ashraf Ghani, and the National Infrastructure Plan.
border with Afghanistan, and consequently, Prime Minister of Pakistan, H.E. Nawaz
Afghanistan plans to synchronize its power Sharif, the project coordination and a way
grid with Turkmenistan; it further proposes forward was agreed upon by all three Recommended Actions by
the building of a larger 500-kV line through partner countries with technical support RECCA-VII and Beyond:
Afghanistan between Serhetabat and Spin provided by ADB. A TAP-500 Ministerial
Boldak on the border with Pakistan. Facing Statement will be discussed and signed • Sign the TAP-500 Ministerial Statement
a significant energy crisis and deficit with on the sidelines of RECCA-VII in Ashgabat. on the sidelines of RECCA VII in
significant daily load shedding, Pakistan is Three technical level meetings were also Ashgabat.
also open to the idea of interconnections held between these countries, coordinated
with the proposed 500-kV line through its by the project secretariat, in 2016 and 2017. • Prepare technical assessment and
substation and transmission lines beginning In addition, an “Interconnection Scoping design plan for the TAP-500 project.
in Chaman, just across the border from Spin Study” has recently been undertaken for the
Boldak, Afghanistan. project, and the selection process is well • Finalize the project’s coordination and
monitoring mechanism.
Budget & Funding The ADB is prepared to draw upon its USD $1.2 billion Energy
Status Supply Improvement Investment Program for Afghanistan • Approve financing from public and
private sources (2018) and commence
Institutional Turkmenistan, Afghanistan, Pakistan, and the Asian Development with project execution (2019), taking into
Partners Bank. account important social, environmental,
and security factors.

Regional Cooperation & Investment Projects

an effort to promote increasing economic

growth.” Well-resourced in both financial
and human capital, BRI is poised to
serve as an integral element of the
Afghan Government’s Infrastructure and
THE BELT-&-ROAD INITIATIVE & Connectivity Development and Private
AFGHANISTAN Sector Development National Priority
The silk road through Afghanistan Programs.

During a state visit by H.E. the Chief Executive to effectively contribute to the wider A number of joint academic activities and
of Afghanistan, Dr. Abdullah Abdullah to objectives of the Belt-and-Road Initiative. site visits have been held both in China and
China, in May 2016, the Afghan and Chinese Afghanistan under the BRI. A new trilateral
Foreign Ministers signed a Memorandum CURRENT STATUS cooperation framework has recently been
of Understanding to boost various areas In August 2016 the first Chinese train initiated between Afghanistan, Pakistan, and
of cooperation between the two countries traveled from western China to Afghanistan, China with a view to promote economic
under the Belt-and-Road Initiative (BRI). First via a winding route through Kazakhstan cooperation among the three countries
proposed by China in 2013, the initiative and Uzbekistan, arriving at the land port within the Belt and Road Initiative and
is a major regional economic trade and of Hairatan in September. Commercial RECCA. Two meetings of this framework
infrastructure platform, aimed at building freight goods valued at USD $4 million have so far been held in Beijing and Kabul
connectivity between China and the rest of were transported 7300 kilometers in 14 respectively. In addition, in mid-2016
Eurasia, primarily by way of the ocean-based days). Achieving this landmark connectivity Kabul-Urumqi flights resumed. Additionally,
“Maritime Silk Road” and the land-based “Silk milestone signaled the arrival of the Afghanistan became a permanent member
Road Economic Belt.” This initiative seeks to new “Sino-Afghanistan Special Railway of the Asian Infrastructure Investment Bank
integrate the wider region into a cohesive Transportation Project,” which is slated to (AIIB) in October this year, which will further
economic area by broadening trade, reduce trading costs between both nations facilitate cooperation on infrastructure
constructing infrastructure, and promoting by 30%. Together both sides have made development between the two countries
cultural exchanges. Given its location at the initial plans for a transit schedule of two under the BRI and RECCA.
crossroads of Central, South, and Southwest trains per month. From China, they will
Asia, Afghanistan is well placed to partner transport textiles, electronic products, and
with China and connect to the wider region construction materials inter alia; returning Recommended Actions by
via BRI. from Afghanistan, the trains will carry, RECCA-VII and Beyond:
marble, leather, wool, cashmere, saffron,
China has planned to build northern, central, dried fruit, and pine seed inter alia. • Build on the successful launch of the new
and southern belts, with the northern belt trans Asian railway project, identify and
going through Central Asia and Russia to The MoU states “[t]he two sides shall jointly pursue other areas of BRI-related regional
Europe; the central belt traversing Central promote cooperation on the One-Belt-One economic cooperation, including in the
Asia and West Asia to the Persian Gulf and Road Initiative in a bid to realize the goal of areas of energy development, natural
the Mediterranean; and the southern belt common development, and translate the resource extraction, and financial services.
starting from China and proceeding to advantages of solid political ties, economic
Southeast Asia, South Asia, and the Indian complementarities, and people-to-people • Further promote the trilateral economic
Ocean. Afghanistan is, therefore, positioned exchanges into pragmatic cooperation in cooperation framework within the Belt
and Road Initiative.
Budget & Funding China has pledged investments totaling more than USD $100
Status billion to the countries of Greater Central Asia to be sourced, in • Intensify efforts to transform Afghanistan
part, from a USD $40 billion Silk Road Fund and the new Asian into a regional trade and transit hub by
Infrastructure Investment Bank (AIIB) expanding current trade and transport
Institutional Afghanistan, China, the Central Asian Republics, Pakistan, and a agreements both northward and
Partners growing number of Eurasian countries are associated with the BRI southward to connect with the rapidly
growing Belt-and-Road Initiative corridors.

Regional Cooperation & Investment Projects


Since its initiation in 2012 the Lapis Lazuli CAREC Transport Corridor #2, stretching Corridor Project (“East-West Trans-Caspian
Transit, Trade & Transport Route Agreement from Aqina in northern Faryab province Trade and Transport Corridor”) and will
has been developed with a view to and Torghundi in western Herat (both in also compliment other regional transport
enhancing regional economic integration Afghanistan), and continuing to the port corridors such as the Five Nations Railway
and trade-based connectivity between the of Turkmenbashi in Turkmenistan (on the Corridor. The poject has the potential to
countries of Afghanistan, Turkmenistan, Caspian Sea); the route then continues on serve as an important part of the Afghan
Azerbaijan, Georgia, and Turkey. Lapis- to Baku and further onward to Tblisi, as well Government's National Infrastructure Plan.
Lazuli makes a notable contribution to as the Georgian ports of Poti and Batumi;
building an integrated transit and transport finally, the corridor connects to the cities of
system among the contracting parties, Kars and Istanbul, Turkey, at the entrance of Recommended Actions by
and beyond by expanding economic and Europe. RECCA-VII and Beyond:
cultural links between Asia and Europe.
The name “Lapis Lazuli” is derived from CURRENT STATUS • Following the signing of the Lapis Lazuli
the historic route that Afghanistan’s lapis Three technical meetings on the Lapis Lazuli Corridor agreement which is expected
lazuli and other semiprecious stones were Route Agreement have been held, with the to take place on the sidelines of RECCA
exported along, over 2,000 years ago to final one in November 2016 in Baku, where VII in Ashgabat, the internal procedures
the Caucasus, Russia, the Balkans, Europe, the participants finalized the text of the of the contracting parties required for
and North Africa. The project will serve agreement. The official signing ceremony the entry into force of the Agreement
to reinforce the Afghan Government’s will take place on the sidelines of RECCA-VII need to be completed at the earliest
National Infrastructure Plan and the Private in Ashgabat this year. Lapis Lazuli’s projected possible with a view to ensure expeditious
Sector Development National Priority impact is considerable not only because implementation of the agreement.
Program. The Lapis Lazuli Corridor is also most of the needed infrastructure is already
geared toward expanding the economic in place, but also because most of the • Ensure financing needs for required
opportunities of citizens in the wide range investment required will focus on improving feasibility studies and the project’s long-
of countries who will benefit from this new policy and governance. The Economic term infrastructure maintenance (O&M).
transport corridor. The provision of facilities Rate of Return and Net Present Value still
for transit and simplification of customs need to be established, but with a discount • Key priorities under the initiative in the
procedures constitute two important pillars rate applied at 12%, the overall returns are medium to long term include: 1) improve
of cooperation under the agreement. The expected to be positive. The Lapis Lazuli road conditions and transit facilities
Lapis Lazuli Corridor encompasses part of Corridor will connect with Turkey’s Middle along major highways; 2) expand rail
links between Afghanistan and Turkey
Budget & Funding Current project estimates exceed USD $2 billion and beyond; 3) improve multi-modal
Status land ports in priority places in each of
the five Lapis Lazuli Route countries; and
Institutional Afghanistan, Turkmenistan, Azerbaijan, Georgia, and Turkey 4) undertake a Cost-Benefit Analysis on
Partners establishing Cross-Border Economic (Tax
Free) Zones between the countries along
the corridor.

Regional Cooperation & Investment Projects


The Chabahar Agreement, officially known Trade Industrial Zone. Projected benefits Crossing Points to analyze extant obstacles
as the International Transport and Transit to the Agreement’s signatories include the and challenges faced by drivers and traders.
Corridor, aims to create a new transport following: Chabahar’s strategic location at Subsequently an Implementation Plan was
corridor for the uninhibited shipment of the crossroads of the expanding “North- drafted by the Afghan Ministry of Transport
goods through Iran’s Chabahar Port between South Corridor,” major investment from and presented to the cabinet. Currently the
Afghanistan, India, and Iran. The Chabahar India in the port’s facilities, importation of
Agreement comprises two principal aims: duty-free raw materials and machinery,
1) facilitate access to international markets and investment guarantees through the
by using land, sea, and/or air transportation Iranian government and Iranian insurance implementation plan is being reviewed by
through Chabahar Port; and 2) simplify, companies. Afghanistan is expected to a committee consisting of delegates from
harmonize, and standardize procedures benefit substantially from what effectively the Ministry of Foreign Affairs, Ministry
governing the tri-country transport and will be the most efficient access to the sea of Finance, and Ministry of Transport to
transit of goods and passengers. India has for this land-locked country, while altogether improve the plan and specifically make
invested significantly in Afghanistan’s Zaranj- the Chabahar Agreement’s corridor is progress on a Draft of Single Project Plan
Delaram Highway, a 135 mile long highway positioned as a pronounced pathway for for a “model” dry port in Zaranj (with the full
that connects Zaranj near the Iranian border Indian, Iranian, and Afghan trade throughout range of customs, banking, cold storage,
with Delaram and the Afghan-Iranian the region and beyond to Europe and China. and logistics services provided). On 29
border with the Kandahar-Herat highway October the first shipment of wheat from
in Delaram. The highway connects the CURRENT STATUS India to Afghanistan was shipped through
Chabahar port to the 1,300-mile Afghanistan The International Transport and Transit the Chabahar port in Iran. The wheat
Ring Road and 16 of Afghanistan’s 34 Corridor Agreement (also known as the shipment is a landmark achievement, for
provinces. Thus it creates North-South Chabahar Agreement) was signed in Tehran it will pave the way for operationalization
transport corridors linking the Indian sub- (May 2016) by India, Iran, and Afghanistan. of the Chabahar port as an important
continent and land-locked Central Asia. Subsequently approved by the Cabinet connectivity corridor for Afghanistan. The
The new infrastructure enables Afghanistan and ratified by the Afghan Parliament, the project has the potential to serve as an
to access the Arabian Sea through Iran, Chabahar Agreement constitutes the arrival important part of the Afghan Government's
and raises its potential to stimulate more of a major new route for the transport and National Infrastructure Plan.
investment from trade with advanced transit of goods and passengers through
economies like India’s. Representing a pillar Afghanistan, India, and Iran as carried Recommended Actions by
of the Afghan Government’s Infrastructure out by multiple modes of transport along RECCA-VII and Beyond:
and Connectivity Development National the routes approved by the Coordination • Maintain support for key Chabahar Port
Priority Program, the agreement follows Council (in accordance with Article 9 of the infrastructure improvements
on from the recent introduction of fifty Agreement). Delegates from the ministries • Schedule a Coordination Council
Afghan companies to the Chabahar Free of Transport visited Afghanistan-Iran Border Meeting among the Chabahar
contracting parties, in order to prepare
the three protocols of Transit, Customs,
Budget & Funding Feasibility studies currently ongoing
and Consular issues.
• Proceed to finalize the general
Institutional Afghanistan, India, Iran procedures of the Chabahar Agreement.

Regional Cooperation & Investment Projects

and commencement of construction

of Sherkhan Bandar-Kunduz-Mazar-i-
Sharif (187 km); the detail design and
FIVE NATIONS RAILWAY commencement of construction of the
CORRIDOR Mazar-i-Sharif - Shiberghan (170km) line; and
the feasibility study and commencement
(CHINA, KYRGYZ REP., TAJIKISTAN, of detail design and construction of the
AFGHANISTAN, & IRAN) Sheberghan—Maimane—Qala-e-Now—
Kushk (472 km). The Five Nations Railway
Corridor is poised to help advance Afghan
Government’s National Infrastructure Plan.


The Five Nations Railway Corridor aims to PROJECT STATUS
increase regional commerce and spur job # RAILWAY PROJECT (KM) Prefeasibility Study Feasibility Study Detail Design & Construction
creation along with larger trade volumes. 1 Khaf – Herat, 4th Section, Phase-1 43 Completed Completed Plan
This project connects China on one end
2 Sherkhan Bandar – Kunduz - Mazar-e-Sharif 187 Completed Completed Plan
and Iran on the other over a total distance
3 Mazar-e-Sharif – Sheberghan – Andkhoy 220 Completed Completed Plan
of 2,100 kilometers, traversing the countries
4 Sheberghan – Maimana – Qala-e-Naw – Kushk 472 Completed Ongoing Plan
of the Kyrgyz Republic, Tajikistan, and
Afghanistan in the process. Over one 5 Khaf – Herat 3rd Section 62 Completed Completed Ongoing

thousand kilometers of the rail corridor will 6 Torghundi – Herat Airport 173 Completed Completed Plan
stretch through the Afghan provinces of
Herat, Badghis, Faryab, Jawozjan, Balkh and CURRENT STATUS
Kunduz. The wider economic impact on The Five Nations Railway Corridor has
trade and transit will be sizable, including been discussed under the Economic Recommended Actions by
opportunities to invest in spurs and spinoff Cooperation Organization (ECO). Overall RECCA-VII and Beyond:
projects. The Afghan section of the rail line progress is steady, as a range feasibility
will be partially funded by the ADB and studies for the Afghan portion have been • It is critical for the five partner nations
improve Afghanistan’s access to the Iranian completed, including a preliminary design to maintain momentum by entering
ports of Chabahar and Bandar Abbas, for an initial 654 kilometer segment passing into discussions with potential financing
providing ample opportunity for another through Afghanistan, and negotiations on partners (public and private) for the
order of magnitude of trade expansion. financing are also moving forward. Five Afghanistan segment of the rail corridor.
In addition, via Turkey and Iran the Five out of six feasibility studies are complete
Nations Railway Corridor will connect (see table below). Most significant, multiple • Over the near-term (6-12 months), the
the Common-wealth of Independent construction elements of the corridor are feasibility study and preliminary design
States countries to Europe. Afghanistan is to be completed, including the Fourth need to be completed for the initial 654
well situated to amass sizable economic Section of Khaf—Herat (Ghorian–Robat kilometer segment of the total 1148
benefits at the heart of this critical Eurasian Paryan) (43km); Kolkhozobod-Panji Poyen kilometers to traverse Afghanistan.
rail corridor as it comes on line. (Tajikistan, 50 km); the detail design
• Over the medium-term (1-3 years),
construction should be completed of the
Budget & Funding Current project estimates exceed USD $2 billion
full Afghanistan section (1148 kilometers)
and other segments of the Five Nations
Institutional China (including the Bank of China), the Kyrgyz Republic, Railway Corridor.
Partners Tajikistan, Afghanistan, Iran, the ADB, World Bank, and United



Dostyk Alashankou

Black Sea
Caspian Sea Bishkek

Istanbul Taskhent
Ankara Khujand
Kars Turkmenbashi TURKMENISTAN
Galkynysh Aqina Bandar
Andkhoy Kunduz

Torghundi Jalalabad
Tehran Chaghcharan Kabul Torkham Peshawar
IRAQ Islam Qala Herat Nili
Mediterranean Sea Ghulam Khan Nowshera
Delaram Kandahar
Zaranj Spin Boldak Chaman Fazilka
Country Border Quetta
Zahedan Multan
Transit Roads KUWAIT Baramacha
CASA-1000 Kuwait City
TAP-500 kV
Persian Gulf Bandar Abbas New Delhi
Sino-Afghan Freight Route, OBOR
Lapis Lazuli Corridor BAHRAIN INDIA
Chabahar Corridor Riyadh Doha
Manama Chabahar Gwadar
Five Nations Railway Corridor Karachi
Digital Silk Road SAUDI ARABIA QATAR Dubai
Gulf of Oman
Capital Abu Dhabi
Province/City Muscat
Dry Port
Sea Port OMAN

The borders presented do not necessarily represent

the official view of the Government of Afghanistan.
22 Red Sea ARABIAN SEA 23
Regional Cooperation & Investment Projects

AFGHANISTAN RAIL considers the Herat-Mazar-Sherkhan Bandar

NETWORK and Aqina branches. Recent assessments
have concluded that while a “dual gauge”
CURRENT STATUS (Standard and Russian) is needed for trains
The first train carrying freight containers traveling north from Afghanistan, Standard is
from Nantong in eastern China and—after deemed the preferred rail gauge system for
The Afghanistan Rail Network project passing through Kazakhstan and Uzbekistan— the national rail network. The Afghanistan
aims to construct a trans-Asian rail reached the northern Afghan border town Rail Network serves as a pivotal part of
network throughout the country. The and port of Hairatan on September 7, the Afghan Government’s Infrastructure
Afghanistan National Railway Plan (ANRP) 2016 (7300 kilometers in fourteen days). and Connectivity Development National
seeks to establish Afghanistan as a On the same day, the Afghan and Iranian Priority Program. The following railway
regional transportation hub and meet the Governments commenced with track laying segments connecting Afghanistan with the
transportation needs of the agriculture, for the remaining 62 km section (between neighboring countries are under different
manufacturing, mining, and other economic the Afghan border town of Shamtigh and phases of pre-feasibility or feasibility studies:
sectors. It provides corridor access to Rozanak) of the 225 km Khaf (Iran) to Aqina – Andkhoy – Shiberghan; Torghundi-
regional networks, including with Iran, Herat rail line the third section of which is Herat; Chaman-Spinboldak-Kandahar;
Russia, and China. The Afghanistan Railway expected to be completed yet this year. In Jalalabad – Torkham; Lashkargah-Bahram
Authority (ARA), which is the independent 2013, the Presidents of the Governments of Chah; Chabahar – Zaranj – Farah. The project
agency responsible for legal and regulatory Turkmenistan, Afghanistan, and Tajikistan has the potential to serve as an important
policies governing rail operations and signed a MOU to develop a rail corridor part of the Afghan Government's National
development, is responsible for the ANRP. between the three countries, which is now Infrastructure Plan.
Conservative estimates stipulate that the part of related planning for the Lapis-Lazuli
Afghanistan Rail Network will generate Transit, Trade, & Transport Route Agreement Recommended Actions by
more than 50,000 new direct jobs and and the Five Nations Railway Corridor. RECCA-VII and Beyond:
over 200,000 indirect jobs. The rail network
will act as a crucial connective element of The ANRP classifies part of the Northern line • Stemming from the Afghanistan National
future Multimodal Transport and Logistics as “high priority” that expands the existing Railway Plan, prioritize the construction
Facilities. With the ability to carry 20 to 75 km line running between Haraitan and of the Afghanistan Rail Network in the
30 million tons of cargo annually through Mazar-e-Sharif, connecting the Central Northern Zone (Sherkhan Bandar-
Afghanistan, the rail network will supply the Asian Republic (CAR) countries and Iran via Kunduz-Mazar-Shibergan-Herat), with the
Government with increased customs duties Afghanistan. This follows on from the ADB Southern Zone (Kandahar-Spin Boldak)
and transit fees. The first train in Afghanistan Railway Development Study, which led to the expected to operate by 2020 and the
ran on the completed Hairatan to Mazar-i- construction of the line between Haraitan Eastern and Western Zones in 2025 and
Sharif rail line with in 2011. and Mazar-i-Sharif. Phase II of that study Central and Northeastern Zones by 2030.
• Expand the existing 75 km line running
between Haraitan and Mazar-e-Sharif, as
Budget & Funding Hairatan-Mazar-i-Sharif (USD $165 million), Khaf-Herat (USD
well as the 225km line running between
Status $141.8 million), Five Nations Railway Corridor (est. USD $2 billion),
Khaf and Herat, with each as a “high
Turkmenistan-Afghanistan-Tajikistan Rail Corridor (est. USD $810
priority,” connecting the Central Asian
Republic (CAR) countries and Iran via
Institutional Afghanistan, China, Iran, Italy, Pakistan, Tajikistan, Turkmenistan, Afghanistan.
Partners United States, Uzbekistan, ADB, and the EU

Regional Cooperation & Investment Projects


The Trans-Hindukush Road Connectivity

Project (THRCP) aims to improve road
transport connectivity throughout the
Hindukush mountain range. The first of
two components of this project comprises
road construction and rehabilitation: civil
works for the construction of the Baghlan
to Bamiyan (B2B) road and rehabilitation
of the Salang road and tunnel; consulting
services, including for the supervision of
civil works and for regular technical audits
by an independent international auditor;
and equipment. The second component
involves requisite institutional support and USD $31.37 for the related Salang Corridor for the major maintenance rehabilitation
project management component, which Rehabilitation Project. The project scheme to address the historical challenges
consists of the following: asset management represents a central element of the Afghan of the Salang Pass and assure its future
for trans-Hindukush roads, road safety, Government’s National Infrastructure Plan sustainability. Finally, the feasibility and
community engagement, training, capacity and Connectivity Development National detailed design study of the new Salang
building and institutional development, and Priority Program. pass has been awarded to an Australian
project management support. Construction company named SMEC international.
of the B2B road and rehabilitation of Salang Since 2016 the THRCP has completed The company is expected to carry out a
tunnel and road will require the use of its Preparation Stage and moved into feasibility study based broadly on three of
thousands of unskilled laborers and will its three-year Implementation Stage. the USAID-identified options.
generate millions of additional labor days. UNOPS has been contracted as the
Implementation Consultant, which
will provide Fiduciary Management, Recommended Actions by
CURRENT STATUS Procurement, and development of the RECCA-VII and Beyond:
In 2015 the THRCP was approved by Operation and Maintenance (O&M) strategy
the World Bank Board of Governors, and to ensure future sustainability of this critical • Ensure adequate resources and
the project became effective in January corridor. Construction contracts have properly trained construction
2016. The Project Management Team been successfully procured for 2 of the management teams and local private
(PMT) of the Ministry of Public Works is 6 segments that comprise the new B2B contractors are available for the design,
procuring several types of contracts. The highway, and the remaining 4 segments are building, and maintenance of the B2B
Government has approved the budget, being progressed in line with the current road and Salang road and tunnel.
which includes funding for land acquisition project program. Significant progress on
and resettlement. It is estimated that for design of one other segment is under way, • Engage local communities affected
the project about USD $170 million will and the remaining two segments are under by the THRCP, so that they are part
be spent on the B2B highway, USD $55 survey. of the solution and recognize the
million will be spent on the Salang road benefits that will accrue for them: this
and tunnel, while the remainder of USD An initial condition survey has been approach and sense of ownership by
$15 million will be spent on goods and completed for critical elements of the Salang local communities will help to mitigate
services benefitting both roads, along with Pass. Procurement is under way to contract security concerns and delays to the
USD $10 million for institutional support and a capable expert international consultancy project implementation.
project management. In addition, the Asian to undertake a desk review, investigation,
Development Bank has recently committed and design and prepare tender documents • Note that the security of people,
plant/equipment, and construction,
which directly correlate to progress, is a
Budget & Funding USD $255 million (World Bank) and USD $31.37 million (ADB)
significant risk at these remote locations
in relation to the ongoing security
Institutional Afghanistan (Ministry of Public Works), World Bank, UNOPS, Asian situation in the country.
Partners Development Bank

Regional Cooperation & Investment Projects

for production and employment. These with India’s accession it has become the
aspects were conducive to Afghanistan’s 71st country to join the TIR convention.
implementation of the International Road The TIR Convention allows Afghan trucks
Transport TIR Convention (the Customs to travel more efficiently to distant markets
Convention on the International Transport by exempting customs guarantees during
of Goods Under Cover of TIR Carnets), which transit (until reaching their final destination).
The Cross-Border Transport of Persons, it ratified in 2013. The TIR system will address In order to streamline implementation of
Vehicles, and Goods Agreement (CBTA) most of the current problems created by the the TIR convention, a National Committee
between Afghanistan, Tajikistan and the customs offices of neighboring countries for and Technical committee were formed
Kyrgyz Republic is aimed at facilitating the transit of Afghanistan’s commodities. The and an implementation plan was prepared
commercial activities between the three TIR will also facilitate the international transit by the Ministry of Transport of Afghanistan
countries with a view to stimulating regional and transport system as overseen by the and finalized by both committees. Finally,
job creation, balance economic growth, International Transport & Road Organization, the TOR for line ministries are specified and
and generate public revenue. The CBTA and govern transit and transport visas and last year 16 TIR Carnets were distributed
possesses considerable potential to improve licenses for sealed commercial commodities. by the Afghan Chamber of Commerce and
the Central Asian sub-region’s trade and Industries.
transit policy/facilitation and investment CURRENT STATUS
environment, including by supporting The Government of Afghanistan signed the
improved customs collection efficiencies CBTA’s accession agreement on 10 December Recommended Actions by
and establishing border liaison offices in 2011, preceded by the Government of RECCA-VII and Beyond:
these three countries. Designed around Tajikistan signing on 23 November 2011 and
CAREC Transport Corridor #5, which followed by the Kyrgyz Republic signing on 23 • Extend the CBTA to Kazakhstan in
connects Pakistan with China, CBTA has July 2013. However, the internal procedures order to expand regional transport
the potential to reduce the average transit of the contracting parties required the entry opportunities.
costs between its signatories, lower import into force of the CBTA between the three
costs among them, and make exports more countries have not yet been completed. • Complete the internal procedures
price competitive. As export prospects Officials from these governments are required for entry into force of the
increase, measures to improve transport interested in extending the current CBTA Agreement.
along this critical corridor are projected to Kazakhstan. Afghanistan has acceded to
to lead to expanded growth opportunities and implemented the TIR Convention, and • Encourage other regional countries
to complete their accession to the TIR
Budget & Funding n/a Convention.
• International partners including the
Institutional Afghanistan, Kazakhstan, The Kyrgyz Republic, Tajikistan, and the Asian Development Bank (ADB) are
Partners Asian Development Bank, USAID encouraged to provide additional
technical assistance in order to facilitate
further CBTA negotiations.

Regional Cooperation & Investment Projects

land and/or possibly rehabilitating extant dry

SPECIAL ECONOMIC ZONES, ports with under-developed infrastructure.
A key timely analysis concluded that out of
MULTIMODAL TRANSPORT Afghanistan’s current twelve dry ports, only
& LOGISTICS FACILITIES four are actively operating. Of these the most
active is Hairatan, which is managed by the
Strauss Company—along with Toraghundi
and Aqina—while Dubai’s DP World has
expressed interest in developing dry ports at
The Special Economic Zones / Multimodal estimated that over a thirty-year period, SEZs Hairatan and Torkham. Multiple government
Transport and Logistics Facilities project will increase the current GDP, exports, jobs, ministries are supporting a coalition of
aims to increase trade and transit along and revenue by sizable increments. Afghan business leaders to form a Public-
regional transport corridors that crisscross Private-Partnership for development and
Afghanistan, by establishing specified land- Multimodal Transport and Logistics Facilities operation of three facilities in Mazar-i-Sharif,
based commerce areas and implementing comprise inland cargo terminals from Jalalabad, and Kabul as well as an air cargo
inland cargo storage / distribution hubs which railway and truck operators can take hub at Kabul International Airport. These
pivotal to export-led growth. SEZs are located care of their transport needs in a process efforts have expanded to the airfields of
within a country’s national borders, and their similar to that of a traditional waterside port. Balkh, Kandahar, Helmand, Herat, Kabul and
aims include: increased trade, increased These so-called “dry ports” offer a range Nangarhar , which are being targeted by the
investment, job creation, and effective of logistical services, including: (i) cargo AAEDC. The Bastion-Helmand (Shorabak
administration. To encourage businesses to consolidation and distribution; (ii) temporary Camp) and Shindand-Herat airfields have
set up in the zone, specialized policies and storage of containers/cold storage facilities; been fully transferred to the Government,
rules/laws are introduced. These typically (iii) customs clearance; (iv) connectivity and the Commission is working to transform
involve investing, taxation, trading, quotas, between formal transportation nodes; (v) these unused pieces of land into usable
customs, and labor regulations. Through issuance of bill of lading in advance of facilities. This multi-pronged project forms
SEZs, Afghanistan can aim to develop clearance; (vi) inventory management; and a central part of the Afghan Government’s
and diversify exports while maintaining (vii) pre-customs clearance. Beyond spurring Private Sector Development and National
protective barriers, to create jobs, and to pilot direct investment in key border regions Infrastructure Plan.
new policies and approaches (for example, around Afghanistan, this proposed initiative
in customs, legal, labor, and public-private will help to reduce the average transit costs
partnership aspects). between countries in the region, lowering Recommended Actions by
import costs and making exports more price RECCA-VII and Beyond:
Therefore, the Afghanistan Airfield Economic competitive.
Development Commission (AAEDC) was • Undertake an omnibus feasibility study
established in mid-2015 to responsibly CURRENT STATUS required to build the business case for
transfer strategic airfields status and convert The Afghan Government is developing a combination of public and private
them to SEZs/dry ports in terms of providing Special Economic Zones / Multimodal investment in Multi-Modal Transport and
a proper business environment, attractive Transports and Logistics Facilities in Logistics Facilities across Afghanistan.
incentives regime, sufficient infrastructure, Balkh, Kabul, Kandahar, Helmand, Herat,
skilled labor, and security. A comprehensive Jalalabad, Mazar-i-sharif, Nangarhar, Aqina, • Complete the feasibility studies for
feasibility study is still needed; however, Toraghundi, and Zaranj, for which the building Special Economic Zones / Multi
based on an initial AAEDC-focused study it is Government is in the process of obtaining Modal Transport and Logistics Facilities
in Zaranj and Aqina.
Budget & Funding Feasibility study first required
Status • Complete feasibility studies at several
other key SEZ/MMTLFs that are being
Institutional Afghanistan (MCI, MPW, and the AAEDC), Pakistan, and the Strauss examined from a PPP perspective and
Partners Company targeted by the AAEDC, namely the
airfields in Kabul, Kandahar, Herat,
Jalalabad, and Mazar-i-Sharif.

Regional Cooperation & Investment Projects


The Regional Trade, Customs, and Border CURRENT STATUS trade and simplify Customs procedures.
Management Cooperation project aims Border management innovation efforts and These include new procedures for the
to improve revenue collection and harmonization of customs procedures are import and export of goods that reduces
govern the trade of imports/exports beginning to pay dividends in terms of raising the number of steps and requirements
by streamlining customs practices and the value of goods traded on one hand, and for traders. In addition, progress has been
updating border management procedures decreasing the customs clearance of goods made in terms of risk management and
between Afghanistan and neighboring in Afghanistan and neighboring countries analysis that will reduce the number of
countries. Making progress on customs on the other. While measurable progress goods subject to “red lane” examination.
harmonization, border processing reform, has been achieved, there is ample room The TIR procedure has been finalized and
and information sharing among cross for improving a efficiency. In the context implemented; the guide on Transfer of the
border customs agencies is targeted to of efforts to negotiate new transit-trade Released Consignments was finalized; and
meet the following requisites: reducing agreements with neighboring countries, the Mutual Assistance Agreement with
revenue leakage, achieving comprehensive the Government of Afghanistan remains Tajik Customs was signed, which covers
efficiency gains, reducing transaction costs, committed to reducing tariffs, standardizing the introduction of the TIR Green Corridors
accurately valuating goods, and decreasing customs procedures, and increasing border (when implemented fully it will reduce the
the waiting time at major border crossings. management cooperation. In 2016 and clearance time for the goods exported from
In addition to primary border crossing 2017 alone Afghanistan has signed or is in and transiting trough Afghanistan). Finally,
points and border management operations the process of signing the following trade Trade Agreements have become available
in Afghanistan, the Kabul Customs Yards and cooperation agreements: Customs for inspection; amendments to the Customs
and the Afghan Customs and Tax Academy Co-operation with Iran and Chinese Law have been promulgated and published
in Kabul constitute major focal points of Customs; electronic information exchange in the Government Gazette; and revised
the policy reform agenda for customs with the Tajikistan Customs Authority; procedures have been approved and are
harmonization and border management. and significant progress made toward available for inspection.
Afghanistan joined the WTO on 29 July the signing of agreements with India,
2016 and is currently negotiating new Kazakhstan, Pakistan, Russia, Turkmenistan, One other tangible example of recent
trade-transit agreements with countries in and Uzbekistan. progress includes the automation of
the wider region. customs processes in the form of the
Also in 2016 the Customs Law has been new “Automated System for Customs
amended and thirteen new procedures Data” system. This project alone has had a
implemented to improve facilitation of measurable impact at the Afghan Customs

Regional Cooperation & Investment Projects



Department by markedly reducing revenue reforms including the strengthening of legal

leakage from custom duties. In 2015, the frameworks, thus ensuring a more suitable • Strengthen the Customs Department
total revenue collected by the Customs environment for business and investment through Human Resource reforms and
Department (customs duties, BRT levied in Afghanistan. investment in facilities and equipment,
at point of import, fixed taxes, and other and in other tangible ways: Developing
levies) increased by Afs 10.1 billion from As part of the business climate reforms, the Gap report on the infrastructure
2014, of which Afs 3.3 billion is attributable the Goverment of Afghanistan has recently and facilities at the Customs Points
to the nominal growth of import value, amended the Travel and Residence Law should be completed, followed by the
Afs 4.0 billion to new tax measures, and for Foreign Nationals in Afghanistan, 4 years Modernization Plan slated for
the remaining Afs 2.8 billion to stronger which now allows visas for businesses and presentation to donors; and international
revenue mobilization efforts. Hence, efforts investors upon arrival. financial assistance for securing funds for
to augment Regional Trade Customs and the modernization should be secured.
Border Management Cooperation serves
directly to reinforce the activities and Recommended Actions by • Work in the short term toward achieving
objectives contained in Private Sector RECCA-VII and Beyond: prevention of smuggling (including
Development and Infrastructure and illegitimate re-exporting), an exchange
Connectivity Development National Priority • In light of Afghanistan becoming of risk intelligence between Customs and
Programs. the 164th member of the World other Law Enforcement Agencies, and
Trade Organization, work toward a reduction of clearance times, costs,
Furthermore, Afghanistan has ratified the implementation of the post-accession and red tape for traders. In the Medium
Trade Facilitation Agreement (TFA) of the strategy, aimed at maximum utilization term achieve joint investigations between
WTO on July 29, 2016 becoming the 90th of WTO membership for realization of partner countries, the establishment
WTO member and the 9th LDC member Afghanistan’s economic and trading of one-stop-shop in order to facilitate
of the WTO in doing so. The TFA contains positions at the regional and global trade at all international airports and key
provisions for expediting the movement, levels, implementation of reforms and border-crossings, and the accession to
release, and clearance of goods including modernization of Afghanistan’s business the Revised Kyoto Convention to ensure
goods in transit. It also sets out measures environment, through implementation standardization and modernization of
for effective cooperation between customs of WTO agreements and Afghanistan’s customs procedures. And in the long
and other appropriate authorities on trade commitment under WTO. Maintaining term establish an international single
facilitation and customs compliance issues. policy approaches and technical capacity- window for regional partners.
It further contains provisions for technical building to achieve WTO standards within
assistance and capacity building in this Afghanistan (such as standardization
area. The agreement entered into force and alignment of laws, procedures, and
on February 22, 2017 after two-thirds of requirements for imports/exports as
WTO members completed their domestic per WTO agreements), and continue
ratification process. As part of its efforts to support neighboring countries in
under WTO membership, Afghanistan has their efforts to achieve WTO standards
amended a significant number of laws and in support of a more liberal and fairly
regulations in order to be in line with WTO managed trading system within Central,
agreements and international standards. South, and Southwest Asia.
This represents major progress on domestic

Budget & Funding Support projects including ASYCUDA, BOMNAF, and ATAR inter alia

Institutional Iran, Kazakhstan, Kyrgyz Republic, Pakistan, Tajikistan,

Partners Turkmenistan, Uzbekistan and ADB, UNDP, USAID, World Bank,

Regional Cooperation & Investment Projects

sharing or coordination policy. With the

financial capital and technical know-
how of the private sector, in particular,
DIGITAL SILK ROAD enhancing and sustaining Afghanistan’s
contribution to the Digital Silk Road will
Afghanistan is fast developing into a CURRENT STATUS require: i) increased network capacity, ii)
major trade and transit hub for subsea An MOU will be signed on the sidelines of improved service, iii) improved reliability,
and transcontinental communication. RECCA-VII in Ashgabat by Ministers from and iv) lower broadband costs. Furthermore,
Once completed, the 4,600 Afghan Fiber Turkmenistan, Afghanistan, and Pakistan efforts have been underway recently to
Optic Ring (also known as the Afghan in support of an important new “Digital further accelerate the work on Digital CASA
National Civil Optical Fiber Cable-OFC TAP” component of the Digital Silk Road. including the financing of regional and
ring network) within the broader regional In addition, during the past twelve months, domestic connectivity fiber optic network
“Digital Silk Road” aims to improve regional two Memorandums of Understanding infrastructure as well as the purchase and
connectivity and expand the regional have been signed by the Government of pre-purchase of international bandwidth
knowledge economy in Central, South, Afghanistan in support of the Digital Silk from CASA project partner countries. In
and Southwest Asia. A short-term goal Road and expansion of the Afghan Fiber addition, in implementing the Open Access
(toward further extending the Digital Silk Optic Ring. The first, known as the Silk Road Policy, the licenses for nationwide Fiber
Road) of the Government of Afghanistan Optical Fiber Cable System, was entered Optic Transmission Networks (FOTNs)
is to connect Badakhshan and Bamyan into between China, the Kyrgyz Republic, will be awarded by Afghanistan Telecom
Provinces with the national backbone / Tajikistan, and Afghanistan. The second, an Regulatory Authority (ATRA) soon. And
OFC ring network. A medium-Term goal MOU for Strategic Cooperation between finally, a new MOU is also expected to be
is to connect another two provinces to China Telecom and Afghan Telecom, lends signed at RECCA-VII by Turkmenistan,
the OFC ring network (Kapisa, and Kunar support to the realization of the 480km and Afghanistan, and Pakistan. The Digital Silk
with onward connections to Pakistan). At (est.) USD $50 million Optical Fiber Cable Road is an integral part of the Government
present, Information and Communication connecting Afghanistan to China. Though of Afghanistan’s National Infrastructure Plan.
Technologies-ICT generate USD $167 these recent initiatives receive the political
million per annum in public revenue support of the Afghan Government’s High
in Afghanistan. The continued inter- Economic Council, a major obstacle facing Recommended Actions by
continental demand from commercial the expansion of the Afghan Fiber Optic RECCA-VII and Beyond:
bandwidth providers is driving interest in Ring is the lack of a clear Afghanistan
new and diverse routes that will generate: i) Ministry of Public Works-led road alignment • Complete the Afghan Fiber Optic Ring
lower-cost access; ii) increase revenue; and and construction plan for the next decade and its 480km connection with China.
iii) expand domestic penetration. that is sensitive to current security problems
and within the framework of a broader, • Accelerate the work on Digital CASA
Afghan Government-wide infrastructure and Digital TAP.

Budget & Funding USD $50 million (over five years) to support new 480km OFC • Ensure that the duct requirements are
Status connecting Afghanistan to China met when laying optical fiber cables
in all new roads through sharing the
Institutional Afghanistan, Central Asian Republics, Pakistan, Iran, China, the ten-year strategic plan for roads, as
Partners United States, the World Bank (Digital CASA project) well as the establishment of an Optical
Fiber Department within Da Afghanistan
Breshna Shirkat.

Regional Cooperation & Investment Projects


New RECCA-VII Proposal for Deliberation Afghanistan Energy Business Opportunities Conference, 18-19 September 2016, Dubai, UAE — CREDIT: MoEW

INITIATING THE RECCA CHAMBER OF COMMERCE & discuss, update, and endorse an annual plan
Since its inception RECCA has sought to INDUSTRIES AT RECCA-VII IN ASHGABAT of activities in support of RECCA’s regional
improve regional economic cooperation by To further RECCA’s commitment cooperation and investment projects. To
focusing on connecting businesses across to enhancing business-to-business further discuss and possibly endorse a Terms
the region. It has encouraged a range partnerships across Central, South, and of Reference for the RECCA Chamber of
of business support, regional trade, and Southwest Asia, a RECCA Chamber of Commerce and Industries, the First Meeting
investment promotion activities to improve Commerce & Industries is proposed as a of the Heads of Chambers of Commerce
collaboration, lay the foundation for joint regional network to facilitate dialogue and and Industries from the Region will be
ventures and other kinds of business-to- mutually beneficial cooperation among convened on the sidelines of the RECCA VII
business (B2B) partnerships, foster foreign Chambers of Commerce & Industries across Ministerial Meeting, on 14 November 2017,
direct investment in Afghanistan and the region. With at least one focal point from in Ashgabat, Turkmenistan. This initiative,
its wider region, and engender regional each national Chamber of Commerce & once agreed upon by regional partners, will
technological transfer and information Industry from across the region, the RECCA be supported, in part, by the Government of
exchange. Building on the current twelve Chamber of Commerce & Industries will Afghanistan’s Private Sector Development
Memorandums of Understanding signed offer regular business sector advice and Program.
between the Afghanistan Chamber of engagement on advancing the RECCA
Commerce & Industries (ACCI) and the regional economic cooperation agenda Recommended Actions by
Chambers of Commerce & Industries determined at biennially. It will be supported RECCA-VII and Beyond:
from neighboring and regional countries, by a small office at the Afghanistan
the RECCA-VI calls for consideration Chamber of Commerce & Industry, which • Enhance Regional Business-to-Business
of establishing a RECCA Chamber of will promote daily coordination and follow- Partnerships, in particular by establishing
Commerce & Industry, as a regional network up with the RECCA Secretariat in Kabul. a RECCA Chamber of Commerce and
represented voluntarily by the heads or The RECCA Chamber of Commerce & Industries as a regional network to
representatives of chambers of commerce Industries will gather the heads of chambers connect businesses across the region
and industries from across the RECCA of commerce and industries in the region and encourage direct foreign investment
region—designed to further enhance and their focal points on an annual basis into the RECCA regional cooperation and
regional business-to-business partnerships, in either Kabul and/or the host country to investment projects, including through
trade, and investment expansion goals. the biennial RECCA ministerial meetings to Investment Road Shows.

• Further strengthen B2B partnerships

Budget & Funding The required budget will be further discussed with all stakeholders
across the region including through
simplifying customs measures, addressing
Institutional Afghanistan and all neighboring countries and their Chambers information on regional markets,
Partners of Commerce & Industries across the region (including the and addressing tariff and non-tariff
Chambers of Commerce and Industries, Ministries of Commerce, barriers, promote business-to-business
Ministries of Finance, and investment and export support agencies cooperation strategies tailored to the
in the participating countries), plus the International Chamber of needs of Small-and-Medium-Sized
Commerce as well as regional organizations and programs such Industries.

Regional Cooperation & Investment Projects

on women’s entrepreneurship at RECCA VII.

The event aims at assisting a select group
WOMEN’S ECONOMIC of women-owned small and medium-
sized enterprises (SMEs) in Afghanistan and
EMPOWERMENT THROUGH the wider RECCA region with value chain
REGIONAL ECONOMIC This new initiative is underpinned by the development and access to regional and
recognition that women are poised to global markets by connecting them with
COOPERATION become even more influential economic each other and international enterprises
drivers across the region by tackling the further afield. It represents the first in a series
New RECCA-VII Proposal for Deliberation barriers to their participation, including of activities under RECCA aimed at the
through better connections between the inclusion of local women-owned SMEs from
women of Central, South, and Southwest Afghanistan and the region in the supply
Asia and other innovative empowerment chains of multinational enterprises and seeks
tools that enable them to realize their full to raise their international competitiveness.
potential. A two-day exhibition of women’s products
from Afghanistan and the region will also
In addition to introducing a new criteria Building on these elements aimed at be convened as part of the broader RECCA
to foster more “bankable projects” women’s empowerment as an integral VII exhibition. To further progress on
that are attractive to both private and part of national economic progress, the this Women’s Economic Empowerment
public investors, the Regional Economic Afghan Ministry of Women’s Affairs calls component of RECCA, a policy paper will
Cooperation Conference on Afghanistan’s for a regional cooperation strategy that be produced that highlights obstacles
new approach has sought to bring greater engages women in all RECCA regional to progress for women entrepreneurs
complementarity between the priority cooperation and investment projects, given across the region and a set of operational
projects under RECCA and the National that women have much to contribute to recommendations for improving their
Priority Programs (NPPs) in areas such as their implementation and stand to benefit prospects. This proposed initiative, once
infrastructure development, agriculture from their success. agreed upon by regional partners, will be
development, and private sector supported, in part, by the Government
development. These efforts have also of Afghanistan’s Women’s Economic
sought to integrate a women’s economic INITIATING THE WOMEN’S ECONOMIC Empowerment Program.
agenda, which will contribute, among COOPERATION COMPONENT OF RECCA AT RECCA-
other objectives, to the implementation of VII IN ASHGABAT Recommended Actions by
the Government of Afghanistan’s Women’s The RECCA Secretariat is partnering with the RECCA-VII and Beyond:
Economic Empowerment Program. Major Office of the First Lady of Afghanistan, H.E.
aspects of this program include a focus on Rula Ghani, the Afghan Women Chamber of • Establish a new Women’s Economic
promoting access to economic markets, Commerce and Industries, the United States Empowerment through Regional
targeted training in literacy and business Agency for International Development, and Economic Cooperation component of
management skills, and removing legal the Chamber of Commerce and Industry of RECCA as an integral part of all activities
barriers to women’s economic participation. Turkmenistan to convene a special event to engage governments, businesses,
scholars, and youth in the RECCA
Budget & Funding USD $200 million (for the Government of Afghanistan’s Women’s
Status Economic Empowerment Program)
• RECCA countries and organizations
Institutional Afghanistan and all neighboring countries and their Women should undertake a joint work plan to
Partners Chambers of Commerce & Industries across the region (including ensure that gender diversity serves as a
the Ministries of Women’s Affairs, Ministries of Commerce, “plus point” for economic development
Ministries of Finance, and investment and export support agencies in the full implementation of all RECCA
in the participating countries), as well as regional organizations regional cooperation and investment
and programs such as SAARC, ECO, SCO, CAREC, UNDP, projects.
UNSPECA, and the ITC

Regional Cooperation & Investment Projects


New RECCA-VII Proposal for Deliberation

Recent studies have shown that creating Agricultural Development Priority Program, Regional Agro Food Industry Development,
regional agricultural value chains that are presented to the October 2016 Brussels could serve to reinforce the Afghan
inclusive, productive, and sustainable can Conference on Afghanistan, support for Government’s National Comprehensive
contribute to the design of a scalable and Regional Agro Food Industry Development Agricultural Development Priority Program.
replicable private sector-led development will support specific components of Together, they also have the potential to
model across borders within a regional this National Priority Program, including serve as a bulwark in providing Alternative
context. Such a model would help countries components dealing with wheat and other Development (AD) opportunities to farmers
at the intersection of Central, South, and cereals, horticulture, food and nutrition in Afghanistan and across the region. AD and
Southwest Asia: i) improve national trade security, credit, private sector support and its close connection to regional economic
balances and complementarities between PPPs. cooperation will be explored further by the
Afghanistan and its neighbors; ii) create UNODC and regional countries and partners,
sustainable jobs; iii) ensure food security; CURRENT STATUS on 16 and 17 November 2017 immediately
and iv) increase regional economic Following the signing of a Memorandum following RECCA-VII in Ashgabat.
integration, productivity and connectivity. of Understanding by Afghanistan, the
Within Greater Central Asia, for instance, Kyrgyz Republic, and Tajikistan (AKT), in
researchers identified the three agro food October 2015, in Dushanbe in support of Recommended Actions by
products of fruits, nuts, and vegetables the development of an Afghanistan-Kyrgyz RECCA-VII and Beyond:
for value chain development, increasing Republic-Tajikistan Agro Food Industry
profitability, and expanding market access. Development project, a comprehensive • Explore new avenues of regional
Specifically, the countries of Afghanistan, the feasibility study, financed by UNDP and the cooperation on agro food industry
Kyrgyz Republic, and Tajikistan, for example, Government of Turkey, was subsequently development including in connection
present the features of respective value initiated and its findings were endorsed with alternative development
chains from primary agricultural production during a meeting of the Consortium, in
to the final consumer, and their features February 2016, in Bishkek. This analytical and • Reconvene the tri-partite consortium
ensure that the development of value chains diagnostic work provides the most detailed for reviewing the Afghanistan-Kyrgyz
is feasible in terms of realities, opportunities, assessment of the agro-food industry in Republic-Tajikistan Agro Food Industry
and dynamics of each individual market the three AKT countries to date, and it Development project based on the
compared to that of international markets identifies a set of concrete investment areas findings of the feasibility study and
beyond the three countries. In connection at the micro, meso, and macro levels. This undertake the next phase value-chain
with Afghanistan’s National Comprehensive project, along with other efforts to promote development, allowing for a more
coordinated approach to regional
Budget & Funding n/a agricultural product development in
Status Central Asia.
Institutional Afghanistan and its neighbors (Ministries of Agriculture, other
Partners Ministries/Agencies dealing with alternative development and
Chambers of Commerce and Industries), UNDP, UNODC

Regional Cooperation & Investment Projects


and technical capacities to increase the have been established in major Afghan
number of qualified Afghan workers who cities, and the new “Asan Khedmat” project
are also certified to work in destination is expected to bring more transparency to
countries under decent work conditions. A foreign and local work permit processes.
transparent and widely accepted regional This project also aims to establish a Labor
With over 40,000 new labor market entrants strategy or coordination platform would Market Information System (LMIS) to
every year in an Afghan market already also enable more clear and concrete facilitate access to the updated labor market
characterized by high unemployment and cooperation on cross-border labor support information and data. In 2018, along with
high underemployment (22.4% and 16.4%, at the regional level. the ILO, UNDP, and UNHCR, the Afghan
respectively), the inclusion of skills and job Government will undertake an integrated,
promotion targets in all National Priority CURRENT STATUS comprehensive national labor market
Programs is needed urgently, with a special In support of regional labor exchange and assessment to identify the country’s skills
focus on addressing widespread job losses increased remittances to Afghanistan, the needs within its regional economic context.
in rural areas. Through the National Labor Ministry of Labor, Social Affairs, Martyrs, These efforts will serve to reinforce—in
Migration Strategy (2015-2018) and National and the Disabled, along with World Bank addition to the National Labor Migration
Labor Policy (2016-2020), the Government and European Union financial and technical Strategy and National Labor Policy—the
of Afghanistan works to gain legal and cooperation, is currently planning for the Afghan Government’s National Priority
regular access to foreign labor markets, skills enhancement and employability Programs on Human Capital Development—
including several that remain unexplored of Afghan workers through Technical including national skills development—and
for Afghan workers. In particular, the Afghan Education and Vocational Training (TEVT) Women’s Economic Empowerment.
Government seeks to place around 250,000 programs and “Labor Dispatch” to near-
new recruits into short term itinerant by countries in the region. Under the
employment in the Gulf States, Central, project, the World Bank aims to facilitate Recommended Actions by
and South Asia to boost the economy, employment opportunities for some 2000 RECCA-VII and Beyond:
bolster livelihoods, shore up the macro Afghan workers in the Kingdom of Saudi
economy, and foster skills development. To Arabia and other Gulf Cooperation Council • Finalize a model bilateral agreement on
achieve progress on labor migration will, countries. The Ministry is also organizing a labor support.
at a minimum, require: i) ensuring legal National Labor Conference, in December
access through bilateral labor agreements; 2017, to advance Afghanistan’s labor policy. • Within the regional platform of
and ii) strengthening Afghan institutional Moreover, employment services centers RECCA yet drawing on other regional
consultations, develop a regional
Budget & Funding Regular budget support to the Afghan Ministry of Labor, Social labor exchange and support strategy
Status Affairs, Martyrs, and Disabled to incentivize greater cross-border
labor market cooperation, including in
Institutional Afghanistan (Ministry of Labor, Social Affairs, Martyrs, and the areas of skills development, labor
Partners Disabled; Ministry of Education; and the Ministry of Public Works), dispatch, protection, and return, and
Gulf States, Central Asian Republics, Pakistan, Iran, India, and the common employment standards and
Afghanistan Chamber of Commerce and Industries conditions.

Regional Cooperation & Investment Projects

RECCA-VII Academic Forum, 13 October 2017, Ashgabat, Turkmenistan

favor of greater integration and stability is energy initiatives e.g. TAPI and CASA-
New RECCA-VII Proposal for Deliberation
again increasing—and with a backdrop of 1000? What would the multi-level impact
predictions by some analysts and experts be of integrating regional transportation
that Central South Asia will become the networks e.g. road and rail? For example,
epicenter of global economic dynamism its analytical team could help regional
in the next 20 years—this joint research foreign and finance ministries to prepare
center could be launched with a focus for traveling on investment road shows at
on spearheading specific research and sovereign wealth funds and governments
analytical projects designed to deliver outside the region.
outcomes that spur further regional trade/
investment progress in support of greater The CRE could initially be launched in the
Since its inception RECCA has sought to integration in the wider RECCA region. form of a modest office within the RECCA
improve regional economic cooperation by Secretariat, in collaboration with the
focusing on connecting economic activity TOWARDS THE RECCA CENTER FOR RESEARCH & Center for Strategic Studies of the Ministry
across Central Asia, South Asia, and the EVALUATION AT RECCA-VII IN ASHGABAT: of Foreign Affairs in Kabul, with regular
wider region. A new Center for Research To further RECCA’s commitment to interactions with sister research centers
and Evaluation under RECCA would focus enhancing research collaboration across throughout the region.
actively on providing scholarly reviews and Central, South, and Southwest Asia, a
analysis on regional economic cooperation RECCA CRE is proposed as a regional
in the RECCA region, in order to help initiative to facilitate dialogue and mutually Recommended Actions by
promote cooperation in the form of a beneficial cooperation in the critical area of RECCA-VII and Beyond:
state-of-the-art information exchange and research and analysis across the region. Key
shared analysis by regional partners. The analysis of the following types of crucial • Discuss and endorse the creation of
Center would plan to host, on a rotational queries could be regularly produced by the the RECCA Center for Research and
basis, at least 2-4 scholars, focusing on experts assembled at an innovative center Evaluation at the RECCA-VII ministerial
potential research topics being identified of this caliber, such as: how many jobs meeting, on 15 November 2017, in
by the RECCA academic forum in areas would be created by a regional trade and Ashgabat, Turkmenistan.
of regional economic cooperation and transit agreement? how much would the
integration. Presented for consideration by average family’s standard of living improve • Develop the ToR and structure of the
partners at a juncture when momentum in by the combined impact of regional CRE for the discussion at the Post-
RECCA VII Ambassadorial Meeting
Budget & Funding The required budget will be further discussed with the as well as its adoption by the RECCA
Status stakeholders National Focal Points.
Institutional Afghanistan and all neighboring countries and their academic
Partners research centers, as well as the research divisions of regional
organizations and programs such as SAARC, ECO, SCO, CAREC,



As detailed further in the next section under
the heading of “RECCA 2.0”, much work
ORGANIZATIONS & INITIATIVES remains to deepen and expand the RECCA
platform’s relations with similar regional
organizations and initiatives across Eurasia.
Through recommended instruments known
as Memorandums for Strategic Partnership,
new kinds of synergies have the potential
Since 2010, the Regional Economic Cooperation to take hold. A good starting point may be
Conference on Afghanistan has sought the sharing of each platform’s respective
to actively engage, coordinate, and Regional Cooperation & Investment Projects
encourage a convergence in approaches priority list, to begin to identify areas of
on shared priorities with other regional possible overlap that may be suitable for
organizations and initiatives, such as, for practical kinds of collaboration in terms
example, the South Asian Association for of, for example, pooling technical and
Regional Cooperation (SAARC), the Asian financial resources, as well as mobilizing
Development Bank-facilitated Central Asia joint political support. At a more ambitious
Regional Economic Cooperation (CAREC) stage, as elaborated further in the Overview
program, the Economic Cooperation section of this Review, cooperation could be
Organization (ECO), the UN Economic channels of communication to facilitate explored in the identification and possible
and Social Commission for the Asia and enhanced cooperation between the RECCA shared cooperation on developing together
the Pacific (UNESCAP), the Belt-and Road platform and other regional organizations common transport corridors and even
Initiative, and the Middle Corridor project, and initiatives to which Afghanistan is more robust economic corridors. Since the
as well as the OSCE and SCO. Following a member; and 2) embarking on joint 2010 Kabul Conference on Afghanistan and
an initial meeting of the heads of the research related to the themes of, for the 2012 RECCA-V meeting in Dushanbe,
secretariats of regional organizations to instance, regional trade and transit. Under Afghanistan has sought to prioritize at least
which Afghanistan is a member (for a more the leadership of H.E. Engineer Ali Ahmad two economic corridors under the banner
complete list, see Annex III in this RECCA Osmani, the Afghan Minister of Energy and of “Regional Economic Growth & Resource
Annual Review 2017) in 2010 in Kabul, a Water, a separate regional coordination Corridors”. In reaching markets further
second such meeting was convened on the meeting focused specifically on energy afield, including in East Asia, Europe, and the
sidelines of RECCA-VI in September 2015 issues was also convened on the sidelines Greater Middle East, these robust economic
in Kabul. Presided over by H.E. Abdul Sattar of RECCA-VI. corridors have the potential to benefit
Murad, the Afghan Ministry of Economy, greatly Afghanistan’s neighbors in Central
key topics discussed included: 1) expanding Asia, South Asia, and Southwest Asia too.


cutting edge research and analysis projects


as well as the development of model
bankable projects, in close partnership with
relevant partners in regional Finance and
The Regional Economic Cooperation sector-specific Ministries, as well as the
Conference on Afghanistan, extending With a central consensus-building and International Financial Institutions through,
its arc of achievement at the outset of a facilitating support role, the RECCA for example, the Private Infrastructure
second decade of progress, has succeeded National Focal Points appointed by all Development Group, the Public-Private
in both persistently making the case RECCA participating countries are chiefly Infrastructure Advisory Facility, and the
for the mutual benefits from regional responsible for ensuring that the main actors World Bank Global Infrastructure Facility.
economic cooperation and the pivotal role in their respective government and business
of Afghanistan as a geographic lynchpin community are properly informed and
connecting the nations and peoples of
Central, South, and Southwest Asia, with
onward linkages to the massive markets of
equipped with the tools to contribute to the
RECCA vision and practical action agenda.
Through regular communication with the
East Asia, Europe, and the Greater Middle East. RECCA support team in Kabul, the National CHAMBERS OF COMMERCE IN SUPPORT OF
At the same time, for this unique platform to Focal Points contribute to the programming INVESTMENT ROAD SHOWS, BUSINESS FORUMS,
thrive and grow in impact, RECCA’s future and planning of RECCA annual activities, AND WIDER B2B COOPERATION
success will be judged increasingly by how work to ensure that their countries' equities
its commitments are implemented and are represented, and encourage national A Regional Chamber of Commerce and
translated into tangible forms of economic, capabilities to be tapped in support of the Industries, in the form of a regional network
social, and political progress for the region’s following seven elements that together of leaders from Chambers of Commerce and
peoples and governments—rather than comprise the new “RECCA 2.0” approach. Industries in Central, South, and Southwest
the quality of its strategic plans or forums Asia with a light secretariat based in Kabul,
engaging government, academic, youth, has the potential to significantly further
and business leaders. Equally important will
be the degree to which RECCA is embraced
by leaders and the general population as a
regional business-to-business partnerships,
trade, and investment expansion goals.
Representing RECCA’s growing shift toward
fully regionally-led platform, underpinned In fulfilling its proposed mandate of implementation and the central role of
by a regionally-developed and owned promoting information exchange and the private sector in fulfilling its regional
economic cooperation strategy. shared analysis by regional partners, the economic cooperation agenda, this idea
RECCA Center for Research & Evaluation was previously received with great interest
To inform discussions at RECCA-VII in —recommended and elaborated earlier— by private sector and government partners
Ashgabat, the following eight ideas and is well-situated to lead on the preparation throughout the region. Specifically, a
recommendations are offered toward of state-of-the-art Bankable Projects Briefs Regional Chamber of Commerce and
transforming RECCA into a truly regionally- for the Investment Road Shows (see next Industries is well-poised to initiate a series
led and owned economic platform and point), as well as other activities like state- of Investment Road Shows to showcase
strategy for Central, South, and Southwest of-the-art research and analysis on regional lucrative investment opportunities across the
Asia. They seek to mobilize action toward matters, designed to leverage private and broader region, based on bankable projects
effective implementation of the regional public capital investments and technical that have been developed, in part, by the
cooperation and investment projects, related ingenuity. Given the timely need to promote RECCA Center for Research & Evaluation.
regional policy and regulatory reforms, and the private sector, model bankable projects The road shows would be attended by
the wider agenda presented in this RECCA must be developed for replication across key private sector interests and sovereign wealth
Annual Review 2017. Together representing economic sectors highlighted in this Review, funds, providing an opportunity to diversify
the advent of “RECCA 2.0”, they additionally including for example multi-modal inland investment interests, and to overcome the
signal the platform’s purposeful extension ports, information and communication deficit in infrastructure financing for critical
beyond mainly Afghan-centric priorities to technologies, and power generation. With anchor, ancillary, and spinoff projects. They
fill significant gaps and connect regional inputs and oversight provided by the RECCA would complement broader and more
bodies and initiatives around Central, South, National Focal Points, the RECCA Center policy-oriented Business Forums and other
and Southwest Asia. for Research & Evaluation could support forms of B2B cooperation.


and connectivity between Central Asia,


South Asia, Southwest Asia, and even the Far
East. In addition, meetings of the two Heart
of Asia-Istanbul Process Regional Technical
Groups on Trade, Commerce & Investment
In seeking to further integrate women’s and Regional Infrastructure could double Among the six high-level councils
economic empowerment into the RECCA as preparatory meetings for the biennial established by the Afghan Government in
agenda, discussions will take place at RECCA- RECCA Ministerial Meetings in regional advance of the 2016 Brussels Conference
VII in Ashgabat on such practical issues as capitals and actively engage the RECCA on Afghanistan is a new Infrastructure
promoting access for female entrepreneurs National Focal Points and periodic RECCA Development Council. In support of the
to economic markets across the region, progress updates and Annual Reviews, to National Infrastructure Plan of the Islamic
targeted training in business management ensure effective coordination, monitoring, Republic of Afghanistan, this new Council
skills for women, and removing legal and the sharing of human, technical, and (comprised of high-level representation
barriers to women’s economic participation. financial resources between RECCA and the from major Afghan Ministries and Agencies)
RECCA recognizes that women across Heart of Asia-Istanbul Process. will prove critical to advancing the RECCA
Central, Southwest, and South Asia have agenda by acting as a focal point for
much to contribute to the implementation regional cooperation in Kabul—both
of the platform’s regional cooperation and
investment projects, and they also stand to
benefit from their success. It is, therefore,
generating and coordinating developmental
projects that are regional in nature—while
fostering a conducive climate to improve
imperative that women across the entire PROMOTION & KNOWLEDGE SHARING implementation.
region be engaged in the activities of the
new RECCA Chamber of Commerce & A transformed RECCA website could
Industries (including Investment Road
Shows and Business Forums), the biennial
Ministerial and Academic Forum meetings
provide up-to-date details on regional
cooperation projects, including status,
performance, feasibility studies, economic
of the platform, and other more targeted impact assessments (for example, as
support activities to improve economic produced by the new RECCA Center for By transforming the decade-old RECCA
and political conditions for women to Research & Evaluation), and contract platform into “RECCA 2.0” through the
both benefit from and actively contribute details for both public and private sector development of the first truly regional
to regional economic cooperation. In its investment partners. This upgraded RECCA economic cooperation strategy for Central,
initial phase, this new component of the portal will interact closely and build upon South, and Southwest Asia in the long-
RECCA platform will build upon the regional the new online business investment in term, regional government, civil society,
outreach efforts of the Government of Afghanistan web-portal under development and the business leaders will grow RECCA
Afghanistan’s new Women’s Economic through the Heart of Asia-Istanbul Process in new directions to achieve a maximum
Empowerment Program. Trade, Commerce, and Investment Regional and unique regional socio-economic
Technical Group. In addition, it would impact. Some suggested elements of this
facilitate knowledge sharing on regional new instrument for encouraging greater


economic cooperation topics by establishing
an online “community of practice”, anchored
by the RECCA National Focal Points and
regional coordination, complementarity,
and monitoring are:

the representatives of Regional Chambers • Vision and Goals: The overarching

Establishing new Memorandums of of Commerce and Industries and featuring principles and strategic commitment of
Strategic Partnership (MSP) with, for periodic thematic dialogues and a monthly Central, South, and Southwest Asia to
example, CAREC, SAARC, and other regional e-newsletter. This interactive web-portal regional economic cooperation, possibly
platforms could help to ensure mutually could also host online consultations and anchored around a select number of
reinforcing synergies with RECCA platform an annual student essay contest with youth priority Regional Economic Growth &
and help to minimize duplication of effort. from across Central, South, and Southwest Resource Corridors.
In undertaking similar arrangements with Asia.
regional bodies and initiatives across Eurasia, • Challenges, Emerging Risks, and
such as the Belt-and-Road Initiative, Middle Opportunities: A detailed quantitative
Corridor project, ECO, Silk Wind, UNSPECA, and qualitative analysis of regional
OSCE, and SCO, RECCA can facilitate trade and other cross-border economic
strategic coordination, knowledge-sharing, cooperation trends, including identified


new opportunities and emerging obstacles

and risks.

• Priority Regional Economic Growth & CONCLUSION

Resource Corridors: Building consensus
around a select number of combined
priority transport, trade, energy, and
current—CAREC and BRI corridors, from
which major cities, multi-modal land
ports, and secondary corridors will benefit
from new and deeper interconnections.

• Regional Economic Cooperation and

Investment Project Priorities: Between Regional economic cooperation Analysts have predicted that Central,
20 and 25 major regional economic is beginning to take root and bear South, and Southwest Asia will become
cooperation and investment project significant fruit at the Heart of Asia, in a leading epicenter of global economic
priorities, with prospects for innovative many ways restoring the ancient Silk dynamism by 2030. As demonstrated in
private and public investment partnerships, Roads to their former glory. Through the RECCA Annual Review 2017, much
in the areas of energy, transport networks, its new “RECCA 2.0 Approach”, this discernible progress provides a solid
trade & transit facilitation, communications, unique regional platform is steadily foundation for overcoming current
and business-to-business and labor demonstrating how deepened challenges and intensifying efforts to
cooperation. forms of connectivity—through a deepen infrastructure connectivity and
combination of hardware (physical expand trade for the direct benefit of
• A Comprehensive Monitoring and infrastructure) and software (policy, the countries across the region. There
Evaluation Mechanism: The RECCA Center legal, and regulatory reforms)—and is newfound momentum building
for Research and Evaluation (presented expanded trade between Afghanistan in and around the wider region, as
earlier on page 35) will monitor and and its neighbors is benefiting the visions become less clouded and the
evaluate progress on the RECCA regional people, business, and countries of realization of joint interests rise to
economic cooperation agenda between Central, South, and Southwest Asia and the fore. However, to reach this fully
the biennial (every two years) high-level, beyond, economically, socially, and developed destination, the countries
ministerial RECCA meetings. politically. In doing so, it is promoting of this emerging region will need to
the trade complementarities of its work closely together to forge lasting
These ideas are intended to spur and diverse members, as well as new consensus on the series of intermediary
inform discussion at the RECCA-VII forum kinds of synergies with other regional steps that are required to reach
in Ashgabat and contribute to a long-term organizations and initiatives, thereby this shared and mutually beneficial
program of dialogue and action across demonstrating that the sum can truly economic destination. Building modern
the region. Their consideration, adoption be greater than its individual parts. As day trade and transit thoroughfares
and effective implementation will require Afghanistan continues to overcome across this diverse region and lifting
regional vision and leadership, combined obstacles to progress and grows in the economic fortunes of its people
with sustained capacity-building, network- stability and prosperity, the wider region contain the capacity to transform
building, and direct technical and financial benefits equally from this critical process, modern day pan Asia in manifestly
support from the region’s international particularly in light of Afghanistan’s profound and permanent ways. Much
development partners. Towards the central location and historical role as a is at stake: no less than peace, nor more
hopeful enrichment and realization of this land-bridge in Eurasia. than prosperity.
forward-looking vision and roadmap for
practical action, the organizers of RECCA-
VII welcome feedback and additional
ideas from policy-makers, business
leaders, civil society representatives, and
scholars to further accelerate mutually
beneficial economic cooperation between
the countries, businesses, and peoples of
Central, South, and Southwest Asia.
Country names in alphabetical order


Acting Director General for Economic Cooperation,
1 AFGHANISTAN Mr. Hassan Soroosh
Ministry of Foreign Affairs

2 AZERBAIJAN Mr. Ashraf Shikhaliyev Director of the Azerbaijan International Development Agency (AIDA)

3 CHINA Mr. Song Pengzhou Chief of Political Section, Embassy of the Republic of China, Kabul

4 EGYPT Mr. Sami Saad Murad Deputy Minister for Western and Central Asia Affairs

Deputy Director of the Transport Policy Department

5 GEORGIA Mr. Gogita Gvenetadze
Ministry of the Economy and Sustainable Development of Georgia

6 INDIA Mr. Vishwesh Negi Director (PAI), Ministry of External Affairs

7 IRAN Mr. Rasool Islami General Manager for West Asian Countries, Ministry of Foreign Affairs

8 IRAQ Mr. Basher Salih Ibrahim First Secretary and Head of West and Central Asia

9 KAZAKHSTAN Mr. Arman Yessentayev First Secretary, Kazakhstan Embassy in Kabul

10 KUWAIT Mr. Waleed Al-Bahar Regional Manager for East, South Asia and Pacific of Kuwait Fund


12 PAKISTAN Mr. Mansoor Ahmad Khan Director General (Afghanistan & ATDC)

13 QATAR Embassy of Qatar Embassy of Qatar in Brussels

14 RUSSIA Andrey Blinnikov Advisor for Economic Affairs, Embassy of the Russian Federation, Kabul

15 SAUDI ARABIA Mohammad Bin Suleiman Aldalilan Member to the Saudi Development Fund

16 TAJIKISTAN Mr. Mirzoev Khusrav Second Secretary of External Economic Cooperation MFA, Tajikistan

17 TURKEY Mr. Murat Yavuz Ateş Ambassador, Deputy Undersecretary, Ministry of Foreign Affairs

18 TURKMENISTAN Mr. Shalar Geldinazarov Director of Middle East, West Asia and Afghanistan, MFA, Turkmenistan

19 UAE

20 UZBEKISTAN H.E . Akmal Jan, Quchqarove Republic of Uzbekistan’s Ambassador to Turkmenistan

Countries yet to introduce their national focal points: KYRGYZ REPUBLIC, and UNITED ARAB EMIRATES



OFFICE OF THE CHIEF ADVISOR TO THE Chief Adviser to the President on

1 Dr. Mohammad Humayon Qayoumi


2 Ajmal Ahmady Senior Advisor to the President

MINISTRY OF ECONOMY 3 Mohammad Ismail Rahimi Deputy Minister

4 Najibullah Wardak DM for Customs & Revenue

5 Ahmad Reshad Popal Director General of Customs

6 Nematullah Haidari Deputy Minister, Ministry of Public Works

AFGHANISTAN RAILWAY AUTHORITY Director General, Afghanistan Railway
7 Mohammad Yamma Shams

MINISTRY OF ENERGY & WATER 8 Mohammad Gul Khulmi Acting Deputy Minister for Energy



10 Abdul Hameed Akbar Director General for Planning & Policy

11 Sayed Wali Sultan Deputy Minister, Transport

12 Ahmad Yama Aimaq Head of External Relations

13 Kamela Sidiqi Deputy Minister for Commerce

14 Mohammad Yahya Akhlaqi Director, Trade & Transit Facilitation

MINISTRY OF MINES & PETROLEUM 15 Mir Ahmad Jawid Sadat Deputy Minister for Plan & Policy

MINISTRY OF COMMUNICATIONS & Deputy Minister for Communication & IT

16 Mohammad Hadi Hedayati


17 Mohammad Najib Azizi Board Chairman


18 Atiqullah Nusrat CEO

19 Spozhmai Wardak Deputy Minister for Admin & Finance

20 Nafisa Kohistani Head of External Relations Unit


21 Nasrullah Hassani Sahibazada Executive Director


CAREC Central Asia Regional Economic Cooperation program (CAREC): Established by the
ADB in 2001. CAREC is a multi-country (including the Central Asian States, Pakistan,
Afghanistan, China, Mongolia, and Azerbaijan), multi-institutional alliance that seeks to
promote increased coordination in customs, energy, transport, trade facilitation, and trade
policy. Afghanistan joined CAREC in 2005.

SAARC South Asia Association for Regional Cooperation (SAARC): Founded in 1985, SAARC
seeks to promote peace, social justice, and economic prosperity through sixteen “areas of
cooperation” among its eight member states (Afghanistan, Bangladesh, Bhutan, India, the
Maldives, Nepal, Pakistan, and Sri Lanka). Afghanistan became a full member of SAARC in
April 2007, and it joined the South Asia Free Trade Agreement in February 2008.

Economic Cooperation Organization (ECO): ECO is a regional intergovernmental

ECO organization established in 1985 by Iran, Pakistan, and Turkey for the promotion of
economic, technical, and cultural cooperation. In 1992, ECO was expanded to include:
Afghanistan, Azerbaijan, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and
Uzbekistan. In early 2005, the ECO Trade Agreement (a preferential trade agreement) was
signed with the aim of reducing intra-
ECO tariffs, non-tariff barriers, and other trade-related charges.

Shanghai Cooperation Organization (SCO): Afghanistan is an observer for this regional

“intergovernmental mutual security organization” which was founded in 2001 in Shanghai
by the leads of China, Kazakhstan, Kyrgyz Republic, Russia, Tajikistan, and Uzbekistan. Other
observers include Belarus, Iran, and Mongolia. Dialogue partners now includes Armenia,
Azerbaijan, Cambodia, Nepal, Sri Lanka and Turkey.

Special Session of the Regional Advisory Committee of the United Nations Program
UNSPECA for the Economies of Central Asia (UNSPECA): The United Nations Special Program
for the Economies of Central Asia was launched in 1998 to strengthen sub-regional
cooperation in Central Asia and its integration into the world economy. The member
countries of UNSPECA are Afghanistan, Azerbaijan, Kazakhstan, Kyrgyz Republic, Tajikistan,
Turkmenistan and Uzbekistan. Afghanistan joined UNSPECA in May 2005.

UN Economic and Social Commission for Asia and the Pacific (UNESCAP): As a UN
UNESCAP Member State, Afghanistan also participates in activities of UNESCAP.

Organization for Security and Cooperation in Europe (OSCE): In April 2003, Afghanistan
OSCE became a Partner of the OSCE.

MAJOR RECOMMENDATIONS FROM a regional trade and transit hub for the benefit
of both Afghanistan and its neighbors.

THE RECCA-VII ACADEMIC FORUM Afghanistan aspires to compliment, rather

than overlap with, existing transport-related
infrastructure investments in the region.

• For Afghanistan to fully develop its rich • One of the biggest challenges Afghanistan
minerals sector, it will rely increasingly on and its neighbors face is unemployment,
a steady supply of reliable and relatively and enhancing both regional connectivity
inexpensive sources of power. and trade can contribute immensely to
increasing new job opportunities in both
• The CASA-1000 power transmission urban and rural communities across the
project is also demonstrating that high-levels region.
of cooperation between the countries of
Central and South Asia is possible, even on a • Participants acknowledged that national
geographically and technically complicated economic development and infrastructure
project. projects stand to benefit immensely by
SESSION #1: ENHANCING REGIONAL being part of a larger regional project or
COOPERATION IN THE FIELD OF ENERGY • Together, TAPI, CASA-1000, and more network, in terms of attracting public and
recently TAP-500 can serve as the basis for a private capital and technical knowhow from
• Building on the TAPI natural gas pipeline’s new, integrated regional energy market and countries and businesses both within and
progress, including the recent completion electrical grid for the benefit of the countries beyond the region.
of the third stage of the Galkynysh Gas Field of Central and South Asia.
and expected completion, in 2018, of the • Another scholar stressed the importance
Turkmenistan section of the pipeline, efforts of developing further the theoretical
should be redoubled to complete major SESSION #2: ASSESSMENT OF REGIONAL foundations of regional economic
regional economic cooperation project in AND INTER-REGIONAL CONNECTIVITY integration, so that theory can catch up
the coming few years, especially as it has with the practical strategies and progress
the potential to serve as a “game change” • One expert recommended that there be associated with new initiatives, such as
for economic development and cooperation less of a focus among political leaders in the CAREC and the Belt-and-Road Initiative.
between the countries of Central and South region on hard security issues and more on
Asia. tangible forms of economic cooperation in • The “empty train problem” for the new
the areas of, for example, transport, trade, connection between Afghanistan and China
• Despite the global drop in the price of the and energy, where the countries of Central, merits high attention from political and
sale of natural gas—due to the discovery of South, and Southwest Asia stand to benefit business leaders, as this new example of
new gas deposits in the U.S. and elsewhere through their close interactions. Afghanistan participation in the Belt-and-
utilizing new technologies—natural gas Road Initiative has considerable potential in
exploitation has the potential to significantly • Six economic corridors are now being terms of generating economic benefits for
reduce poverty and to benefit economically planned by China in connection with its the wider region.
the countries of Central, South, and massive Belt-and-Road Initiative, and it
Southwest Asia, representing the beginning is important that Afghanistan and other
of a “New Energy Era”. Natural gas is also far countries in Central, South, and Southwest SESSION #3: PROSPECTIVE AND
cleaner than coal and oil production and use, Asia position themselves to participate in POTENTIAL FOR REGIONAL TRADE &
thereby helping to reduce carbon emissions and benefit from these expected areas of TRANSIT FACILITATION, B2B, P2P,
and the negative effects associated with major economic dynamism and growth. COMMUNICATIONS, AND LABOR SUPPORT
dramatic climate change.
• The countries of the region are hopefully • Maximize potential of business to business
• Three important issues that must be beginning to take notice of Afghanistan’s opportunities by highlighting business
addressed in connection with its participation marked progress in building new roads, road shows, reaching out to international
in the TAPI project are: i) producer country rail lines, and dry ports, which (along with Chambers of Commerce, and soliciting
pricing; ii) natural gas anchors in consumer better trade facilitation, customs, and border support from extensive Afghan Diaspora
countries; and iii) managing tight margins. management policies) will allow it to become to find companies willing to partner with


Afghanistan on specific bankable pilot • The need for model bankable projects
programs that can help to prove Afghanistan for their replication across a number of
is open for business while highlighting key economic sectors was also stressed,
specific laws, rules and regulations that including, for example, in the areas of power
must be fixed. SESSION #4: EXPLORING NEW AVENUES generation and multi-modal inland ports.
• Improve Afghanistan’s brand by getting INTEGRATION IN THE REGION WITH A • Simplification of the procedures for grants
out the message that Afghanistan is open FOCUS ON THE ROLE OF AFGHANISTAN. and loans was also emphasized during the
for business. Counter arguments regarding concluding session.
financial and physical security concerns. • RECCA should continue contribute to five
main economic cooperation clusters in • A lack of coordination and synergy at
• Structure regional agreements as cost Central, South, and Southwest Asia, namely: different levels was also mentioned as a
sharing enterprises to reduce risk to individual i) energy; ii) transport networks; iii) trade and major challenge, including among major
signatories and entice international funding transit facilitation; iv) communications; and regional economic cooperation platforms,
from World Bank, Asian Development Bank, v) B2B partnership and labor support, and between transport and transit corridors,
and others. Use Public-Private Partnerships it should focus on both the challenges and and between a growing number of robust
whenever possible. impediments to project implementation, economic corridors.
as well as the prospects for cooperation
• Continue to attack corruption vigorously and opportunities in each major economic • Some speakers were of the view that,
to build the confidence of the people. Make sector. along with hard infrastructure and physical
sure that governments and businesses connectivity which have witnessed
understand the efforts. • Participants in this concluding session also considerable progress over the past few
highlighted the strong correlation between years, there is the need for intensified
• Continue to reform the customs, visa and infrastructure development, in areas such efforts with respect to the soft infrastructure
cross border procedures. as transport, energy and Information and required for trade expansion and investment
Communications Technologies, and the promotion in our region. Customs
• Continue to eliminate obstacles to regional overall economic growth and development harmonization, policy coordination,
energy, trade, and rail agreements. Many in the wider region. improved investment environment, greater
have been signed but not executed. B2B partnership, air connectivity and visa
• The expert panelists further recommended facilitation were highlighted in this context.
• When talking about security to businesses, the need for more integrated efforts across In addition, concerns were raised about
focus on security from a district and village the region to improve the level and pace of trade and transit-related barriers, especially
level. It is unfortunate when an entire implementation for the commitments made a worrying number of non-tariff barriers in
country is viewed as insecure when, in fact, (and overcoming associated bottlenecks) or the region.
many places are either perfectly secure the actions and activities recommended at
today or at least secure enough to take a risk the RECCA meetings. • Finally, the scholars assembled in
with possibility of higher economic reward. Ashgabat on 13 October 2017 for the RECCA
• Investment deficit need to be overcome Academic Forum recommended improving
• Streamline national drivers licensing laws with respect to infrastructure development, research capacity and convening more
so the all provinces respect drivers’ licenses and the development of investment criteria capacity building programs for the priority
from other provinces. This seemingly for “bankable” regional cooperation and economic sectors identified through
small step could dramatically improve the investment projects under RECCA would be the Ministerial Meetings of the Regional
efficiency of transporting goods across helpful in this regard. Economic Cooperation Conference on
Afghanistan. Afghanistan.
• Diversification of fund mobilization was also
emphasized, highlighting the importance
of attracting capital and investment from
diverse private sector and public sources
including the Sovereign Wealth Funds, new
regional funds and investment banks, as
well as innovative financing modalities such
as PPP and power purchase agreements.

With the launch of Lapis Lazuli Route,
we will begin to establish a new
trans-Eurasian railway and road
corridor. This new agreement will
enable people and goods to reach
Europe in five days. ... The TAPI gas
pipeline was recently viewed as a
pipe-dream but will soon reach
Afghanistan, then Pakistan and India.

H.E. Dr. Ashraf Ghani

President of the Islamic Republic of Afghanistan
Speaking at the Vivekananda International Foundation
in New Delhi (25 October 2017)

2017 © Directorate-General for Economic Cooperation,

Ministry of Foreign Affairs, Islamic Republic of Afghanistan