Cross-Border Production and Trade and the Shaping of the Political Economy of Nangarhar
There are economic and political actors in the eastern province of Nangarhar, including those in the government and the Taliban, who generate significant rent on the production, movement and sale of a range of commodities as a consequence of their control of key locations - or chokepoints - along supply chains. Often these actors are not directly involved in the production and trade of commodities themselves - they neither own or work the talc mines nor opium fields - and do necessarily own the commodities that are being transported and traded. Neither, are the chokepoints from which they derive their income necessarily at the point of production - for example a quarry, or heroin lab - or the point of exit - the border crossing through which they are transported.
Many chokepoints are found along the route, perhaps at the entry to a mountain pass where pack animals have to be used, or the point where a metalled road stops and where commodities have to be cross decked from large container vehicles to smaller trucks to be able to continue the journey. Some of these chokepoints may contain soldiers or police, and consist of a facility where the failure to stop could result in fines, imprisonment or violence. It might be complete with a barrier, a weigh station and government official, but in many parts of southern Nangarhar it is just as likely to consists of a band of armed men by the roadside charged with extracting a payment from those that wish to pass.
In a province like Nangarhar, known for its production of illicit drugs, rich in mineral deposits, in particular vast amounts of talc, and located in such close proximity to the Pakistan border, rendering it a key gateway for the dramatic expansion in the “transit trade” - goods transited free of duty through Afghanistan’s neighbours - the opportunities for rent extraction are huge. For example, at the peak of the surge in NATO troop numbers in Afghanistan in 2010 there was as many as 800 container trucks crossing the border at Torkham each day, while a large number of people, pack animals, and an assortment of different types of vehicles crossed the numerous unofficial border crossings between Pakistan and Afghanistan.
Even in 2019 there were up to sixty container trucks of talc passing through Torkham each day, a total of 2,400 metric tonnes. With commodities moving through the province in such large volumes, the capability to direct and channel trade through preferred chokepoints brings significant rent and favour to political and economic actors in the province and their allies elsewhere.
It is the contention of the AREU commissioned report that knowledge of where these chokepoints are, who they are controlled by, what commodities are transported through them, and the rules that govern the amount of rent paid, is critical to understanding the interests that underpin the political-economy of the province, particularly as the country tries to move towards peace.
The report charts the factors that determine where these different chokepoints are located along the supply chains for some of the most valuable commodities in Nangarhar, primarily, drugs, minerals, and the transit trade. It documents why the importance of particular routes and chokepoints have changed over time, and details the means by which the amount and type of rents extracted are determined. Over 300 in depth interviews were conducted in the autumn of 2019 with those directly involved in the transportation and trade of a number of key commodities, and who reside in strategic locations along supply chains in Nangarhar and on its borders.
These interviews were combined with with high-resolution imagery and geospatial analysis, by Alcis that covers some of the more remote and inaccessible parts of the province to identify and verify historical changes, as well as examine issues of interest.
We argue that the provinces mountainous border with Pakistan not only acts as a natural barrier to the movement of goods, directing traffic through particular passes or river valleys, but also determines the chokepoints where these goods can be stored and cross decked, and thereby where economic advantage can be gained, and to whom, in the form of employment, income and rents. Often these chokepoints are located some distance away from the point of production or cross border movement and are favoured not only by terrain but by infrastructural investments that encourage the routing of goods, as well as formal or informal rules that determine where goods can be loaded and unloaded, and under what arrangements. The report reveals just how investments in physical infrastructure have transformed the political economy of Nangarhar, especially since the collapse of the Taliban regime in 2001. In some cases physical infrastructure has facilitated the production and trade along particular routes. The main Highway from Jalalabad to Torkham is an obvious example of physical infrastructure that has encouraged the movement of significant volumes of goods - minerals, fuel, and agricultural products - between Pakistan and Afghanistan, creating an important tax base for the Afghan government at its customs stations at Seracha and Torkham. While at the same time other infrastructure such as southern ring road have encouraged trade, in particular, in transit goods, to be rerouted through the mountains, provided rents to tribal groups closely aligned with local state actors, and bypassed formal regulatory system entirely.
In other cases physical infrastructure, most notably the fence built by the government of Pakistan along the Afghan border from 2007 and 2019, has closed a number of unofficial trading routes through the Mohmand tribal areas, concentrating the smuggling of goods - in the form of over 2,500 heavily laden mules per day - through the routes it favours and increased the rents that can be extracted by its allies. It is also important to note that in many parts of Nangarhar investments in physical infratructure have been made deep into territory where the government has historically had little control, such as in the southern districts of Nangarhar in the Spinghar piedmont, no doubt under the assumption that “wherever the roads ends, that’s where the Taliban starts”. This infrastructure has facilitated the production and trade in commodities, such as minerals and drugs, that the insurgency has been able to tax, and established both an income for those in violent conflict with the state and a network of common interests amongst the Taliban and private state actors, which includes resistance to central state control of these areas and the resources they hold.
1Mules, Pick-ups and Container Traffic: Cross-Border Production and Trade and the Shaping of the Political Economy of Nangarhar.
This paper also points to the role of violence and conflict in shaping patterns of trade and rent extraction in Nangarhar. In this regard, the trade in illicit drugs appears to be no more problematic than for any other commodity. The only exception is during periods where the national and provincial authorities sought to impose a protracted ban on opium cultivation in areas where the population had no viable economic opportunities. Under these conditions, violence has been deployed both by rural communities and by insurgent groups who looked to gain local support to prevent prohibition and allow production and trade to continue. Rather, this research suggests that violence is deployed more strategically in Nangharhar, used by powerbrokers and groups to disrupt trade, extort and gain leverage for renegotiating rents.
There are several examples on both sides of the border where the state and local groups have cooperated, using violence to expel these disruptive forces from an area, thereby allowing production and trade to resume. The most obvious example being the expulsion of Mangal Bagh from Tirah in Pakistan, for fear that his presence threatened the lucrative transit trade. Finally, this paper highlights just how redistributive illicit economies are. Consisting of multiple segmented journeys, where different local actors are responsible for the trade and transportation of commodities across specific areas, the cross border trade in drugs and transit goods provide significant income, employment and rent to multiple groups across the province of Nangarhar.
Cooperation and collusion between state actors and those in the insurgency - including with regard to formal and informal regulatory systems - also highlights the economic and political interests that underpin existing patterns of trade and rent extraction.
The report concludes that there is a strong constituency for the continuation of these economies and the potential for protest, negotiation and even violent resistance if the state – or other actors - make efforts to restrict production and trade along particular routes or at specific locations. In fact, continued government tolerance of the smuggling of large amounts of drugs and transit goods across the Afghan and Pakistani border highlight the importance of these illicit economies and their role in subsidizing these borderland communities. Moreover, the agency of those involved, their links to provincial and national powerbrokers further constrain the capacity of the formal authorities and the insurgency to act were a peace to be brokered.
The report is part of a series for Drugs & (dis)order.
Drugs & (dis)order is a four year Global Challenges Research Fund project generating new evidence on how to transform illicit drug economies into peace economies in Afghanistan, Colombia and Myanmar. It is an international consortium of internationally recognised organisations with unrivalled expertise in drugs, conflict, health and development.
The full report, can be found here