Why Afghanistan is a Big Winner in the U.S.–Iran Deal


In the days since the United States and Iran concluded their landmark nuclear accord, much has been said about the deal’s geopolitical implications.

Most U.S. media coverage has focused on ramifications for the Middle East: How will Iran’s nemeses Israel and Saudi Arabia respond? Will Mideast sectarian tensions increase? Will the accord embolden Iran and cause it to intensify its dealings with the likes of Hezbollah, or will it lead Iran to moderate its destabilizing activities in the Middle East? Will the deal serve as a springboard for greater U.S.–Iran cooperation in combating the Islamic State terror group? And, above all, will the accord actually halt Iran’s march toward becoming a nuclear power?

Far less attention has been paid to South Asia — a neighboring region where the deal’s implications are similarly complex, albeit with stakes that are not as high. Energy-starved Pakistan will have a golden opportunity to conclude a long-discussed natural gas pipeline deal with Iran. Islamabad will need to weigh the energy security benefits of a gas accord with the geopolitical risks of angering Saudi Arabia — a key Pakistani ally and staunch opponent of the deal. Earlier this year, Pakistan’s parliament boldly rejected Riyadh’s request for the Pakistani military to help the Saudis fight the Houthi rebels in Yemen, whom the Saudis believe to be supported by Iran. This was a rare case of Pakistan snubbing its Saudi ally, and such refusals are not a new precedent that Islamabad wishes to set. At any rate, given that the nuclear deal may sharpen tensions between Tehran and Riyadh, Pakistan may find it increasingly difficult to resist getting dragged into a widening Saudi-Iranian proxy war.

India, meanwhile, will be in a position to increase its oil imports from Iran. Iran was a top oil supplier for New Delhi before the Indians scaled back in deference to the U.S. sanctions regime. Also in the cards is an undersea gas pipeline that could deliver more than 30 million cubic meters of gas per day — an achievement that would bring energy but also some environmental relief, given India’s heavy reliance on dirty coal. At the same time, however, as the Brookings Institution’s Tanvi Madan recently noted, India could suffer if the deal destabilizes the Middle East: More than 7 million Indian nationals are based in the Middle East (mainly in the Arab Gulf), sending back billions of dollars in remittances. Pakistanis also have a sizable presence there, with nearly three quarters of their remittances coming from the region.

And then there is Afghanistan. Here, the U.S.–Iran deal’s implications are less complicated and largely positive. Afghanistan could be one of the deal’s biggest beneficiaries, and for two major reasons.

First and foremost, Afghanistan’s economy stands to benefit in a big way.

In the coming months, New Delhi will likely begin developing the Iranian port in Chabahar, located on Iran’s southern coast. India wants to develop this strategic warm-water port to establish access to markets in Afghanistan and Central Asia — access that it does not have via Pakistan, which refuses to grant transit rights to India. More broadly, Chabahar would provide an important trade link for products from the Middle East and Europe destined for Afghanistan and Central Asia. And it would serve as a gateway to the Middle East and Europe for exports coming from Afghanistan and Central Asia.

New Delhi has envisioned this project for years, but sanctions on Iran had put plans on hold. After Washington and Tehran signed a provisional nuclear accord in April, New Delhi and Tehran concluded an MOU laying out preliminary steps for the port — including an Indian pledge to commit about $85 million to construct container and multi-purpose terminals. Now that a formal U.S.–Iran deal is in place and the relevant sanctions will presumably be removed, India is poised to initiate Chabahar’s full-fledged development.

The benefits for Kabul are clear. The port — in addition to facilitating more commerce with key trade partner India — will help open up new markets for Afghanistan in the Middle East and Europe, and present opportunities to diversify its list of trade partners. Presently, Kabul’s import and export partners are largely restricted to countries in South and Central Asia. In effect, the Chabahar project represents a potential economic bonanza for an economically troubled nation. According to Afghan officials, a fully operational port could generate trade volumes for Afghanistan totaling billions of dollars. That is no small sum, given that Afghanistan’s total trade volume has been barely $9 billion annually in recent years.

The timing could not be better. According to the World Bank, economic growth in Afghanistan was just 2 percent in 2014 — down from an average of 9 percent between 2003 and 2012. This is no surprise. The withdrawal of international combat forces has led to a contraction of the war economy in Afghanistan. Additionally, donor fatigue — fueled by Afghanistan’s deep corruption and troubled aid delivery systems, among other things — portends cuts in foreign aid. As of several weeks ago, the UN had received less than a third of the $405 million it requested from the international community to address humanitarian challenges in Afghanistan. Making matters even worse is that Afghanistan has recently suffered a significant decline in the value of its currency.

The second reason why the nuclear deal could be a boon for Kabul is the possibility of stepped-up U.S.–Iran cooperation in Afghanistan.

Such an outcome is far from assured, given the poisoned relations between the two nations over the last few decades, and caution is certainly in order. And yet the potential rewards are high. Better bilateral relations overall could significantly reduce the likelihood that Tehran will once again try to undercut the United States in Afghanistan, as it has done in the past by providing arms to the Taliban on several occasions. Already, with the nuclear accord now in place, Iran has less reason to fear that the United States may one day use Afghanistan as a staging ground for attacks on Iranian nuclear facilities, and therefore less reason to provide tactical support to the Taliban. This all bodes well for Afghanistan’s stability.

U.S. and Iranian interests in Afghanistan, which include combating the Taliban and promoting greater stability, are largely convergent. And it’s easy to understand why. Shia Iran has no desire for the Sunni Taliban to return to power — and it won’t soon forget the Taliban’s 1998 attack on Tehran’s consulate in Mazar-e-Sharif, which killed nine Iranian diplomats and prompted Iran to mobilize 200,000 troops on its border with Afghanistan.

Tehran wants a more stable Afghanistan because instability intensifies narcotics production, which fuels Iran’s drug problems. Iran has one of the world’s highest drug use rates and is afflicted by a major heroin epidemic. Additionally, destabilization could increase already-heavy refugee inflows. Only Pakistan hosts more Afghan refugees than Iran. Furthermore, a deteriorating security environment, coupled with an increasingly fractured Afghan Taliban, could increase the influence of the Islamic State in Afghanistan. Even now, pro-Islamic State militants are battling — and defeating — Taliban fighters in Nangarhar province.

It’s important to recall that in the wake of 9/11, Tehran and Washington cooperated closely on Afghanistan. At the Bonn conference in 2001, it was Iran that broke a stalemate over the composition of Afghanistan’s first post-Taliban government. Several years later, according to journalist Barbara Slavin, Iran gave maps to Washington that revealed Taliban positions in Afghanistan and offered to train 20,000 Afghan troops as part of an American project to rebuild Afghanistan’s army. Of course, the two have competed in Afghanistan as well — and this goes beyond Iran’s past efforts to provide arms to the Taliban. In 2010, for example, Tehran reportedly sent bags of cash to President Hamid Karzai’s chief of staff as part of an effort to drive a wedge between Afghans and Americans. This should all be seen in the context of broader U.S.–Iran competition worldwide, which according to the Wall Street Journal has included Iran hiring Afghan Shias to fight in Syria on the side of President Bashar al-Assad.

We should not assume that the U.S.–Iran deal will magically lead to broader reconciliation; the relationship is burdened by too much lingering hostility and mistrust to expect such an outcome anytime soon. Still, it is possible that the two countries will now find ways to cooperate, or at least coordinate, in Afghanistan in areas that are mutually beneficial.

One possible area of cooperation is Afghanistan’s reconciliation process. Iran could join the United States in playing a behind-the-scenes role to encourage a fledgling peace process between the Afghan government and the Taliban. Another is some form of quiet coordination to address the Islamic State’s rising influence in Afghanistan. Two other possibilities, because they would involve working together more overtly, are admittedly less likely. Yet they shouldn’t be ruled out, given how consequential they could be for Afghanistan. One is counter-narcotics. In an era when opium harvests in Afghanistan have reached record-high levels, Iran and the United States could consider a new joint effort to slow down the drug trade. The other is coordinated development assistance projects. While Washington’s great largesse toward Kabul is well known, Tehran has quietly contributed as well — from $540 million pledged at a donor conference in 2002 to more recent funding of schools and media institutions.

Greater U.S.–Iran cooperation in Afghanistan will undoubtedly face obstacles that go beyond the troubled bilateral relationship. Some Afghans resent Iran’s presence in the country, regarding it as excessive meddling. Even some members of the Shia minority are wary of Iran, accusing Tehran of radicalizing their communities. Additionally, it is unclear if Tehran can establish the highly cordial relations with the present government that it enjoyed with the previous Hamid Karzai-led administration. Furthermore, the scaled-down U.S. presence in Afghanistan could constrain coordinated U.S.–Iran efforts in the country. Nonetheless, the U.S.–Iran deal opens up several potential new avenues for cooperation that could work in Afghanistan’s favor.

Even if the United States and Iran do increase their cooperation in Afghanistan, this won’t be a silver bullet for the conflict-ridden country. Many of Afghanistan’s core challenges — from corruption to insurgency — can only be solved with strong leadership and effective policies that must emanate from within. Additionally, some of the U.S.–Iran accord’s potentially deleterious consequences — particularly intensified Sunni–Shia tensions — could play out directly in Afghanistan, and to its detriment.

Overall, however, the deal could bring very tangible economic and diplomatic benefits to Afghanistan. This is refreshingly good news for a country going through some particularly difficult times of late.


Michael Kugelman is the senior associate for South Asia at the Woodrow Wilson International Center for Scholars in Washington, DC. He can be reached at michael.kugelman@wilsoncenter.org and on Twitter @michaelkugelman.


Photo credit: Warrior 786