Russia Looks To Cash In On Afghanistan Opportunities
Afghanistan is a US$1 trillion commodities and transit bank for Russian and Chinese supply chain needs
Eight months after US troops finally exited Afghanistan, and 20 years after a US invasion in which Washington spent US$2.3 trillion on being there, Russia’s Foreign Minister Sergey Lavrov has stated that Russia wants to work directly with Kabul in the areas of agriculture, transit and energy.
“We see promising areas for developing cooperation and direct contacts between business circles. Firstly, this is agriculture and energy, as well as transport, taking into account Afghanistan’s high transit potential. In general, the more than 140 enterprises built by the Soviet Union in Afghanistan remain the backbone of the Afghan economy, and this creates additional opportunities for increasing our cooperation in the trade and economic sphere,” Lavrov said.
Officials in the Afghanistan Chamber of Commerce and Investment (ACCI) said they consider this step to be beneficial for the country in the current situation.
“By doing so, our agriculture grows and our agriculture progresses. In addition, our domestic production includes non-alcoholic beverages, water, soft drinks, which have a very high capacity and will grow,” said Khan Jan Alokozai, head of the ACCI.
Russian trade with Afghanistan has shot up since the ignominious US exit last August, with Russian exports now reaching US$10.3 million a month and imports worth US$584,000 from Afghanistan, increases of about 500% and 120% respectively since the end of the US occupation. Afghanistan exports to Russia are mainly fruits such as grapes, while Russia’s exports to the country are seed oils.
Russia has been Afghanistan’s trading partner for the past 20 years, exporting oil and iron to Afghanistan. The US era has resulted in a destroyed Afghani economy with very little energy, connectivity, or industrial infrastructure to show for the experience. Both Russia, and China have vested interests in assisting with the re-construction of the country, which is wealthy in terms of nonfuel minerals whose value has been estimated at more than US$1 trillion. The country also has the potential to become a Central Asian trading hub as it shares borders with Pakistan to the east and south, Iran to the west, Turkmenistan to the northwest, Uzbekistan to the north, Tajikistan to the northeast, and China to the northeast and east.
As supply chains are shifting east as a result of the EU embargo on Russia interfering with Asia’s own supply chains, getting Afghanistan functional in Asia as part of a commodities and transit bank for both Russia and China has taken on new significance for Moscow and Beijing.
During these uncertain times, we must stress that our firm does not approve of the Ukraine conflict. We do not entertain business with sanctioned Russian companies or individuals. However, we are well aware of the new emerging supply chains, can advise on strategic analysis and new logistics corridors, and may assist in non-sanctioned areas. We can help, for example, Russian companies develop operations throughout Asia, including banking advisory services, and trade compliance issues, and have done since 1992.
We also provide financial and sanctions compliance services to foreign companies wishing to access Russia. Additionally, we offer market research and advisory services to foreign exporters interested in accessing Russia as the economy looks to replace Western-sourced products. For assistance, please email firstname.lastname@example.org or visit www.dezshira.com