Uzbekistan Sees Opportunities in Afghanistan

Uzbekistan’s business relations with neighboring Afghanistan are booming. In 2024, Uzbek-Afghan trade came to some $1.1 billion, and more than $1 billion of that was Uzbek exports to Afghanistan. It seems after the February 22-23 visit of Taliban acting Deputy Prime Minister for Economic Affairs Abdul Ghani Baradar to Uzbekistan, that figure is likely to continue climbing. Baradar met with Uzbek Prime Minister Abdullo Aripov and Deputy Prime Minister Jamshid Khojayev to discuss trade and investment, which is essentially the basis of Uzbekistan’s relations with Taliban-ruled Afghanistan. The immediate results of these talks were modest, but projects due to start in the near future offer substantial profits for both Uzbekistan and Afghanistan. Uzbekistan agreed to lift restrictions on imports of Afghan agricultural goods, which facilitated another agreement establishing a free economic zone in Uzbekistan’s border area that would have factories for processing pine nuts and cotton from Afghanistan. Agricultural goods are the bulk of Afghanistan’s exports to Uzbekistan, which is not surprising since more than 40 years of war have prevented Afghanistan from building many plants and factories for producing finished goods. A report from November 2024 said in the first ten months of the year, Uzbekistan’s exports to Afghanistan came to some $855.9 million, while Afghan exports to Uzbekistan amounted to only some $28.3 million. Power On Uzbekistan is the leading exporter of electricity to Afghanistan, supplying nearly 60% of Afghanistan’s electricity imports, and that amount could increase soon. Baradar’s delegation discussed progress on the 500 kV transmission line from Uzbekistan’s Surkhan region to Dashti-Alvan, near the Baghlan provincial capital Pul-e-Khumri, which will increase Uzbekistan’s electricity exports to Afghanistan by some 70%. Construction of the 260-kilometer transmission line started in 2018 and has been repeatedly delayed. Baradar said Uzbek officials agreed to cut the cost of building the transmission line from $252 million to $222 million. Turkmenistan is also considering building a 500 kV transmission line to Dashti-Alvan. Uzbek Deputy Prime Minister Khojayev and Baradar reviewed progress at Afghanistan’s Toti-Mardan gas field, just south of the border with Turkmenistan, which is believed to contain vast reserves of natural gas. In November 2024, Uzbekistan signed a ten-year contract to develop the gas field, pledging to invest $100 million in the project each year. According to reports about Baradar’s recent visit, drilling at the site is expected to begin soon. Prime Minister Aripov said Uzbek investors were already preparing to start construction of a cement plant in Afghanistan’s Samangan Province. Taliban officials have been offering Uzbek companies opportunities in Afghanistan’s mining sector for months. The Taliban acting minister of mines and petroleum, Hidayatullah Badri, was part of Baradar’s delegation and he met with Uzbek officials to discuss cooperation in developing Afghanistan’s mineral resources. The Afghan delegation again proposed Uzbek participation in developing mining sites, but there was no word in reports on any agreements. Aripov mentioned Uzbekistan was interested in the exploration and extraction of oil and gas, both of which Uzbekistan needs for domestic consumption, but did not mention mining....

Turkmenistan and Afghanistan Discuss Collaborative Projects

On March 4th, a large Afghan delegation led by Nooruddin Azizi, Minister of Industry and Trade of Afghanistan, participated in a Turkmen-Afghan business forum and exhibition of Afghan goods in Ashgabat. Issues discussed included Turkmen-Afghan partnerships in trade, industry, agriculture, transport, communications, and electricity supply. Also on the agenda were oil and gas which alongside textiles, comprise Turkmenistan’s main exports to Afghanistan. As reported by the Turkmen Foreign Ministry, special attention was paid to the construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline and the Turkmenistan-Afghanistan-Pakistan (TAP) high-voltage power transmission line. The group also focused on the establishment of transport routes and in particular, railways from Turkmenistan to Afghanistan. Azizi emphasized the desire of the Afghan business sector to further increase trade with Turkmenistan, develop Afghanistan’s infrastructure, and exploit the transit potential of both countries. Afghan TOLOnews, quoting Mergen Gurdov, head of the Chamber of Commerce and Industry of Turkmenistan, reported that in 2023, trade between Turkmenistan and Afghanistan generated $457 million and this January alone, $46 million. The agro-industrial sector was cited as a promising field for Turkmen-Afghan cooperation, with the Turkmen Foreign Ministry raising the issue of transboundary water resources. Turkmenistan insists that the use of water involves cooperation with neighboring countries, conducted in accordance with international law, and based on principles of mutual respect and in the spirit of traditional good neighborliness. Afghan Minister Azizi pledged that regarding the use of transboundary water resources and construction of water facilities to further the prosperity of his people, Kabul will honour principles of mutual consent and respect for neighboring countries, especially Turkmenistan, with whom Afghanistan has long maintained an amicable relationship. The issue came to the fore last month following Afghanistan’s announcement that construction has begun on the second phase of the Qosh Tepa Canal; a project prioritized by the Taliban- led government since early 2022. By diverting water from the Amu Darya River, the canal will convert 550,000 hectares of desert into farmland in northern Afghanistan, but could also have an adverse effect on agriculture in downstream Uzbekistan and Turkmenistan.