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Kabul will survive

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It is hard to pin a date on Kabul’s founding. Additionally, Kabul’s area and size have expanded and contracted numerous times. While today, geographically speaking, Kabul is a small province in central-eastern Afghanistan, in the Mughal Emperor Zaheer-ud-Din Babur’s day, Kabul stretched from the Hindukush mountains to the Indus River, and from Kashmir to Khurasan.

South of the Hindukush, for centuries the ancient city of Bagram, built on the banks of the Panjsher River, was the preeminent political, economic, cultural, and military center of the region. The rise to prominence of Kabul, around a millennium ago, was parallel to the decline of Bagram. Built on the banks of the Kabul River, Kabul lay from southwest to northeast, in the direction of the river.

Given Kabul’s location at a crossroads, the city was destined to achieve greatness. The overland commerce, as well as conquest, routes between India and China, and India and Persia ran through Kabul, which quickly became a major commercial center. The first time ever that India and China made contact with each other was through the overland route that ran over the Hindukush, and by extension through Kabul.

Kabul, a diverse commercial hub with pleasant climates

Babur—in his memoir, the Baburnama—says: ‘As the entrepot between Hindustan and Khurasan, this province [Kabul] is an excellent mercantile center. Merchants who go to Cathay and Anatolia do no greater business. Every year seven, eight, or ten thousand horses come to Kabul.

Babur further adds that, ‘From Hindustan, caravans of ten, fifteen, twenty thousand pack animals bring slaves, textiles, rock, sugar, refined sugar, and spices. Many Kabul merchants would not be satisfied with a 300 to 400 percent profit. Goods from Khurasan, Iraq, Anatolia, and China can be found in Kabul, which is the principal depot for Hindustan.

Amongst the different ethnic groups that lived in Kabul, Babur names the following: Turks, Aymaques, Arabs, Pashais, Parachis, Tajiks, Barakis (Burkis), Afghans (also known as Pashtuns, Pakhtuns or Pathans), Hazaras, and Negudaris.

Moreover, on the languages and dialects spoken in Kabul, Babur observes that, ‘Eleven or twelve dialects are spoken in Kabul Province: Arabic, Persian, Turkish, Mongolian, Hindi, Afghani [Pashto or Pakhto], Pashai, Parachi, Gabari, Baraki, and Lamghani [Laghmani]. It is not known if there are so many different peoples and languages in any other province.’

Kabul was home to a thriving Christian Armenian community. The Armenians of Kabul had their own church inside Old Kabul, and their own cemetery. Similarly, the Jews of Kabul had their own quarter and synagogue. Hindus, Sikhs, Armenians, and Jews were involved in commerce between Kabul and the surrounding regions.

Kabul’s magnificent climate also brought ‘so many different peoples’ together. Babur remarks, ‘The climate is excellent. In fact, no place in the world is known to have such a pleasing climate as Kabulnear are regions with both warm and cold climates. Within a day’s ride from Kabul it is possible to reach a place where snow never falls. But within two hours one can go where the snows never melt–except in the rare summer so severe that all snow disappears. Both tropical and cold-weather fruits are abundant in Kabul’s dependencies, and they are nearby.’

Kabul, Afghanistan’s cultural oasis

In the process of bringing so many different peoples together, Kabul has managed to develop its own unique vibrant culture and identity, which, although is different from the rest of Afghanistan at times, has had its influence over other cultures throughout Afghanistan.

Across Afghanistan the amount of love and affection for Kabul is boundless. It is not uncommon to see schools, hotels, restaurants, buses, shops, and other businesses named after Kabul. There is a Pashto saying, ‘Penza rupay por kra, zoy pa Kabul loy kra,’ meaning ‘Borrow five rupees, and raise your son in Kabul,’ in reference to Kabul’s better education, etiquette, and culture.

Kabul was home to Afghanistan’s first modern boys’ school, first modern girls’ school, first teachers’ training college, first university, first radio and television stations, first train, first museum, and first airport, among other things. In the 1940s, for the first time in Afghanistan’s history, Radio Kabul allowed female singers to sing, and broadcast their songs.

Twice over the past century—once in the 1920s and again in the 1950s—Kabul pioneered giving Afghan girls and women the right to education and work, and the right to not cover their faces, if they so wished. Although rural conservatives were uncomfortable with the above reforms, other Afghan cities such as Kandahar and Herat imitated Kabul.

The Afghan Royal Family during the Nadir Shah and Zahir Shah eras did not impose any social reforms from Kabul on the rest of the country. Instead, they allowed people outside Kabul to gradually see, understand, and adopt such reforms as girls’ education and removing of the veil, which Kabul had embraced.

Furthermore, Kabul has produced Afghanistan’s top singers such as Ustad Qasem Afghan and Ustad Fazl Ahmad Nainawaz. Kabul has also given birth to Afghanistan’s best contemporary poets such as the poet laureate Qari Abdullah and Sufi Ghulam Nabi Ashqari. In Kabul’s poetic circles, it is common to gather with one’s friends to recite and interpret poems of poets such as Mirza Abdul Qadir Bedil Dehlavi and Maulana Jalaluddin Rumi/Balkhi.

As such, Kabul for centuries has played a role like that of Iran and India, which, while absorbing outsiders and adopting part of their culture, has given the outsiders an indigenous touch and identity. This was as true of early Muslim conquerors and more recently of the Mujahedin, as it was of settlers and immigrants from across the region.

For instance, within months of Ahmad Shah Durrani’s passing in 1772, his son and successor Timur Shah Durrani moved his Empire’s capital from Kandahar to Kabul. Among other reasons, Kabul’s liberal atmosphere and its moderate climate prompted Timur to relocate his capital.

Like Timur Shah, generation after generation of Afghans have flocked to Kabul. Some of those moving in from small towns and villages at first may not feel at ease in Kabul, which may be too liberal for them. But eventually most accept the change, and Kabul becomes their home.

Kabul’s women against foreign occupation

Kabul has led the way in resisting foreign occupation. During the first British invasion (1838-1841) the Afghan uprising, which led to the killing of the British envoy William H. Macnaghten and withdrawal of the British troops, began in Kabul in November 1841. During the withdrawal, an entire 16,500-man British army, consisting of both soldiers and camp followers, was almost entirely annihilated by Ghilzai tribesmen in the mountains and gorges of eastern Kabul.

Women attend a rally in Kabul in the late 1970s. | Imgur via Pinterest

Nearly four decades later, during the Second British invasion of Afghanistan (1878-1881), the Afghans burned down the British Residency at Kabul’s Bala Hisar and killed the British envoy Pierre L. Cavagnari, a second British envoy to be assassinated in Kabul in 38 years.

During both British invasions, Kabul’s girls and women took an active part in the struggle to evict the British. For instance, from rooftops, the women of Kabul would throw stones at, and pour hot water on, passing British soldiers in Kabul’s alleys and streets. Old Kabul’s homes and streets are filled with the tales of Kabul’s women’s struggle against British invaders.

Likewise, a century later, weeks into the Soviet invasion of Afghanistan, in late February 1980, the residents of Old Kabul, including girls and women, staged a popular uprising against the heavily armed Soviet troops. The uprising started at night with chants of Allah-o-Akbar—in defiance of Soviet-imposed communism—by residents of Kabul from their rooftops.

The next day, clashes between Soviet troops and Kabul residents followed in the streets. The uprising—during which hundreds of Kabul’s residents including teenage schoolgirls like Naheed, Amina, Salma, and Sultana, embraced martyrdom—was brutally suppressed by Soviet troops. While Kabul’s residents made the ultimate sacrifice for Afghanistan’s freedom, the torch of resistance was passed onto other Afghans who would make sure the Soviets left Afghanistan.

Concluding remarks

Even though Kabul and its brave girls and women are going through a dark period right now due to numerous restrictions imposed on them by Taliban fundamentalists, it is my sincere belief that Kabul and its girls and women will once again, sooner rather than later, emerge victorious from these dark and challenging times, and return to living a cheerful life once again.

The Taliban’s categorizing the girls and women of Kabul as impious and imposing restrictions on them is in line with the offensive descriptions of the girls and women of Kabul which former British colonial chroniclers have provided. It is interesting to see that the Taliban have found more common ground with the British than with fellow Afghans.

The Taliban leader Hibatullah Akhundzada’s preferring to stay in Kandahar can be because he fears being “polluted,” absorbed, and made irrelevant by Kabul. That said, if the Taliban survive, Kabul will conquer them—just like it conquered the Mujahedin. In Kabul the Taliban will metamorphose into a more lenient movement, should they survive the test of time and sanity.

The writer is Arwin Rahi, a former adviser to the Parwan governor in Afghanistan. He can be reached at rahiarwin@gmail.com.

 

ASIA

How will Trump’s potential tariffs affect Southeast Asia?

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Southeast Asia is worried about Donald Trump’s threat of universal tariffs and a new trade war with China. Five of the region’s six largest economies run a trade surplus with the United States.

But experts say the situation may not be so bad. The region, which tries to remain geopolitically neutral, saw an increase in gross trade with both China and the U.S. between 2017 and 2020 during Trump’s first presidency. Vietnam, Indonesia, Malaysia, and Thailand have benefited as companies from China, Japan, South Korea, Taiwan, and the U.S. have expanded their production bases in Southeast Asia to avoid U.S. tariffs.

Experts say exports and economic growth will take a hit in the short term, but the region could benefit from trade diversion and substitution.

What is Trump’s tariff threat?

The goal of Trump’s trade policy is to bring manufacturing jobs back to the U.S. and decouple supply chains from China. Trump and his advisers claim that China’s trade advantage is due to “currency manipulation, intellectual property theft and forced technology transfer”.

During his first term, Trump used executive powers to impose tariffs of up to 25% on $250bn of electronics, machinery and consumer goods imported from China. Beijing retaliated with similar measures on U.S. agricultural, automotive and technology exports.

Now Trump has proposed a 60 per cent tariff on all Chinese goods entering the U.S. and tariffs of up to 20 per cent on imports from everywhere else.

How bad could it be for Southeast Asia?

According to Oxford Economics, about 40 per cent of Cambodia’s exports go to the U.S., making it the largest exporter in Asean as a percentage of total exports, followed by Vietnam with 27.4 per cent and Thailand with 17 per cent. Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce, said the Thai economy could take a 160.5 billion baht ($4.6 billion) hit if Trump fulfils his promises.

Vietnam has the world’s fourth-largest trade surplus with the United States. This imbalance has been growing rapidly as Chinese, Taiwanese and South Korean companies have used Vietnam to avoid Trump-era tariffs. Vietnam’s fortunes could change just as quickly, especially if the U.S. continues to classify Vietnam as a ‘non-market economy’, which requires higher tariffs.

Uncertainty over Trump’s tariffs could cause companies to pause or halt investment plans in Southeast Asia. U.S. companies accounted for about half of Singapore’s $9.5 billion in fixed-asset investment last year, according to the city-state’s Economic Development Board. In his congratulatory letter to Trump, Prime Minister Lawrence Wong was quick to remind him that the United States enjoys a “consistent trade surplus” with Singapore.

Any blow to the Chinese economy will have repercussions for Asean countries that depend on Chinese consumption, export demand and tourism. A reduced appetite for Chinese goods will also affect Southeast Asian suppliers of inputs to Chinese producers. Indonesia, Southeast Asia’s largest economy, will suffer the most because it exports 24.2 per cent of its goods to China, mainly commodities.

Unable to send their goods to the U.S., Chinese exporters may turn to Southeast Asia, where governments have faced complaints from local producers hurt by dumping in metals, textiles, and consumer goods.

What is Southeast Asia’s advantage?

Southeast Asia’s current manufacturing boom started because of the trade war. Over time, analysts expect trade substitution and diversion to outweigh the hit to growth.

“We think a stronger crackdown on China could lead to more supply chain diversion as Chinese companies trade and invest more in Asia,” said Jayden Vantarakis, head of ASEAN research at Macquarie Capital.

“Electric vehicle factories, which some Southeast Asian governments are aggressively pursuing, could provide an economic buffer. Demand for EVs is also growing outside the U.S., so I think there could be a net benefit for Indonesia. Smaller countries that are trying to be carbon neutral, especially as petrol prices get more expensive, will try to take over the supply and buy more electric cars,” said Sumit Agarwal, a professor at the National University of Singapore’s School of Business.

Trump’s promised tariffs could embolden Asean governments to impose anti-dumping duties on Chinese goods, as Thailand did on rolled steel this year. Stricter U.S. rules of origin could also give governments an opportunity to ensure that more high-value parts are produced and assembled locally.

How will Southeast Asian currencies and markets be affected?

Trump’s tariffs could reduce pressure on Southeast Asian central banks to ease monetary policy further.

“Essentially, Trump’s victory is inflationary for the world because of his planned tariffs, so the global monetary normalization or easing cycle will probably not be as sharp as previously thought, including in the Philippines,” said Miguel Chanco, chief emerging Asia economist at UK-based Pantheon Macroeconomics.

Speaking to Nikkei Asia, Chanco said Southeast Asian currencies will not strengthen as much as previously expected, partly because markets are re-pricing the pace of easing by the U.S. Federal Reserve and thus the dollar will continue to strengthen.

Among Southeast Asia’s six major economies, the Thai baht and Malaysian ringgit have been the worst-performing currencies since Trump’s victory, losing 3.2 per cent and 2.9 per cent respectively against the U.S. dollar through Wednesday.

Thai brokerage InnovestX recommended stocks that would benefit from a strong dollar and weak baht. These include companies with significant export earnings, such as CP Foods and Delta Electronics, or tourism-related companies such as Airports of Thailand, property developers and hoteliers.

Governments are already taking steps to reduce their over-dependence on the U.S. or China by deepening ties with other countries and regions and emphasizing their neutrality.

Southeast Asian economies in particular are also expected to focus on building resilience by strengthening intra-ASEAN trade.

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ASIA

Japan’s exports rise despite global risks, boosted by China

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Japan’s exports rose more than expected in October, driven by strong demand from China and other parts of Asia, despite growing uncertainties in global markets.

Exports increased by 3.1% year-on-year, led by significant growth in shipments of chip-making equipment, particularly to China, according to the Finance Ministry’s report on Wednesday. This marked a rebound following the first drop in 10 months in September. October’s figures exceeded economists’ forecasts of a 1% rise and were also bolstered by increased shipments of medical products to the United States.

Meanwhile, imports edged up by 0.4%, defying expectations of a 1.9% decline. As a result, the trade deficit widened to 461.2 billion yen ($2.98 billion), compared to 294.1 billion yen in the previous month.

This stronger-than-expected export performance has raised optimism about Japan’s economic recovery. Although the country’s gross domestic product (GDP) expanded for the second consecutive quarter through September, the pace of growth has been tempered by the drag from net exports.

“Today’s data raises hopes that external demand will revive in the October-December quarter,” said Hiroshi Miyazaki, Senior Research Fellow at the Itochu Research Institute. “The Chinese government’s stimulus measures have stabilized its economy and reversed the prior decline.”

Exports to China rose by 1.5% last month, rebounding from a 7.3% drop in September, with semiconductor manufacturing equipment exports surging by nearly a third. These gains align with signs that China’s stimulus policies are beginning to yield results, driving growth in certain sectors and boosting consumer spending.

Notably, Japanese exports grew despite the yen’s strengthening against the dollar, averaging 145.87 yen per dollar in October—2% stronger than the previous year, according to ministry data.

The export rebound occurs against a backdrop of heightened concerns about global trade policies. Business leaders are bracing for the potential return of Donald Trump to the White House, with fears that his proposed tariffs—60% on imports from China and 20% on other nations—could disrupt international commerce.

Some regions are already experiencing a slowdown. Shipments to the United States and Europe declined by 6.2% and 11.3%, respectively, in October.

The Bank of Japan (BoJ) is closely monitoring these developments. BoJ Governor Kazuo Ueda noted on Monday that while the Federal Reserve’s prospects for a soft landing have improved, risks tied to the U.S. economy and their impact on global markets require careful consideration.

The most pressing concern for Japan’s trade outlook is the impact of potential U.S. tariffs. Historical data from the U.S.-China trade war (2018-2019) suggests that a 1% increase in export prices, including tariffs, led to a 0.35 percentage-point reduction in profit margins for Chinese exporters, according to research from Stanford University’s Centre for Chinese Economics and Institutions. A similar scenario could hurt Japanese firms’ profitability, counteracting gains from the yen’s depreciation.

“We are not yet at a stage where Trump’s tariff policy is clearly impacting export volumes or exporters’ behavior,” Miyazaki told The Japan Times. “However, there remains significant uncertainty, and we must continue to monitor the policy stance of the next Trump administration,” he added.

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IMF reviews Pakistan’s $7bn bailout

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An International Monetary Fund (IMF) team conducted an unscheduled visit to Pakistan last week to assess the country’s progress on the terms of its $7 billion bailout package. The surprise visit, coming less than two months after the loan’s approval, has raised questions about the future of the bailout program. IMF staff are expected to present their findings to the Washington-based executive board for review.

What prompted the IMF’s unexpected visit to Pakistan?

Several officials, speaking to Nikkei Asia on condition of anonymity, highlighted key factors prompting the visit. These included a $685 million shortfall in the government’s tax collection target for the first quarter of the current fiscal year and a $2.5 billion deficit in the external financing required under the bailout terms. Compounding these issues was the failed sale of Pakistan International Airlines (PIA), a key component of the IMF-recommended privatisation drive.

While routine IMF program review visits are standard, the timing of this visit—just seven weeks after board approval—has raised concerns. “This suggests significant difficulties in implementing the program,” said Naafey Sardar, an economics professor at St. Olaf College in the United States, speaking to Nikkei Asia.

Ikram ul Haq, a lawyer specializing in economic and tax policy, added, “The reality is that the government’s promises to the IMF have not been fulfilled.”

What were the key issues discussed?

The IMF raised the issue of the tax gap and urged action to ensure that Pakistan meets its annual tax collection target of $46 billion.

Islamabad was also asked to engage with Saudi Arabia and China, the largest investor, to bridge the external financing gap. Promised energy sector reforms and the repayment of billions of dollars of debt owed to mostly Chinese-backed power plants in Pakistan were also discussed.

Another issue was for the IMF to press provincial governments for more funds, such as the Benazir Income Support Programme, which provides a $2.1 billion annual cash transfer for poverty alleviation, currently paid for by the central government.

How does agricultural income tax fit into this picture?

As part of the loan agreement, Pakistan’s provinces missed an end-October deadline to harmonize their agricultural income tax laws with the federal income tax.

The IMF had previously said that Pakistan’s loan agreement would be in jeopardy if agricultural income remained largely untaxed. During the meetings, provincial government officials told the IMF that they would face significant difficulties in implementing a higher tax.

Economist Aqdas Afzal said such a move would face significant opposition from big landowners, who are disproportionately represented in the federal and provincial assemblies.

“Given the weak mandate of the current government, a higher agricultural income tax is unlikely as it could trigger major social and political unrest,” he added.

What assurances has the government given to the IMF?

Pakistan has assured the IMF that it will increase the provincial agricultural income tax rate by up to 45 percent. It has also pledged to meet annual tax collection targets and to continue reforms in the energy sector and state-owned enterprises.

“This is an ongoing dialogue process and there have been discussions [with the IMF] on energy and SOE reforms, the privatization agenda and public finance,” Pakistan’s Finance and Revenue Minister Muhammad Aurangzeb told local media.

Haq, a tax expert, said the government’s primary focus would be on meeting the six-month revenue collection target set by Pakistan’s Federal Board of Revenue, a government agency that regulates and collects taxes.

What are the challenges ahead for Pakistan’s loan agreement?

Meeting tough tax targets and implementing structural reforms are major hurdles for the government to overcome.

The IMF has previously cancelled other loan programmes when conditions were not met. Payments to Pakistan could be suspended or stopped altogether, which would be a serious blow to a country struggling with a sputtering economy.

The IMF is pressing for cuts in government spending.

“Structural reforms are being resisted by vested interests, making efforts to meet IMF conditions even more difficult,” Haq said.

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