Iran and Afghanistan: Blood Relatives

Professor of Economics
Iran and Afghanistan: Blood RelativesIran and Afghanistan: Blood Relatives

Few countries share a bond that neither history nor politics can break. Afghanistan and Iran share and have shared their unique history and cultural heritage for so long that it is impossible to consider them anything but members of the same family. Thus one feels obligated to consider President Ashraf Ghani’s recent trip to Tehran, a belated Nowruz visit from a relative. The special bond enables the two countries to develop an understanding of each other beyond the clichés and media images. They see in each other true development partners offering each other a host of opportunities for growth and collaboration.

Currently Afghanistan is Iran’s fifth export market with a share of %7 from April 2014 to February 2015 Iran exported more than $2.18 billion worth of commodities and services to its neighbor. One third of these, $690 million, came from the northeastern Khorasan Razavi Province. Iran accounts for 8% of Afghanistan’s total imports. This is truly remarkable when one remembers that the Afghan market is fiercely contested by countries such as China, India and Pakistan with larger production possibilities and bigger populations. All these countries have their own special bonds with Afghanistan. This is a truly competitive market where Iranian and Afghan businessmen forge partnerships despite adverse conditions and rough terrain.

Presently Iran’s annual imports from Afghanistan accounts for only 0.02% of its total import, a value of 13 to $14 million. The trade balance in commodities and services is strongly in Iran’s favor. This is partly because Afghanistan’s manufacturing sector is still in its infancy and its agricultural sector suffers from decades of civil war and armed conflict. One cannot forget that Iran’s market is also aggressively contested by China and Turkey. Both countries have well-developed export-oriented economies with local partners and expert knowledge of marketing tactics. As Afghanistan’s manufacturing sector grows, so does its ability to compete regionally. To achieve full potential both countries must invest heavily in their transportation network, gaining access to each other’s market.

Economic evolution has left its mark on trade relations between two countries. However one cannot deny the fact that Iran-Afghanistan trade has its own unique dynamism and features. When President Ghani arrived in Tehran, a large number of Afghan businessmen were accompanying him. This was a good omen. Political analysts say what they may; businessmen and entrepreneurs do not waste time in finding opportunities for collaboration. Iranian and Afghan businessmen and businesswomen have shown that they are survivors and resolutely committed to the development process. In this trip the events at Iran-Afghanistan Chamber of Commerce and Iran’s Chamber of Commerce highlighted that both sides are committed to expanding their relationship both in scope and in depth.

As Afghanistan’s economy grows, its demand for fuel, high tech products, healthcare, higher education and investment increases. Its export capabilities can also expand to enable it to supply Iran’s eastern markets. Iran is Afghanistan’s natural choice in supplying what its growing economy would need. Both countries share the same language and same understanding of the accumulation process of knowledge and wealth. Iran’s entrepreneurs would share their knowledge and experience with their Afghan counterparts in business development and utilizing the modern management applications to expand markets and to run businesses efficiently.  

No matter what happens, Iranians and Afghans know as they share the same history, they share the same future. And that is an exceptional cornerstone to forge and to grow a partnership.