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9/30/06

Afghans Fear Fallout from Iran Sanctions

By Hafizullah Gardesh in Kabul, Institute for War and Peace Reporting (IWPR)

If the United Nations takes tough measures against Iran, its neighbour Afghanistan will be undermined economically and could be drawn into a new conflict.

As the threat of United Nations sanctions continues to hang over Iran, Afghanistan looks on nervously, concerned that its close economic ties with its western neighbour could suffer serious damage.

Some analysts are warning that the Iranians might decide to support Afghan insurgent groups as a way of getting back at the United States, which has taken the lead in pushing for action on the Iranian nuclear programme.

Diplomats from six key UN members - the US, Russia, China, Britain, France and Germany - met last week to discuss what sanctions might be applied against Tehran if it fails to suspend uranium enrichment and come back to the negotiating table. Iran missed an August 31 to comply with a UN resolution imposed a month earlier, which contained the threat of sanctions.

The government of President Hamed Karzai has close ties with the Americans, so would find it difficult to flout any formal embargo on trade with Iran.

But Afghan officials and commentators are keenly aware that sanctions would have a major impact on their own economy, reducing much-needed imports and forcing Iranian investors to pull in their horns.

Although it is not clear what UN sanctions would include, they might reduce its capacity to export goods freely - bad news for the Afghans, who import fuel, construction materials, food and other items worth 500 million US dollars a year, according to Hamidullah Farooqi, chief executive officer of the Afghanistan International Chamber of Commerce.

Farooqi told IWPR that many of the estimated 2,000 Iranian private firms now in the country would be likely to close, reducing production capacity and costing jobs in Afghanistan’s devastated economy.

Other investors, too, would be affected. Mohammad Azim Wardak, who heads the foreign trade department at the trade ministry, said even those who are now bold enough to invest in Afghanistan would likely be scared off by the prospect of conflict in the wider region.

“As things stand, few investors are willing to invest in Afghanistan because of the lack of domestic security,” he said. “When one of its neighbours moves towards instability, even to war, because of sanctions, no domestic or foreign investor will ever invest in Afghanistan. Many of them now share this concern.”

The economic, social and political implications of possible sanctions are closely intertwined. For example, what would happen to the approximately one million Afghans who the United Nations says are still living as refugees in Iran.

"Once sanctions are imposed on Iran, it will have to expel the Afghan refugees living in Iran as it will face an economic crisis. When they [refugees] return to Afghanistan, there will be no jobs waiting for them there,” said Farooqi. “It will be a big problem for the government."

Political analyst Abdul Razaq Mamoon suggested that a decision to send all the refugees home might be motivated not so much by economic necessity as by the political leverage it would bring.

“It will expel the…. refugees in order to bring pressure on the Afghan government and the international community,” he said, adding that this would have major political, security and economic implications.

Tehran has long argued that it is time for the Afghans to go home. In mid-September, its labour and social affairs ministry warned employers they would face heavy penalties if they hired Afghan labour.

A massive refugee return and the withdrawal of Iranian employers from Afghanistan would overwhelm an already difficult job market, leading to large numbers of unemployed people which trade ministry official Wardak warned would have a “very negative effect” on the security situation.

Political analyst Fazul Rahman Orya predicts that Tehran itself would take direct action to make things even hotter for the Americans and their Coalition allies in Afghanistan.

"If Iran comes under pressure, it’s going to be encouraged to support anti-government militants and establish contacts with Taleban,” he said. “Cultural, religious and political organisations that Iran has set up in Afghanistan will begin campaigning against America activities, pro-Iranian officials in the executive and parliament will move against the government and the Americans… and in the end the political and security situation will get even worse."

Orya claimed that Iranian diplomatic missions in the country had operated as intelligence organisations for years. “They will step up anti-US activities so that Afghanistan becomes a battleground for America and Iran, in which Afghans are the losers,” he said.

Analyst Mamoon, too, predicted dire consequences in the event of a conflict.

"If war breaks out in Iran, Afghanistan will be the weakest point because the Iranians will attack large cities there since there are Americans and other westerners there," he said.

The question, then, is whether the Afghan government can do anything to reduce the risks, and if so, what?

Some analysts believe the Karzai administration’s hands are tied.

"Afghanistan is not in a position to decide by itself. This country relies on American political, military and economic assistance. It will have to support the policy that America wants," said Mamoon.

Mohammad Ismail Youn, a political analyst who lectures at Kabul University, prescribed extreme caution, saying, “Historical experience shows that a policy of neutrality is the most effective for Afghanistan.”

The government itself remains inscrutable on the issue, with presidential spokesman Mohammad Karim Rahimi merely making a diplomatic comment that "we hope the Iranian nuclear problem will be solved through negotiations, so that there won't be any sanctions".

Hafizullah Gardesh is an IWPR editor in Kabul.

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