by Ahmed Rashid
Pakistan reacted by lashing out at its critics including the UN which was now openly critical of all external support for the Afghan factions. Pakistan accused UN Secretary General Kofi Annan of being partisan. ‘The UN has gradually marginalized itself in Afghanistan and lost credibility as an impartial mediator,’ said Ahmad Kamal, Pakistan's Ambassador to the UN in January 1998. Later Kamal told a conference of Pakistani envoys in Islamabad that it was not Pakistan which was isolated in Afghanistan, but that the rest of the world was isolated from Pakistan and they would have to come round to accepting Pakistan's position on the Taliban.9
As Pakistan advocated the Taliban's policies in the teeth of widespread international criticism, the government lost sight of how much the country was losing. The smuggling trade to and from Afghanistan became the most devastating manifestation of these losses. This trade, which now extends into Central Asia, Iran and the Persian Gulf represents a crippling loss of revenue for all these countries but particularly Pakistan, where local industry has been decimated by the smuggling of foreign consumer goods. What is euphemistically called the Afghan Transit Trade (ATT) has become the biggest smuggling racket in the world and has enmeshed the Taliban with Pakistani smugglers, transporters, drug barons, bureaucrats, politicans and police and army officers. This trade became the main source of official income for the Taliban, even as it undermined the economies of neighbouring states.
The border post between Chaman in Baluchistan province and Spin Baldak in Afghanistan is a prime location for watching the racket at work. On a good day, some 300 trucks pass through. Truck drivers, Pakistani customs officials and Taliban mix in a casual, friendly way guzzling down endless cups of tea, as long lines of trucks wait to cross. Everybody seems to know everybody else as drivers tell stories which would make the World Trade Organisation's hair stand on end. Many of the huge Mercedes and Bedford trucks are stolen and have false number plates. The goods they carry have no invoices. The drivers may cross up to six international frontiers on false driving licenses and without route permits or passports. The consignments range from Japanese camcorders to English underwear and Earl Grey tea, Chinese silk to American computer parts, Afghan heroin to Pakistani wheat and sugar, East European kalashnikovs to Iranian petroleum – and nobody pays customs duties or sales tax.
This Wild West of free trade expanded due to the civil war in Afghanistan, the drugs business and the collapse and corruption of Pakistani, Iranian and Central Asian state institutions along their borders with Afghanistan. It coincided with a hunger for consumer goods throughout the region. Pakistani and Afghan, transport and drugs mafias merged to fuel this need. ‘It's completely out of control,’ an official of Pakistan's Central Board of Revenue told me as early as 1995. ‘The Taliban are funded by transporters to open the roads for smuggling and this mafia is now making and breaking governments in Afghanistan and in Pakistan. Pakistan will face a 30-per-cent shortfall in revenues this year, because of customs duties lost to the ATT,’ he said.10
Trade has always been critical to the Islamic heartland. The Silk Route which linked China to Europe in the Middle Ages passed through Central Asia and Afghanistan and was run by the same tribesmen and nomads who are the truck-drivers of today. The Silk Route influenced Europe almost as much as the Arab conquests, for these caravans transported not just luxury goods, but ideas, religion, new weapons and scientific discoveries. A camel caravan might consist of five or six thousands camels, ‘its total capacity equalling that of a very large merchant sailing ship. A caravan travelled like an army, with a leader, a general staff, strict rules, compulsory staging posts, and routine precautions against marauding nomads,’ wrote French historian Fernand Braudel.11 Little seems to have changed in nearly 2,000 years. Today's smugglers operate with a similar military type infrastructure even though trucks have replaced camels.
In 1950, under international agreements, Pakistan gave land-locked Afghanistan permission to import duty-free goods through the port of Karachi according to an ATT agreement. Truckers would drive their sealed containers from Karachi, cross into Afghanistan, sell some goods in Kabul and then turn around to resell the rest in Pakistani markets. It was a flourishing but limited business giving Pakistanis access to cheap, duty-free foreign consumer goods, particularly Japanese electronics. The ATT expanded in the 1980s, servicing Afghanistan's communist-controlled cities. The fall of Kabul in 1992 coincided with new markets opening up in Central Asia and the need for foodstuffs, fuel and building materials as Afghan refugees returned home – a potential bonanza for the transport mafias.
However, the transporters were frustrated with the civil war and the warlords who taxed their trucks dozens of times along a single route. Although the Peshawar-based transport mafia were trading between Pakistan, northern Afghanistan and Uzbekistan, despite the continuing war around Kabul, the Quetta-based mafia were at a loss with the rapacious, Kandahar warlords who had set up dozens of toll chains along the highway from Pakistan. The Quetta-based transport mafia were keen to open up safe routes to Iran and Turkmenistan, just as the Bhutto government were advocating a similar policy.
Taliban leaders were well connected to the Quetta mafia, who were the first to provide financial support to the Taliban movement. Initially, the Quetta mafia gave the Taliban a monthly retainer but as the Taliban expanded westwards they demanded more funds. In Apil 1995, witnesses I spoke to in Quetta said the Taliban collected 6 million rupees (US$130,000) from transporters in Chaman in a single day and twice that amount the next day in Quetta as they prepared for their first attack on Herat. These ‘donations’ were quite apart from the single all-inclusive customs duty the Taliban now charged trucks crossing into Afghanistan from Pakistan, which became the Taliban's main source of official income.
With routes now safe and secure, the volume and area of smuggling expanded dramatically. From Quetta, truck convoys travelled to Kandahar, then southwards to Iran, westwards to Turkmenistan and to other CARs, even Russia. Soon the Quetta transport mafia were urging the Taliban to capture Herat in order to take full control of the road to Turkmenistan.12 Even though the ISI initially advised the Taliban not to attack Herat, the Quetta mafia had more influence with the Taliban. In 1996, the transporters urged the Taliban to clear the route north by capturing Kabul. After taking the capital, the Taliban levied an average of 6000 rupees (US$150) for a truck travelling from Peshawar to Kabul, compared to 30,000-50,000 rupees, which truckers paid before. The transport mafia gave Taliban leaders a stake in their business by encouraging them to buy trucks or arranging for their relatives to do so. And with the drugs mafia now willing to pay a zakat(tax) to transport heroin, the transit trade became even more crucial to the Taliban exchequer.
Pakistan was the most damaged victim of this trade. The Central Board of Revenue (CBR) estimated that Pakistan lost 3.5 billion rupees (US$80 million) in customs revenue in the financial year 1992/3, 11 billion rupees in 1993/4, 20 billion rupees during 1994/5 and 30 billion rupees (US$600 million) in 1997/8 – a staggering increase every year that reflected the Taliban's expansion.13 An enormous nexus of corruption emerged in Pakistan due to the ATT. All the Pakistani agencies involved were taking bribes – Customs, Customs Intelligence, CBR, the Frontier Constabulary and the administrators in the tribal belt. Lucrative customs jobs on the Afghan border were ‘bought’ by applicants who paid bribes to senior bureaucrats to get the posting. These bribes, considered an investment, were then made up by the newly appointed officials who extracted bribes from the ATT.
This nexus extended to politicans and cabinet ministers in Baluchistan and the NWFP. The chief ministers and governors of the two provinces issued route permits for trucks to operate and wheat and sugar permits for the export of these commodities to Afghanistan. Senior army officers complained to me in 1995 and again in 1996, that the competition between the chief ministers and governors of the two provinces in issuing route permits was a major source of corruption paralyzing the entire administrative machinery, interfe
ring and often at odds with the ISI's policy on Afghanistan and creating widespread Taliban ‘control’ over Pakistani politicans.
As the mafia extended their trade, they also stripped Afghanistan bare. They cut down millions of acres of timber in Afghanistan for the Pakistani market, denuding the countryside as there was no reforestation. They stripped down rusting factories, destroyed tanks and vehicles and even electricity and telephone poles for their steel and sold the scrap to steel mills in Lahore. Car-jacking in Karachi and other cities flourished as the mafia organized local car thieves to steal vehicles and then shifted the vehicles to Afghanistan. The mafia then resold them to clients in Afghanistan and Pakistan. Sixty-five thousand vehicles were stolen from Karachi alone in 1992-98 with the majority ending up in Afghanistan, only to reappear in Pakistan with their number plates changed.14
The transport mafia also smuggled in electronic goods from Dubai, Sharjah and other Persian Gulf ports while exporting heroin hidden in Afghan dried fruit and seasoned timber – on Ariana, the national Afghan airline now controlled by the Taliban. Flights from Kandahar, Kabul and Jalalabad took off directly for the Gulf, moving the Taliban into the jet age and giving Silk Route smuggling a modern commercial edge.
The ATT fuelled the already powerful black economy in Pakistan. According to an academic study, the underground economy in Pakistan has snowballed from 15 billion rupees in 1973 to 1,115 billion rupees in 1996, with its share in GDP increasing from 20 per cent to 51 per cent.15During the same period, tax evasion – including customs duty evasion-has escalated from 1.5 billion to 152 billion rupees, accelerating at a rate of 88 billion rupees per year. The smuggling trade contributed some 100 billion rupees to the underground economy in 1993, which had escalated to over 300 billion rupees in 1998. That is equivalent to 30 per cent of the country's total imports of US$10 billion or equal to the entire revenue collection target for 1998/9 (300 billion rupees). In addition, the Afghanistan-Pakistan drugs trade was estimated to be worth an annual 50 billion rupees.
In the NWFP, smugglers markets or baraswere flooded with imported consumer goods causing massive losses to Pakistani industry. For example, in 1994 Pakistan, which manufactured its own air-conditioners, imported just 30 million rupees’ worth of foreign air-conditoners. Afghanistan, a country then totally bereft of electricity, imported through the ATT 1 billion rupees’ worth of air-conditioners, which all ended up in Pakistani baras, thus crippling local manufacturers. When duty-free Japanese TV sets or dishwashers were available at virtually the same price as Pakistani manufactured ones, consumers would naturally buy Japanese products. The bara at Hayatabad outside Peshawar set up brand-name shops to attract customers such as Britain's Marks and Spencer and Mothercare, and Japan's Sony where the original products were available duty-free. ‘The ATT has destroyed economic activity in the province and people have give up the idea of honest earnings and consider smuggling as their due right,’ said NWFP Chief Minister Mahtab Ahmed Khan in December 1998.16
A similar undermining of the economy and widespread corruption was taking place in Iran. The transport mafia's smuggling of fuel and other goods from Iran to Afghanistan and Pakistan led to revenue losses, crippled local industry and corrupted people at the highest level of government. Iranian officials privately admitted to me that the Bunyads or the state-run industrial foundations as well as the Revolutionary Guards were among the beneficiaries from the smuggling of petroleum products, whose sale in Afghanistan earned 2,000-3,000-per-cent profit compared to Iran. Fuel was devoured in huge quantities by the war machines of the Afghan warlords and soon petrol pump owners in Baluchistan were ordering cheap fuel from Iran through the mafia, bypassing Pakistani companies (and customs duties) altogether.
Pakistan made several half-hearted attempts to rein in the ATT by stopping the import of items such as electronics, but the government always backed down as the Taliban refused to comply with the new orders and the mafia pressurized government ministers. There were no lobbies in Islamabad willing to point out the damage being inflicted upon Pakistan's economy or prepared to force the Taliban to comply. The ISI was unwilling to use the threat of withholding support to the Taliban until they complied. To bewildered foreign and Pakistani investors the government appeared willing to undermine Pakistan's own economy for the sake of the Taliban, as Islamabad was allowing a de facto transfer of revenues from the Pakistan state to the Taliban. It was a form of unofficial aid, which benefited the Taliban and made those Pakistanis involved extremely rich. They created the most powerful lobby to continue Pakistan's support to the Taliban.
The backlash from Afghanistan added fuel to the spreading fire of instability in Pakistan. In the 1980s the fall-out from the Soviet invasion of Afghanistan had created ‘the heroin and kalashnikov culture’ that undermined Pakistan's politics and economy. ‘Ten years of active involvement in the Afghan war has changed the social profile of Pakistan to such an extent that any government faces serious problems in effective governance. Pakistani society is now more fractured, inundated with sophisticated weapons, brutalized due to growing civic violence and overwhelmed by the spread of narcotics,’ wrote American historian Paul Kennedy.17
In the late 1990s the repercussions were much more pervasive, undermining all the institutions of the state. Pakistan's economy was being crippled by the ATT, its foreign policy faced isolation from the West and immediate neighbours, law and order broke down as Islamic militants enacted their own laws and a new breed of anti-Shia Islamic radicals, who were given sanctuary by the Taliban, killed hundreds of Pakistani Shias between 1996 and 1999. This sectarian bloodshed is now fuelling a much wider rift between Pakistan's Sunni majority and Shia minority and undermining relations between Pakistan and Iran.18 At the same time over 80,000 Pakistani Islamic militants have trained and fought with the Taliban since 1994. They form a hardcore of Islamic activists, ever ready to carry out a similar Taliban-style Islamic revolution in Pakistan.19
Tribal groups imitating the Taliban sprang up across the Pashtun belt in the NWFP and Baluchistan. As early as 1995 Maulana Sufi Mohammed had led his Tanzim Nifaz Shariat-i-Mohammedi in Bajaur Agency in an uprising to demand Sharia law. The revolt was joined by hundreds of Afghan and Pakistani Taliban before it was crushed by the army. The Tanzim leaders then sought refuge in Afghanistan with the Taliban. In December 1998, the Tehrik-i-Tuleba or Movement of Taliban in the Orakzai Agency publicly executed a murderer in front of 2,000 spectators in defiance of the legal process. They promised to implement Taliban-style justice throughout the Pashtun belt and banned TV, music and videos in imitation of the Taliban.20 Other pro-Taliban Pashtun groups sprang up in Quetta – they burned down cinema houses, shot video shop owners, smashed satellite dishes and drove women off the streets.
Yet after the Taliban captured Mazar in 1998, Pakistan declared victory, demanding that the world recognize the movement which now controlled 80 per cent of Afghanistan. Pakistan's military and civilian leaders insisted that the Taliban's success was Pakistan's success and that its policy was correct and unchangeable. Pakistan considered Iranian influence in Afghanistan to be over and that Russia and the Central Asian states would be obliged to deal with the Taliban through Islamabad while the West would have no choice but to accept the Taliban's interpretation of Islam.
Even though there was mounting public concern about the Talibanization of Pakistan, the country's leaders ignored the growing internal chaos. Outsiders increasingly saw Pakistan as a failing or failed state like Afghanistan, Sudan or Somalia. A failed state is not necessarily a dying state, although it can be that too. A failed state is one in which the repeated failure of policies carried out by a bankrupt political elite is never considered sufficient reason to reconsider them. Pakistan's elite showed no inclination to change its policy in Afghanistan. General Zia had dreamed like a Mogul emperor of ‘recreating a Sunni Muslim space between infidel “Hindustan”, “heretic” [because Shia] Iran and “Christian” Russia’.21 He believed that the message of the
Afghan Mujaheddin would spread into Central Asia, revive Islam and create a new Pakistan-led Islamic block of nations. What Zia never considered was what his legacy would do to Pakistan.
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SHIA VERSUS SUNNI:
IRAN AND
SAUDI ARABIA
There was a sense of change and renewal in Tehran in the spring of 1999. For nearly 20 years since the Islamic revolution, Tehran's women had shrouded themselves in the dictated garb of hijab -the uniform black tents. Now suddenly the hijabwas sprouting faux-leopard-skin trimmings and fur. Some women were wearing raincoats or donning the hijablike a cape revealing short skirts, tight jeans, black silk stockings and high heels. Rather than an imposed dress code, female modesty now appeared to be up to the individual. The loosening up of the hijabwas only one sign of the transformation of Iranian society after the election of Sayed Mohammed Khatami to the Presidency in May 1997, when he took 70 per cent of the popular vote in a stunning victory against a more hardline conservative candidate. Khatami had garnered the votes of the youth, who were fed up with 25-per-cent unemployment and high inflation and hopeful that he would usher in economic development and a more open society.
Khatami's victory created an immediate thaw in Iran's relations with the outside world as it opened up to the West, wooed its old enemy the USA with the need for “a dialogue between civilizations’ and sought an improvement in relations with the Arab world. Afghanistan was to become the primary issue in helping thaw relations between Iran, the USA and the Arab world. During his visit to Kabul in April 1998, US Ambassador Bill Richardson had already signalled that the USA saw Iran as a dialogue partner to help resolve the Afghan crisis. Iran was also talking to an old foe, Saudi Arabia.