Prelims

Half Title Page

Policy Solutions for Economic Growth in a Developing Country

Endorsements

First of its kind, comprehensive and illuminating insight into Afghanistan with concrete recommendations on how the country can thrive and help itself reform its trade and trade relations with the world.

—Dr Ahmad Khalid Hatam, Chancellor, Kardan University, Kabul, Afghanistan

Immersing myself in the pages of this book, I journeyed through the world of Afghanistan's global trade, concluding with enriched insights essential for academics and policymakers.

—Dr Behnaz Saboori, Assistant Professor, College of Agricultural and Marine Sciences, Sultan Qaboos University, Muscat, Oman

I highly recommend this book for its in-depth exploration of Afghanistan's international trade journey, especially post-2001. It provides valuable insights for policymakers and scholars, offering innovative trade proposals and insights into Afghanistan's global trade role. Essential for understanding Afghanistan's trade potential.

—Dr Lyla Abdul Latif, Chair and Research Lead, Committee on Fiscal Studies, University of Nairobi

This book provides a timely and profoundly insightful exploration into a fundamental question that has bedevilled economic policy planning for decades – how should developing countries achieve economic growth? Straddling the topics of international trade, globalisation, economic development, state policy planning and private sector development, Wani diagnoses the impediments to export-oriented growth and proposes ambitious recommendations that may serve as correctives. His focus on Afghanistan provides a rich site for exploring these challenges. Using extensive quantitative analysis alongside well-established theoretical models, Wani positions Afghanistan vis-à-vis its regional neighbours as well as concerning ASEAN and SAARC nations and the European Union, thereby evincing opportunities for enhanced international trade. While optimistic, he also raises the trade-offs of different policy choices. The book draws on Wani’s decade of scholarly engagement with Afghanistan’s economy, ultimately succeeding in providing lessons on economic growth that may be applied to much of the developing world.

—Dr Nafay Choudhury, London School of Economics and Political Science

Title Page

Policy Solutions for Economic Growth in a Developing Country: Perspectives on Afghanistan's Trade and Development

By

Nassir Ul Haq Wani

Kardan University, Afghanistan

United Kingdom – North America – Japan – India – Malaysia – China

Copyright Page

Emerald Publishing Limited

Emerald Publishing, Floor 5, Northspring, 21-23 Wellington Street, Leeds LS1 4DL

First edition 2024

Copyright © 2024 Nassir Ul Haq Wani.

Published under exclusive licence by Emerald Publishing Limited.

Reprints and permissions service

Contact: www.copyright.com

No part of this book may be reproduced, stored in a retrieval system, transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without either the prior written permission of the publisher or a licence permitting restricted copying issued in the United Kingdom by the Copyright Licensing Agency and in the United States by the Copyright Clearance Center. Any opinions expressed in the chapters are those of the authors. While Emerald makes every effort to ensure the quality and accuracy of its content, Emerald makes no representation implied or otherwise, as to the chapters' suitability and application and disclaims any warranties, express or implied, to their use.

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library.

ISBN: 978-1-83753-431-9 (Print)

ISBN: 978-1-83753-430-2 (Online)

ISBN: 978-1-83753-432-6 (Epub)

Dedication Page

Dedicated to …

The Humble People of Afghanistan

&

My Beloved Parents (Gh. Mohi Ud Din Wani and Sara Parveen)

My Wife (Amina Hamid)

Our Daughter (Ummat-Un- Nafiyah) and Son (Ahmad Ehaan Wani).

List of Figures and Tables

List of Abbreviations

ADF

Augmented Dickey–Fuller

AFTA

ASEAN Free Trade Area

APPTA

Afghanistan Pakistan Preferential Trade Agreement

APTTA

Afghanistan–Pakistan Transit and Trade Agreement

ARDL

Auto Regressive Distributed Lag

ASEAN

Association of South East Asian Nations

ATP

Afghanistan Trade Policy

BFTAs

Bilateral Free Trade Agreements

BIMSTEC

Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation

BOP

Balance of Payments

BTA

Bilateral Trade Agreement

BSA

Bilateral Security Agreement

CAB

Current Account Balance

CAD

Current Account Deficit

CAR

Central Asia Region

CES

Constant Elasticity of Substitution

CCE

Commodity Composition Effect

CIF

Cost Insurance and Freight

CL

Civil Liberties

CMS

Constant-Market-Share

COR

Changes in Official Reserves

CSE

Commodity Structure Effect

DAB

Da Afghanistan Bank

ECA

Europe and Central Asia

ED

Export Survival

ES

Export Sophistication

ESCAP

Economic and Social Commission for Asia and the Pacific

EU

European Union

FMOLS

Fully Modified Ordinary Least Square

FOB

Free on Board

GATT

General Agreement on Trade and Tariffs

GDP

Gross Domestic Product

GFI

Global Financial Integrity

HHI

Herfindahl–Hirschman Product Concentration Index

HOS

Heckscher–Ohlin–Samuelson

HS

Harmonised Standards

IARTII

Intra-Regional Trade Intensity Index

IERTII

Inter-Regional Trade Intensity Index

IMF

International Monetary Fund

IRTS

Intra-Regional Trade Share

LF

Lafay Index

MDE

Market Distribution Effect

MENA

Middle East Nations

MFN

Most Favoured Nation

MNNA

Major Non-NATO Ally

NAC

Net Acquisition of Non-Bank Private Short-Term Capital

NAFA

Net Acquisition of Foreign Assets

NAFTA

North America Free Trade Agreement

NFDI

Net Foreign Direct Investment

NTBs

Non-Tariff Barriers

NTMs

Non-Tariff Measures

ODA

Official Development Assistance

PTA

Preferential Trade Arrangement

RCA

Revealed Comparative Advantage

RCF

Reverse Capital Flow

RDE

Residual Competitiveness Effect

REER

Real Effective Exchange Rate

RTA

Regional Trading Agreements

SA

South Asia

SAARC

South Asian Association for Regional Cooperation

SAE

Structural Adaptation Effect

SAFTA

South Asian Free Trade Agreement

SAPTA

South Asia Preferential Trade Agreement

SBC

Schwarz Bayesian Criterion

SIGAR

Special Inspector General for Afghanistan Reconstruction

SITC

Standard International Trading Classification

SPS

Sanitary and Phytosanitary

TBT

Technical Barriers to Trade

TC

Trade Costs

TCI

Trade Complementarity Index

TO

Trade Openness

TP

Tariff Preferential

TR

Tariff Rate

UN

United Nations

UNCLOS

United Nations Conventions of Law of Sea

UNCTAD

United Nations Conference on Trade and Development

WEF

World Economic Forum

WITS

World Integrated Trade Solution

WTO

World Trade Organization

About the Author

Dr Nassir Ul Haq Wani is the Dean of the Department of Research and Development and a Professor at the School of Graduate Studies, Kardan University, Kabul, Afghanistan. He also serves as an Adjunct Professor at Lovely Professional University, Punjab, India; and Director of Kashmir Research Information System (KRIS), J&K, India. He is the Chief Editor of the Kardan Journal of Economics and Management Sciences, Afghanistan Development Review and the Managing Editor of Kardan Journal of Social Sciences and Humanities.

Preface

This book combines my writings on international trade and development at Kardan University (KU) since joining KU in 2017. All the papers aim to develop concepts and ideas concerning trade and development in Afghanistan. This book provides a longitudinal study of Afghanistan's involvement in multilateral trade negotiations, highlights the policy propositions for enhancing and expediting trade ties with the region and other trading partners and presents policy discourse on key elements akin to trade escalation and growth.

This book offers a detailed analysis and explores the possibility that economic globalisation may finally deliver to developing countries what they had failed to achieve in five decades of multilateral negotiations – an opportunity to climb the industrialisation ladder and achieve development. The book offers a proposal for revising the format of trade negotiations in a way that helps overcome stalemates and deadlocks. Perspectives on trade and development will interest students and scholars of international trade, trade and development, negotiation, global governance, political economy, international relations and economics.

The volume thus addresses several issues and challenges fairly novel to the Afghanistan economy in general and the trade sector in particular. This book will be most suitable for applied courses on international trade and development for graduate and undergraduate students and for policy and decision-makers in the government.

I benefitted from a personal association with Dr Ahmad Khalid Hatam (Chancellor and Professor) at KU. It is hoped his influence on my work will have prevented detection. I benefited greatly from other faculty members at many presentations, conferences and workshops at KU and abroad. A special thanks to Dr Jasdeep Kaur Dhami (Professor and Dean R&D, CT University, Punjab, India), Dr Nafay Choudhary (British Academy Postdoctoral Research Fellow at the Centre for Socio-Legal Studies [CSLS], University of Oxford), Dr Amruta Deshpande (Assistant Professor, Indira School of Business Studies PGDM, Maharashtra, India) and Dr Suhailah Akbari (Postdoctoral Researcher at Humboldt Universität zu Berlin), for motivating and helping me with the research materials and offering conducive feedbacks whenever needed.

Mr Mirwais Rasa, Mr Muhammad Elyas Naseri and Mr Sadiq Zazai helped finalise the manuscript. For permission to reprint material from which material has been adapted, I am happy to acknowledge the South Asian Economic Journal, Kardan Journal of Economics and Management Sciences and Kardan Journal of Social Sciences and Humanities.

Dr Nassir Ul Haq Wani

Acknowledgement

Ahlamdulillaahi Robbil”Alamiin. All praise would only be bestowed to Allah subhanahu wa ta”ala, because only with His blessing finally this book could be finished. In this connection, I would like to express my gratitude to a number of people whose admission, permission and assistance contributed to a great deal of the process of finishing this book.

I BLAME ALL OF YOU. Writing this book has been an exercise in sustained suffering along with great learning, and finally, that learning outweighs the suffering. The casual reader may perhaps exempt themself from excessive guilt, but for those of you who have played the larger role in prolonging my agonies with your encouragement and support as well…you know who you are, and you owe me but anyway…

All praises and thanks to Almighty Allah who bestowed me with the potential, ability and opportunity to work on this book. It is a matter of great pleasure to express my cordial gratitude to KU's top leadership including Mr Roeen Rahmani and Ms. Meena Rahmani for the support and encouragement that they have given throughout this research work. The support extended by them throughout the course of writing this book is beyond words.

I express my gratitude to Dr Ahmad Khalid Hatam (Chancellor, KU), Dr Jasdeep Kaur Dhami (Professor and Dean R&D, CT University, Punjab, India), Dr Nafay Choudhary (British Academy Postdoctoral Research Fellow at the Centre for Socio-Legal Studies [CSLS], University of Oxford), Dr Amruta Deshpande (Assistant Professor, Indira School of Business Studies PGDM, Maharashtra, India), Dr Suhailah Akbari (Postdoctoral Researcher at Humboldt Universität zu Berlin), the team of DRD (Mr Muhammad Elyas Naseri, Mr Sadiq Zazai and Mr Mirwais Rasa) of KU and Senior Research Fellows (Dr Inam Ul Haq, Dr Imran Ibn Gani and Dr Sheeraz Ahmad Sofi) at Kashmir Research Information System (KRIS) for their kind support, encouragement and motivation. During the initial stages of book assembly, discussions with them influenced the structure and content of the publication. Their contributions transcend the realm of the book chapters. I express my gratitude for their time, intellect and assistance; however, their passion is what I value the most. I am also thankful to staff members of the library and all other teaching and non-teaching staff of KU for their kind care and cooperation.

Thank you to Dr Daniel Ridge, the Commissioning editor, at Emerald Publishing for guiding and providing kind feedback always. Hemavathi Rajendran and Lydia Cutmore of Emerald Publishing were consistently encouraging and forbearing in light of the delays caused by relocations, new employment and other stuff. Additionally, I appreciate Sangeeta Menon's introduction of Dr Daniel Ridge. You are an extraordinary connector.

I would like to express my gratitude to every academic with whom I have collaborated throughout the years and who have imparted invaluable knowledge. There are times when the bureaucracy – forms, deadlines, evaluations and spreadsheets – becomes overwhelming. Simply hearing about how someone's research is assisting in the transformation of circumstances for communities, industries and individuals across the globe, particularly in Afghanistan, is sufficient to remind me why I adore my profession.

Finally, I respectfully offer thanks to my beloved parents (Gh. Mohi Ud Din Wani and Sarah Parveen), for their love, mellifluous affection and sincerity which hearten me to achieve success in every sphere of my life. I am highly indebted to my wife Aamina Hamid for her frequent help, care and encouragement during the course of writing this book. A big thank you to my daughter (Ummatun Nafiyah) and son (Ahamd Ehaan Wani) for making my work easier, by having a cute smile always on their faces. That cute smile is like an energy booster always.

I also pay thanks to my beloved brothers, the most beloved sister and brother-in-law (Khursheed Ahmad Wani, Tanveer Ahmad Wani, Massarat Jan and Shahnawaz Ahmad Zarger) regarding their love, moral support and constant encouragement. Without their encouragement and support, the present study would have been a mere dream.