Securing the Future of Afghanistan - Defence Committee Contents

3   Political and economic prospects

65. Whilst the maintenance of security is a prerequisite for a stable Afghanistan, there are many other aspects of governance which must be consolidated or improved. The most important player in delivering a settled Afghanistan is obviously Afghanistan itself but there are many other important players including the USA, NATO and regional states, particularly Pakistan. Crucially, there must be some level of peace settlement. The UK has an important but limited role in the political and economic prospects of Afghanistan.

66. The MoD made the following assessment of the situation in Afghanistan:

    A weak and politically unstable state fosters insecurity and holds back social and economic development. Afghanistan's diverse cultural and ethnic mix, and resistance to change from external influences, are contributing factors. Poor governance and corruption undermine trust in the government, while weak public sector capacity hinders service delivery. The transition process is now well underway but it will likely be another decade before the Afghan Government is able to pay for its own security costs without external support.

    The Afghan government is increasingly taking the lead, in working for better security, governance, social and economic opportunities for Afghan people. Long term stability in Afghanistan will also be dependent on increased regional cooperation and integration, particularly on issues such as security, trade and economic infrastructure. While improvements have been made, considerable challenges still lie ahead.[72]

Afghanistan's political prospects

The likelihood of a peace settlement

67. We asked Mark Sedwill what the prospects were for a peace settlement in Afghanistan. He stressed the importance of the international community remaining engaged after 2014 but that the peace process should be led by the Afghans. He also said that channels of communication had opened between the Afghan Government and the insurgency:

    [...] What is absolutely crucial is that we do not allow history to repeat itself. If you talk to them, most Afghans are really fearful that the experience of the early 1990s will be repeated. That is why, in the first half of this year, we put so much effort into securing the commitments from the international community—we got $4 billion over several years from the national security forces at Chicago and from the economic and development side at Tokyo—partly for the practical effect, which is very important, but partly for the political effect in order to convince the Afghans and their neighbours that we were not about to make the same mistake and abandon them, and that they should therefore no longer make decisions based on their fears. [...]

    In terms of the Afghan reconciliation itself, we are all very clear that it must be Afghan-led and Afghan-owned. We are starting to see the channels of communication opened between the Government and the insurgency and between some of the legitimate opposition—the northerners and others—and the insurgency. It is very exploratory and it is really early days, but the Afghans have done this before.[73]

Vincent Devine said that achieving a political settlement was a process which had started and would continue after 2014.[74]

68. In November 2011, Ahmed Rashid said that the region—Afghanistan and its neighbours—"seems to be moving inexorably toward greater conflict and contradiction rather peaceful resolution and reconciliation". [75] He did hold out some hope for a positive outcome but contrasted that with what might happen:

    A positive outcome for the region will depend on a deliberate, carefully considered Western withdrawal from Afghanistan, the existence of a political settlement with the Taliban, and Pakistan's willingness to rein in Islamic extremism and prevent a potential state meltdown. The grimmest outcome would result from a botched, overly hasty Western withdrawal, the absence of a political settlement with the Taliban, a continuing civil war in Afghanistan, the Pakistani leaders' continuing resistance to internal reform, the army's refusal to seek compromise on Afghanistan with the United States and the Afghans, and a consequent meltdown of the Pakistani state.[76]

69. We put to Mark Sedwill that many commentators thought that Afghanistan might collapse sometime after 2014. He said there was a good prospect Afghanistan would be able to govern itself and contain whatever criminal and political violence remained:

    [...] It is tempting in those circumstances always to point to the negatives, risks, gaps, challenges, failures—the mistakes that we have made. I cannot give you a guarantee about the outcome in Afghanistan, but I can tell you that the decisions lie in our hands and the hands of the Afghans and their neighbours. If we make the right decisions, there is a good prospect that Afghanistan will continue to achieve the campaign objectives and Afghanistan will be, not peaceful in the sense we understand it, but peaceful in the sense that it will no longer be a threat to the region. Afghan Government writ will run throughout its territory and they will be able to contain what criminal violence and what other political violence remains.[77]


70. To have an effective Afghan security apparatus, it is important that there is effective political leadership at a national and provincial level. Sir William Patey, former UK Ambassador to Afghanistan, thought that the political leadership would be good enough and stressed the importance of the Presidential election in 2014 and the Parliamentary elections in 2015:

    [...] How that presidential election is conducted and who becomes the president is quite a big question mark over the process. I know that there are parties working behind the scenes to draw up a broad coalition of people who are pro-reform and pro-democratic candidates. Nobody has put their head above the parapet yet, mainly on the grounds that anyone who does is likely to get it shot off—probably literally and metaphorically. Our hope would be that, as we get closer to it and as we go into 2013, you would begin to see what the alternatives are. I cannot predict the outcome, but it will be absolutely critical that that is a decent election, that we get a decent presidency going forward and that there is a good election in 2015 as well.[78]

Sir William added that it was not yet clear if Afghanistan was on the path to a stable democracy and that it was the quality of the third and fourth elections which was the true measure.[79] He did, however, say that that the necessary institutions were getting stronger:

    [...] I used to say in Afghanistan [...] that parliamentary elections are a necessary but insufficient condition for democracy. Without the other bits, the elections are a waste of time. Without independent institutions, the rule of law, a free press and separation of powers, you will never really have a democracy. All those things are in place in one form or another and need time to bed down and to find their way. In declaring the election, the Independent Election Commission of Afghanistan proved itself to be a very strong body in the face of physical and political threats to its independence. Whether it will be allowed to continue in that vein is, again, an open question, but these are important institutions that we have spent a lot of time supporting, both publicly, financially and morally.[80]

71. Mark Sedwill said that there were significant challenges particularly in south and east of the country. A successful Government was dependent on some kind of political accommodation and reconciliation with the Taliban.[81] Government would be weaker in rural areas where the Taliban was still strong:

    I would expect it [the Government] would be effective by the standards of a country at Afghanistan's stage of development. Let's remember this is one of the poorest countries in the world and will be for some time to come. We would expect it to be effective in the main urban centres, the main population centres, even in those contested areas. But clearly rural areas, if the Taliban are still strong in those areas, it would inevitably remain much weaker.[82]


72. Afghanistan is a culturally conservative country and Helmand even more so. There have been some minor improvements in the role and status of women in some parts of Afghan society since the fall of the Taliban, due in part to the involvement and resources of the international community. Nevertheless, significant problems remain, particularly in the fields of health, education, employment, security and access to justice. The International Development Committee concluded that in some respects the situation for women had deteriorated:

    While the situation for women in Afghanistan improved after the fall of the Taliban, it remains difficult and even appeared to us to have deteriorated in some respects since our last visit. Although DFID [Department for International Development] and the UK Government have spoken at length about women's rights and women in Afghanistan, we are concerned that this has not been followed by adequate and specific action and funding.[83]

73. We asked Sir William Patey about the protection of the human rights of women:

    That is why it is important to focus on the constitution and the rule of law, because the legal framework is such that women are protected under the constitution in terms of their rights. Any move away from the rule of law, where tribal justice or ad hoc justice is applied, is bad for women. We have seen that in the remoter parts of Afghanistan. [...] We are pretty powerless to do much about that, but what we can try to do is make sure that women's rights are enshrined in the constitution, and that there is no derogation from that, and to use our influence.

    We can use our influence beyond because if we continue to fund the Afghans, obviously we will make it conditional on things like corruption, human rights and how women are treated. So we will at least give the Minister of Finance, the President and all the others an incentive to do the right thing. So I think we should use our influence to the extent that we have it.[84]

74. We were told by several Afghan Ministers that women were consistently achieving the best results in their studies and were proving to be amongst the best new entrants to departments. We recognise the important role educated women will play in building an effective and functioning Afghan state.


75. During our visit to Afghanistan, General Smyth-Osbourne, ISAF Reintegration Cell, gave us a full and detailed briefing on reconciliation and reintegration. He described the Afghan Peace and Reintegration Programme and the other structures underpinning the peace process including the High Peace Council and Provincial Peace Committees.

76. Although the process of reconciliation is at an early stage, Mark Sedwill thought that there were some positive signs:

    [...] It is not yet at the stage where we can say there is a single, load-bearing channel that we could expect to conduct a formal negotiation. It has not reached that point yet, but there are genuine channels of communication open and we are seeing from the Taliban—including from the Taliban leadership, including in some of their public statements—a genuine interest in engaging in a political process. They recognise that they are not going to win their objectives on the battlefield. They need to engage in a political process, at least after we have left, and they can set conditions for that now. The prospects for some kind of political accommodation are positive, but it is at an early stage, and it will be very complex and difficult to follow for most of the next few years.[85]

77. Sir William Patey was not convinced that the Taliban was yet taking the process seriously:

    The Taliban adopted a position of, "We are not dealing with the monkey, we want to deal with the organ grinder" and they refused to deal with Karzai on the basis that the Americans called the shots. [...]

    [...] President Karzai and the international community have done what they can to create the circumstances, working with Pakistan, trying to bring them in, but until the Taliban think they need to make the compromises for a political process, I do not see it going very far.[86]

He further said:

    [...] The ideal solution is one in which there's a political process backed by everyone—Pakistan, the international community—and in which the Taliban agree to lay down their arms and they form a political party. There may be some deal done that gives them some positions in government in the run-up to an election. They're allowed to form a political party. You would need to talk about amnesties. There would need to be ceasefires. All of that is the sort of thing that you would expect to discuss in a genuine political process. That hasn't started.[87]

78. Reintegration of former insurgents is fundamental to a peace settlement. We were told that the amnesty available was targeted only at the insurgency and not at other crimes relating to narcotics. We were told that offences relating to narcotics carried heavier penalties than other crimes such as murder including crimes against the military. We asked the Secretary of State about the current programme of the reintegration of former insurgents in the light of this fact. He replied:

    there is a substantial reintegration under way; about 6,000 Afghans joined the formal re-integration programme. We suspect that there are many more Taliban adherents who simply melt back into civil society—who simply go back to their village and melt back into what they were doing before. I do not claim to be an expert on Afghan society, but I wonder how meaningful is the concept of handing in your weapon in an amnesty, in a society where everybody has a weapon. We must be realistic about the realities of Afghan society on the ground. We have got to promote the reintegration process and the idea that at the margin some compromises may be needed in order to make it realistic. On the other hand, I do not think we would want to say to the Afghans that they have to pass up the right to take action against any criminal in Afghan society, no matter what area of crime he has been involved in.[88]

79. Mark Sedwill acknowledged that ISAF's understanding of the Taliban was limited and when asked if the international community was hearing a consistent message from the Taliban, he said:

    [...] We have some insight into internal debate within the Taliban and where different groups and leaders position themselves, but that insight, inevitably, is far from complete. I think the leadership of the Taliban is beginning to accommodate itself to the need for a political settlement, but their objectives are still not the same as ours: they don't want the Afghanistan that we would see as acceptable and most of the Afghan population would see as acceptable. Again, you would expect that at this stage. There are many people within the Taliban who are essentially fighting to protect their local interests. [...] most of the Taliban, and most of the insurgency as a whole, essentially fight in their own areas. Therefore, quite a lot of this is driven by local tribal frictions, access to resources and so on. Quite a lot of the fight is for that reason. That is not really about policy or ideology.[89]


80. Not all commentators agree that negotiation with the Taliban is the way forward for Afghanistan. Frank Ledwidge, in his book Losing Small Wars, said:

    We have bought into a policy which will fail. If we are honest, everyone is simply crossing fingers and hoping for the best. In so doing we have continued a path of allowing ourselves to be pushed about by events, rather than being active and creative in seeking a solution that would be acceptable to all Afghans save the few who have a stake in the continuation of a corrupt and discredited government. The consequences of continuing down this path will be severe, damaging and immediately apparent. As matters stand we are simply, through ennui, fatigue or laziness, consciously allowing Afghanistan to drift.[90]

81. Recognising that all sectors of Afghan society, not just the Taliban, have to accept any peace settlement, we asked Mark Sedwill how durable any peace settlement would be. He replied :

    It depends on how many people are involved, and on the terms. We have all made clear what we believe the terms should be: there needs to be a renunciation of violence and association with terrorist groups, and there needs to be respect for the Afghan constitution, including, of course, the human rights provisions— inevitably, many of us have focused on women's rights, but also children's rights and the rights of other disadvantaged groups. That is not just right, it is actually necessary, if it is to be durable, because there is a constituency in Afghanistan who have really benefited from the last 10 years. Of course the implementation of what we would regard as acceptable standards of human rights, including women's rights, throughout the country is still very uneven. It is particularly uneven in rural areas in terms of levels of education and so on, and social exclusion is still high, but you would expect that in a country at Afghanistan's stage of development. But there is a constituency that will not give those things up without a fight.

    Although I would not like to put too much emphasis on this, we are, interestingly, starting to see some recognition [...] that they need to move on that issue and accommodate the positions that the rest of Afghanistan hold and the commitment that the rest of Afghanistan has to girls' education, to women's rights and to the other advances of the last 10 years.[91]

82. During our visit to Afghanistan, we were told by a number of NGOs and Afghan women that they were concerned about the discussions with the Taliban and that the gains achieved in respect of women's rights might be lost. In response, the Secretary of State said:

    One has to be careful how one states this case. Many women in Afghanistan are concerned about the discussions with the Taliban. Discussions with the Taliban must be the way forward; that is not an optional extra. In my judgment, there will not be a lasting settlement in Afghanistan without discussions with the Taliban. I understand that there will be concerns about the expressed agenda of some parts of the Taliban. I think there should be some reason for optimism, though. We have seen—it is a matter of public record—that there is debate within the Taliban about the popularity of some of the policies that they have previously espoused, particularly with regard to women's education. Again, I don't claim to be an expert on this, but my understanding is that the rhetoric around women's education has subsided somewhat over the past few years and there is evidence that the Taliban recognise that this is not an issue that they should focus major attention on if they want to establish broad support across the population.[92]

83. We asked the Secretary of State what would happen if a peace settlement had not been achieved by the time of withdrawal of ISAF. He replied:

    I suspect that the Afghan National Security Forces would effectively hold the important parts of the country—the population centres, the key towns and cities, the principal communications arteries and the major economically important areas. I would expect attempts at dialogue, at groping towards a peace process, to continue. I would expect the situation to be messier than it is today with ISAF present on the ground, but I sense that there is a growing recognition on both sides of this fight that neither side can win outright. [...] So both sides will want to make progress ultimately to some kind of political accommodation.

    Our own experience in similar situations suggests that this might not be a smooth process. It might go in fits and starts. There may be periods when it looks as though the political process is making way and there may be other periods when it looks as though the political process is stalled and the focus is on the ability of the security forces to maintain the ground. But I would expect slow and messy progress.[93]

The importance of other regional states

84. Witnesses have been clear that the Afghans must make for themselves their own political settlement and cannot be forced by the ISAF/NATO powers into something not of their own political design. On the other hand, the ISAF/NATO countries can play a more direct role in influencing the attitudes of the key regional players in the situation. Without a favourable international climate, any domestic Afghan political settlement would face significant challenges.

85. Our witnesses were divided on the prospects of the emergence of a favourable international climate. Sir Rodric Braithwaite, former Ambassador to the Soviet Union and author of Afgantsy, said:

    all the neighbours, of course, have their own interests, and much more durable interests than ours, in Afghanistan. The trouble is that the interests very often conflict with one another, India and Pakistan being the obvious one. If the Indians and Pakistan behaved differently and were prepared to agree with one another on how they should treat Afghanistan, a lot would change; but that does not seem very likely.

    Of course, Iran is another one which has a strong, legitimate and on the whole quite often constructive interest in Afghanistan; but they tend to be excluded by American desires or obsessions. I think the Russians have an interest, and they are still very well connected in Afghanistan. They know lots of people. I think they are mainly Northern Alliance people, but they can make an input; and of course the immediate neighbours also have an interest.[94]

He emphasised that China was optimistic in its long-term view of Afghanistan and was buying up mines.[95]

86. We asked Mark Sedwill who were the critical players in ensuring a lasting peace settlement. He replied:

    All the region has a role to play. It is important that Afghanistan is embedded economically, and, in terms of security, in the region as a whole. There are various processes to encourage that. The Turks have been leading one called the Heart of Asia process, but there are others as well. The key external player—other than ourselves, of course—is Pakistan. It is where the insurgency is based. The border between the two countries bifurcates the Pashtun belt. There are 18 million Pashtuns in Afghanistan and about 30 million in Pakistan.

    In Pakistan they face a severe problem with their own Taliban, the TTP. Of course, that is why they point out that they cannot afford instability in the Pashtun areas of Afghanistan, because it will spill back into Pakistan and make their own problems even worse. That is why we are hoping that Pakistan will take more effective action to promote a political settlement. Of all the external players, I think Pakistan is the most crucial.[96]

87. On 3 to 4 February 2013, the Prime Minister hosted a summit at Chequers , attended by President Karzai of Afghanistan and President Zardari of Pakistan. They were joined by Foreign Ministers, Chiefs of Defence Staff, Chiefs of Intelligence, the Afghan National Security Adviser and the Chair of the Afghan Peace Council. This was the third in a series of trilateral meetings to discuss the Afghan-led peace and reconciliation process and how to strengthen joint efforts to address extremism and advance regional peace and stability. In the joint statement following the summit, the three leaders agreed on the urgency of the work on peace and reconciliation and committed themselves to take all necessary measures to achieve the goal of a peace settlement over the next six months. They affirmed their support for the opening of an office in Doha for the purpose of negotiations between the Taliban and the High Peace Council of Afghanistan.[97] Such meetings are due to take place.

88. Mark Sedwill thought that the Afghan-Pakistan bilateral relationship would be key to a lasting peace settlement:

    While there is distrust in that relationship, while there are frictions along the border and while they essentially fear each other's motives, it is inevitable that insecurity will continue along the border. It is very difficult in those circumstances to get Pakistan and the Pakistani security apparatus to commit to an Afghan political settlement and use their influence to try to push or encourage the Afghan Taliban, many of whom are operating from their territory—although, in many cases, ungoverned parts of Pakistan's territory—to commit to a political settlement. It is really important that we stabilise that relationship.[98]

89. The Secretary of State stressed the need for political compromise between the different ethnic and political groups in Afghanistan. He also said:

    There are reasons to be cautiously optimistic. The dialogue that is going on, brokered by the UK—the trilateral discussions between Pakistan, Afghanistan and the UK—suggests a level of Pakistani engagement with the issue, and a commitment to trying to find a solution to the problem that we have not always seen in the past. That is a very healthy indicator. There are signs that there is a dawning realisation in Pakistan that as ISAF troops withdraw from Afghanistan, it is very much in Pakistan's interest to have a stable settlement in Afghanistan. Otherwise, Pakistan runs the risk of becoming the mirror image of Afghanistan today—a country potentially destabilised by people who find refuge in an unstable neighbour. There are good, self-interested reasons why Pakistan is engaging, and thus those reasons are likely to be enduring.

    [...] The announcements made during the recent meeting between the US President and President Karzai around the Doha office and that process are also quite positive. It is going to be a slow and careful process. I don't expect dramatic progress, but I think we are heading gently in the right direction, rather than in the wrong direction.[99]

90. There are many Afghans who have benefited from the changes in Afghanistan over the last ten years, including Afghan women. Mistakes have been made, principally by promoting a western style analysis on efforts to improve the position of women in Afghanistan. Efforts should be made going forward to ensure women's programmes realistically reflect the differing needs of women from rural and urban areas. However, these groups, including women, will need to be brought into the peace settlement, which must not disadvantage them. If Afghanistan is to become stable and functioning, it is important that those currently excluded are brought into the process and are given a stake; this particularly applies to women. If as a consequence of negotiating with the Taliban they are excluded, the progress made could easily unravel. UN Resolution 1325 requires that in all peace negotiations in regions affected by conflict, women's voices must be heard to ensure the long-term stability of any negotiated settlement. Afghanistan is no different. The United States has passed the Afghan Women and Girls Security Promotion Act 2012 which requires the development of a three part strategy to ensure and strengthen women's security and lays a foundation for Afghan women's participation in Afghan society in the long term. In its response to this Report, the Government should inform us how it is contributing to ensuring women are able to participate in discussions on security and transition in Afghanistan.

91. It is in the nature of a negotiation that both sides have to give ground. If a reasonably free and fair election takes place, it would seem unpalatable for those who have expended great resources including the lives of Armed Forces personnel, Afghan as well as Western, to compromise on issues like democracy, the rule of law and women's rights. The extent of the need to compromise will be a function of relative strength. The Government should make every effort to support its international partners to support a peace settlement, but should make it clear that some principles of rule of law and human rights cannot be compromised in the process.

92. While we recognise that the UK has a limited role in facilitating a peace settlement, the Government should continue to use its influence with the Afghan Government to promote a satisfactory agreement for all Afghans. Many countries in the region are important in realising a secure Afghanistan, including Pakistan, China, India and Iran. The Government should build on the trilateral meetings it has hosted and urge international partners vigorously to support a peace settlement.

Economic development and the judicial system

Economic development

93. Economic development is essential to the promotion of a successful Afghanistan after 2014. During our visit to Afghanistan we saw signs that the economy was improving. There were more, and more varied shops, in Kabul than we had seen on previous visits. The Secretary of State said that economic development must be the answer to the insurgency but acknowledged the difficulties caused by the profitability of the cultivation of narcotics.[100]

94. Mark Sedwill said that the Afghan economy was likely to remain aid dependent until the mid 2020s:

    [...] The World Bank's estimate is that there is a fiscal gap of around 40% now and up until about 2014, and that will be 20% by the end of the decade and by the mid-2020s should close, if Afghanistan remains on its current track. Growth per year has been about 9% per year, which you would expect from a very low base, as we have seen in Afghanistan. Their own revenue collection has grown quite significantly. In about 2005, it was 3% of GDP. It is now 11%. Clearly, that needs to continue, which is one reason we focus so heavily on customs collection, and so on.

    The main staple for the economy is still agriculture. In the previous eras, they exported high-quality soft fruits into the Indian market. Therefore the AfPak-India trade agreements—the AfPak transit trade agreement—is important to the agricultural sector for Afghanistan. Pomegranates and other exports of this kind. Towards the end of the decade we hope that mineral resources will come on-stream. You have probably seen the reports of the vast mineral resources Afghanistan has. Properly managed, they have a genuinely prosperous future, not just a future above subsistence level.[101]

95. In its recent inquiry into Afghanistan, the International Development Committee found that the withdrawal of military spending by ISAF in Afghanistan would have an adverse impact on the economy which would threaten growth and economic stability.[102] The Committee recommended:

    [...] DFID will also need to continue to lead donors in pledging and disbursing aid so that there will not be any sudden drops in funding that could exacerbate an extremely fragile situation. Based on the assessment of the likely economic impact of military withdrawal, the UK Government should be prepared to do whatever it can to address this potential shortfall in spending including urging other governments to increase their aid commitments in Afghanistan to fill the economic gap.[103]

96. When we asked Mark Sedwill about the economic impact of the withdrawal of ISAF, he said that the World Bank had estimated that growth in Afghanistan would fall from the current seven to nine per cent to low single figures.[104] He added:

    Quite a lot will depend on how we, essentially, repatriate some of the people whom we have employed. We employ a vast number of interpreters and highly skilled people within the ISAF mission. As we have seen elsewhere, if given lump sums and the right kind of training, they can come out and start setting up businesses of their own. The World Bank has taken that into account, and that is a big part of the underlying work on the transition.[105]

97. As we said above, we saw signs of the economy improving. We met a businessman and his non-Afghan associate who had set up a variety of retail, mining and insurance companies. He said that in the last ten years many Afghans had made a lot of money and the challenge was to keep it in the country. His own staff were 90 per cent Afghan, and he had attracted a lot of young 'returners'; he was optimistic about the younger generation. His Afghan staff included women both in management roles and in laboratory work.

98. He told us of the barriers to enterprise. The legal climate was not propitious, particularly in respect of mining. Which he felt was Afghanistan's best hope and the only sector likely to attract direct foreign investment. To give an example, the right to explore for deposits did not entail the right to exploit them; a draft law designed to remedy this situation and others had been amended and its future was now uncertain. Another handicap was the variable quality of administration, though the UK was working to help this and the Ministry of Mines had been considerably improved as a result. Poor transport links, both internal and through neighbouring countries, were also problematic.


99. Economic growth and increased security will not be enough to ensure a peaceful Afghanistan if the problem of corruption is not tackled. Mark Sedwill told us that corruption and abuse of power was intrinsic in Afghan Society and would take a generation to resolve. He outlined the ways in which corruption was being addressed:

    Essentially, there are two things that I would say that we have done in the last year to tackle this: one by us, one by the Afghans themselves. At the Tokyo conference, we agreed with them a very challenging mutual accountability framework, which requires them to take corruption seriously and to get a grip on it throughout the system—not just high-profile cases, but throughout the system. The aid that we have committed over the period after 2014 is dependent upon them honouring those commitments.

    Just a few days later—I think it was 26 July—President Karzai issued a decree with 164 time-bound measures on corruption, and some of those are starting to take effect. Of course, declaratory policy is all very well, but it does mean that we have some specific commitments against which we can hold them to account.[106]


100. The Kabul Bank was a trusted institution on which millions of Afghans relied. Its collapse caused a financial crisis in Afghanistan. The bank's controlling shareholders, key supervisors and managers led a sophisticated operation of fraudulent lending and embezzlement predominantly through a loan-book scheme. This resulted in Kabul Bank being deprived of approximately $935 million, funded mostly from customer's deposits. There were many opportunities for national and international bodies to detect these activities between 2007 and their eventual exposure in 2010. However from September 2010 to April 2011, there was disagreement on the action to be taken. In April 2011, when it became clear that this was affecting donor funds, the Afghan Government agreed to put the bank into receivership. In June 2012 following investigations, indictments were issued against several bank staff and government employees.[107]

101. We asked Mark Sedwill for the latest situation with regard to the Kabul Bank:

    To be candid, it took about a year after the Kabul Bank incident itself for the Afghan Government to grip it. There were some very powerful political interests involved and, as we all know, that was very challenging for President Karzai and his Ministers to work through. They faced losing some of the support of the principal power brokers within Afghanistan, so he had to manage that very carefully and it took longer than we had expected or wanted for them really to take a grip on it and start to recover some of the funds and, indeed, follow up with criminal prosecutions and sort out the bank.

    After a year, the right measures were in place, and it was really as a result of that that commitments were possible at the Bonn conference, and, indeed, international commitments from the IMF essentially recertified that aid programmes that had been suspended could restart. So the experts essentially concluded that the Kabul Bank was on track, but it remains the most visible sign of the underlying corruption problem.[108]

102. Mark Sedwill said that the international community had acted as quickly as possible when the scandal hit but that the Afghans had taken longer:

    [...] I think the Afghans took longer, and they took longer partly because it wasn't just members close to the President's family, but actually the most significant shareholders were among other very senior power-brokers in Afghanistan, and he had to manage that. I think that took longer than we expected and there were very some difficult exchanges, including exchanges in the Afghan National Security Council, which I and others had with him and his Ministers over exactly that, where we had to confront them with the prospects for international support for Afghanistan were they not to take the right action. It was a very, very difficult period.[109]   

On 5 March 2013, 21 individuals were convicted of wrongdoing. These included two senior executives from the bank who were sentenced to five year prison terms and ordered to repay some $800 million.[110]


103. Afghanistan's economy depends heavily on the drugs trade. The country supplies over 90 per cent of the world's opium. International bodies say that the drugs trade helps fuel the Taliban insurgency which is estimated to receive some $100 million a year from it.[111] Robert Fox thought that international intervention had made little difference to the growth of the poppy and that narcotics were an important part of the Afghan economy:

    Without exaggerating, the enduring part of the Afghan economy, when the aid and war economies are taken away—if they do go away after 2014—is the narco economy. Looking at the statistics, there is a hard yield of between 5,200 and 6,000 cubic tonnes of, I think, wet opium, a year and it supplies over 90% of the world's heroin ingestion. Despite the good intentions, not least by the Government of the UK at the time in Bonn, we have made very little difference.[112]

Sir William Patey was equally pessimistic:

    By the time I left, I became pretty pessimistic about what we could achieve and had achieved. It was clear we had achieved significant reductions in poppy cultivation in Helmand—a 40% reduction over two years—by a combination of law enforcement, alternative livelihoods and wheat seed distribution. No one thing seemed to work. If you got the combination right—a good governor and a Minister of counter-narcotics who was working with you—you could achieve some progress.

    But by the time I left, the overall production of poppy in Afghanistan had gone up. It had gone down in Helmand and up elsewhere. [...] Other places that had been poppy-free suddenly became attractive again for poppy.[113]

The problem is compounded because, as Non-Governmental Organisations told us, efforts to suppress poppy cultivation, unless accompanied by effective measures to provide alternative means of earning a livelihood, may provide a fertile recruiting ground for the Taliban.


104. On our visit to Afghanistan, Chief Justice Azimi told us that they had been developing an effective judicial system. Their first challenge had been human resources—knowledgeable, honest judges cannot be purchased but must be trained. They had screened existing judges and dismissed those that were unqualified. They had also developed a new system for the appointment of judges. A team of UK officials is working with the Directorate of National Security to improve the judicial system from arrest to verdict and to ensure that it is compliant with human rights.

105. Mark Sedwill told us that the rule of law was crucial in the development of Afghanistan:

    [...] you are absolutely right to focus on the judiciary, the prison system and the rule of law generally. [...] I think this remains one of the most significant risks to Afghanistan's own stability—the connection of their people to their own Government and system, but of course our own attitude to the resilience of the state. It is going to be a long process and it remains one of the most significant risks.[114]

106. We asked if there were prisons which could keep their prisoners secure, Mark Sedwill said:

    There are some, but it is far from country wide, and one of the problems with the prisons is that people are, of course, able to bribe their way out—not in a high-profile case, because it's self-evident if it happens there, but at lower levels it is possible for people to do so and the prison system remains a significant gap. So, I think there are prisons that meet that test, but it's far from all of the prisons, let alone all of the detention facilities that exist in Afghanistan so far.[115]

107. As part of our meetings with the National Directorate of Security, we visited the construction of court holding cells and new prisons cells on two sites in Afghanistan. The construction of these prisons will ensure better conditions in prisons but the key measure needed is an improvement in the human rights of prisoners.

108. We were particularly concerned that UK Armed Forces would not be able to transfer the prisoners held at Camp Bastion to the Afghan penal system because of human rights failures. The Secretary of State said:

    [...] At one time last year there was an injunction in place preventing the transfer of UK detainees into the Afghan system. In response to that injunction and in preparing a case to challenge it in the courts, a great deal of work was done in the MoD. In the course of that work, material came to light that caused me to make a policy decision, independent of the injunction under which we were placed, to suspend transfers into the Afghan system until further notice.

    The injunction is no longer in place. The policy decision remains in place. [...] We have to establish or re-establish a route to transfer detainees into the Afghan judicial system. [...] that will be acceptable to the High Court here to allow that process to resume. We are looking at different approaches as a matter of urgency in theatre and we very much hope that it will be possible to resume transfers some time during the course of the spring.[116]

109. On 23 March 2013, the US Government agreed to hand over final control of its last detention centre to the Afghan Government. General Dunford, ISAF Commander, handed over the Parwan detention centre to Bismillah Khan, Afghan Defence Minister. The majority of the prisoners were already under Afghan control but a few hundred prisoners had not been handed over because of US concerns that the Afghan authorities might release them. With the transfer of the final prison run by the USA in March, we are the only nation still running a prison in Afghanistan. This raises a wider point. Getting countries the UK is working with to meet standards in their judicial and prison systems acceptable to UK courts may not always be possible. If the UK Armed Forces are to continue to be involved with a range of partner countries, what is the policy on dealing with prisoners? The UK cannot continue to run a prison after leaving Afghanistan, or indeed in any other country UK forces have deployed to. Nor would it be acceptable to bring such prisoners back to the UK.[117]

110. For Afghanistan to grow economically and to reduce its dependence on international aid, it will need the continuing support of the international community for some time. During our recent visit to Afghanistan, we saw welcome signs of economic activity not seen on earlier visits. However, corruption and the narcotics trade remain a problem and are likely to continue to be so after 2014. To ensure that Afghanistan does not lose the gains it has made, the UK Government should continue its support after 2014 for economic development, and for reducing corruption and the size of the narcotics trade. But it should also make it clear that if corruption increases and human rights and the rule of law are not protected, that the UK government may consider withdrawing that support.

111. We were encouraged by evidence of indigenous Afghan initiative and recommend that the UK investigate ways of further encouraging UK companies and institutions to develop links with Afghanistan, since only through the development of its industrial and commercial base can the country have a sound future.

112. The rule of law is an important component of a stable Government, the FCO should continue its efforts to promote a strong judicial and penal system in Afghanistan. The building of new prisons in Afghanistan is a welcome development but the crucial improvement needed is in the provision of prisoners' human rights. In response to this Report, the Government should inform us of the latest position on the transfer of detainees from Camp Bastion to the Afghan penal system.

113. The Government must, as a matter of the highest priority, develop, in conjunction with international partners, a policy which will assist the Afghan Government to establish judicial and penal systems which satisfy international standards. In regard to future deployments, the UK Government must urgently develop a policy which protects the position of UK personnel in dealing with detainees in jurisdictions that may not meet the requirements of UK courts.

114. Six new women's prisons have been built in Afghanistan and we were concerned to hear that many of the prisoners are women who have fled domestic violence. We were informed that the women could leave prison if they returned home to their families. It is unacceptable for women to be imprisoned for leaving a violent home life and to be forced to return to violence as a condition of release.

115. In response to this Report, the Government should set out its current thinking on its future role in Afghanistan. It should spell out the practical measures it envisages to promote economic development, establish a strong judicial and penal system and reduce corruption and tackle narcotics, and what criteria it will use to quantify progress.

Role of the FCO post 2014

116. We asked Mark Sedwill about the role of the FCO after 2014. He said that they would continue to work like a normal embassy in a country like Afghanistan:

    [...] the political accommodation, the political process, will almost certainly continue beyond 2014, not least because [...] the new president and the new Government will have to be part of that, not just the outgoing Administration of President Karzai. He is partly setting the conditions for that. After 2014, I expect us still to have a very big embassy in Kabul, and that will still contain around a dozen Government Departments—the Foreign Office, DFID and all the others. There will still probably be people there from SOCA or the National Crime Agency, as it will become, working on counter-narcotics. There will still be military people there and so on. But as in other places, our role will become increasingly one of diplomatic influence on a political process, which will be an Afghan political process, rather than direct intervention.[118]

117. As part of the transition to Afghanistan control, Provincial Reconstruction Teams (PRT) are being progressively phased out. The PRT in Helmand will withdraw at the end of 2014. Mark Sedwill said:

    [...] We don't expect to have a mission on the ground in Helmand after 2014. The PRT, as they will throughout the country, will close and we will maintain our legacy programmes in Helmand, essentially working through our teams and from Kabul and one or two regional centres.[119]

He outlined the work the PRT had done in helping the provincial government build its capacity in governance, health and education.[120]

118. We asked witnesses if Afghanistan was likely to descend into civil war in the years following 2015. Sir William Patey said that there was a 50 per cent chance of it happening.[121] He added:

    [...] We will have some pretty difficult times ahead. There will be all sorts. There will be more green on blues. There are going to be corruption scandals. There is going to be all of that, but I do not think that anything I have seen in the last year is sufficiently bad to derail the strategy.

    I do think that we have the right policy in terms of the timetable. We could come out earlier—you could come out earlier and you could increase the risks. The corollary of that might be if we stayed longer we would be more likely—I do not think that is true. I think there comes a point where you have outlived your usefulness, and I think actually coming out in an orderly fashion by the end of 2014 will tip the balance. I think the Taliban will find it very difficult to sustain an insurgency against their own people when we remove their excuse that they are fighting a foreign invader—that will tip the balance. [...][122]

Mark Sedwill said that there was a risk of a descent into civil war[123] but that the UK should:

    Maintain both the practical but, more importantly, the political commitment that we make. So loose talk about rushing for the exit, and so on, in newspaper articles and books actually has a political effect, because it undermines Afghan, Pakistani and regional confidence in our determination to see it through, and if they act on their fears then the worse scenarios that you set up become that much more likely. So this has to be about transition and commitment, not withdrawal and exit. We have to be clear that 2014 is the moment at which we complete our combat mission and that our commitment to Afghanistan continues. That way we give the Afghans the best prospect of securing and governing their own country to their own standards and recognising all the challenges that will remain, but doing so in a way that essentially protects the reason we are there in the first place, which is to protect our national security and to prevent another threat emerging which directly threatens our national security.[124]

119. The Secretary of State said that the message he wished to give the Afghan people was:

    We cannot build the future of your country; we can build the conditions that give you a reasonable, sporting chance of doing it for yourselves, but the future lies with you, in political compromise and agreement, in allowing the institutions of civil government to flourish, and in tackling the corruption that is still a major problem at every level of Afghan society. [125]

120. We hope that Afghanistan can become a secure, prosperous and flourishing country but we are concerned that Afghanistan could descend into civil war within a few years. Engaging with the Taliban in the peace process will clearly be necessary. In response to this Report, the Government should spell out what steps it intends to take to at least hold on to the progress made so far.

72   Ev 82  Back

73   Q 253 Back

74   Q 253 Back

75   Pakistan on the Brink: the future of Pakistan, Afghanistan and the West by Ahmed Rashid, page 188 Back

76   Ibid , page 189 Back

77   Q 263 Back

78   Q 60 Back

79   Q 60 Back

80   Q 61 Back

81   Q 231 Back

82   Q 231  Back

83   Afghanistan: Development progress and prospects after 2014, International Development Committee, Sixth Report 2012­13, HC 403 Back

84   Q 94 Back

85   Q 245 Back

86   Q 84 Back

87   Q 86 Back

88   Q 314 Back

89   Q 255 Back

90   Losing Small Wars - British Military Failure in Iraq and Afghanistan by Frank Ledwidge Back

91   Q 254 Back

92   Q 322 Back

93   Q 311 Back

94   Q 130 Back

95   Q 130 Back

96   Q 257 Back

97   Chequers Summit Joint Statement February 2013 Back

98   Q 253 Back

99   Q 310 Back

100   Q 316 Back

101   Q 234 Back

102   Afghanistan: Development progress and prospects after 2014, International Development Committee, Sixth Report 2012­13, HC 403, paragraph 62 Back

103   Ibid paragraph 66 Back

104   Q 237 Back

105   Q 237 Back

106   Q 238 Back

107   Report of the Public Inquiry into the Kabul Bank Crisis, November 2012 Back

108   Q 238  Back

109   Q 242 Back

110 Back

111   / Back

112   Q 14 Back

113   Q 72 Back

114   Q 238 Back

115   Q 239 Back

116   Q 355 Back

117 Back

118   Q 262 Back

119   Q 262 Back

120   Q 260 Back

121   Q 97 Back

122   Q 98 Back

123   Q 305 Back

124   Q 306 Back

125   Q 382 Back

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© Parliamentary copyright 2013
Prepared 10 April 2013