Page 80 - bneMagazine March 2023 oil discount

80 Opinion
bne March 2023
And strike a deal they did. The acting minister returned to Kabul with an agreement on Uzbekistan electricity exports for Afghanistan. That was seen in some quarters as generous given that a year earlier, Uzbekistan resorted to stopping power exports to Afghanistan due to Kabul's inability to pay outstanding energy debts of around $70mn. Another $30mn in unpaid power bills was owed to Tajikistan.
Chronic dependence
Uzbekistan’s subsequent switching off of the deal in January in the face of ‘big freeze’ energy troubles at home means the agreement, ironically, has served to highlight the Taliban-led government's mismanagement of Afghanistan’s energy sector and the country’s chronic dependence on power imports.
In fact, not much seems to be going right for the fundamentalist militants. On February 1, Uzbekistan suspended rail transport to Afghanistan due to the Taliban administration’s failure to fulfil its obligations on technical maintenance works.
Amid the distressing difficulties caused by the energy shutdown, inhabitants of Afghanistan were receiving
only one hour of electricity every two days. "Even one
hour of electricity helped warm our home," Karima Rahimyar, a teacher in Kabul, told Radio Azadi, adding that most Afghans do not have the money to buy coal or wood for heating.
On January 25, Uzbekistan resumed some electricity exports to Afghanistan, while it was almost simultaneously announced that Turkmenistan has renewed an annual electricity supply agreement with the Taliban.
So things are looking up. But landlocked Afghanistan imports more than 70% of the electricity it needs from Uzbekistan, Tajikistan, Turkmenistan and Iran (in fact 73% of Afghan power supply is imported – 22% of that from Iran, 4% from Tajikistan, 17% from Turkmenistan, and 57% from Uzbekistan).
And the supply of surplus hydroelectric power from these countries is unreliable, to put it mildly. The outlook for Afghanistan’s future power supplies with such a high dependence on imports is all too precarious.
The chances of the Taliban's unrecognised and internationally isolated government – lately facing increasingly regular protests about the oppression it imposes on Afghan citizens
– righting the critical situation seem next to nil. Attracting the required donor funding and technical support even to complete existing hydroelectric projects in Afghanistan remains a steep uphill task for such an administration.
As for the billions of dollars of Afghanistan’s own central bank funds frozen by the US, there’s some good news in that Washington has established the Switzerland-based Afghan Fund, which is meant to help stabilise the Afghan economy by paying for imports like electricity – without benefiting the Taliban. But the only sure way out of the economic
hole for Afghanistan has to include the building of its own infrastructure.
The country may be sitting on estimated natural resources – including natural gas, copper and rare earths – worth more than $1 trillion and it can boast of one recent foreign investment breakthrough – on January 5, Kabul and Beijing signed a $540mn deal to develop an oil and gas field – but unless the Taliban start showing rather more realism in working with outside partners to address their failing state, Afghans won’t be feeling secure in the face of a forecast blizzard any time soon.
Fuad Shahbazov is an independent policy analyst focusing on regional security issues in the South Caucasus and a Chevening FCDO scholar at the University of Durham School of Government and International Affairs (SGIA). He tweets at @fuadshahbazov
Afghanistan's first wind farm in Panjshir Province (Credit: Daniel Wilkinson, US State Dept, public domain).
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