The Taliban’s recent agreement with China and Pakistan to extend the Belt and Road Initiative to Afghanistan has the potential to draw billions of dollars in funding for infrastructure projects in the country. The Chinese and Pakistani foreign ministers met in Islamabad and pledged to work together on Afghanistan’s reconstruction process, including taking the China-Pakistan Economic Corridor (CPEC) to the Taliban-ruled nation.
The cash-strapped Taliban government has expressed readiness to participate in the project and welcomes the prospect of much-needed infrastructure investment. The Taliban have also expressed hopes for China to invest in Afghanistan’s rich resources, estimated to be worth $1 trillion.
Chinese businesses have been wary of investing in Afghanistan due to attacks by the Islamic State group and the presence of the East Turkistan Islamic Movement, a separatist group based in Xinjiang. In December, the Islamic State group took credit for an attack on a Kabul hotel popular with Chinese diplomats and businessmen.
However, the Taliban see investments as a way to fix their cash-strapped economy after international aid, accounting for 60% of public spending, was halted following the chaotic withdrawal of US troops in 2021. The Taliban require $4.6 billion this year to help more than two-thirds of the country’s 40 million population who are living in extreme poverty, according to a UN agency. A 2022 Gallup poll showed that nine in ten Afghans find it “difficult” or “very difficult” to survive on their present income.
The Chinese and Pakistani ministers stressed the need to unfreeze Afghanistan’s overseas financial assets. The Taliban has been blocked from accessing about $9 billion of Afghanistan’s central bank reserves held overseas on concerns that the funds will be used for terror activities. Washington later agreed to release half of it to bolster the economy but put it on hold after the Taliban imposed certain school and work restrictions on Afghan women last year. China, Russia, and Iran are among a handful of countries that maintain warm ties with the Taliban and have provided aid in the tens of millions of dollars but have stopped short of formally recognizing the government.
Amir Khan Muttaqi, the Taliban’s top diplomat, traveled to Islamabad to meet his Chinese and Pakistani counterparts and reached an agreement to extend the Belt and Road Initiative to Afghanistan. Muttaqi’s second visit to Pakistan comes days after the United Nations stressed the need to engage with the Taliban rulers as Afghanistan is facing the “largest” humanitarian crisis in the world.
