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CSISCENTER FOR STRATEGIC &

INTERNATIONAL STUDIES

project codirectors

Andrew C. Kuchins

Thomas M. Sanderson

authors

Andrew C. Kuchins

Thomas M. Sanderson

David A. Gordon

foreword

S. Frederick Starr

December 2009

The Northern Distribution Network

and the Modern Silk Road

Planning for Afghanistans Future

A Report of the CSIS Transnational Threats Project andthe Russia and Eurasia Program


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December 2009

The Northern Distribution Networkand the Modern Silk Road

Planning for Afghanistans Future

A Report of the CSIS Transnational Threats Project and

the Russia and Eurasia Program

project codirectors

Andrew C. Kuchins

Thomas M. Sanderson

authors

Andrew C. Kuchins

Thomas M. Sanderson

David A. Gordon

foreword

S. Frederick Starr


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ii

About CSIS

In an era o ever-changing global opportunities and challenges, the Center or Strategic and Inter-national Studies (CSIS) provides strategic insights and practical policy solutions to decisionmak-ers. CSIS conducts research and analysis and develops policy initiatives that look into the utureand anticipate change.

Founded by David M. Abshire and Admiral Arleigh Burke at the height o the Cold War, CSISwas dedicated to the simple but urgent goal o nding ways or America to survive as a nation andprosper as a people. Since 1962, CSIS has grown to become one o the worlds preeminent publicpolicy institutions.

oday, CSIS is a bipartisan, nonprot organization headquartered in Washington, D.C. Morethan 220 ull-time sta and a large network o aliated scholars ocus their expertise on deenseand security; on the worlds regions and the unique challenges inherent to them; and on the issuesthat know no boundary in an increasingly connected world.

Former U.S. senator Sam Nunn became chairman o the CSIS Board o rustees in 1999, andJohn J. Hamre has led CSIS as its president and chie executive ocer since 2000.

CSIS does not take specic policy positions; accordingly, all views expressed in this publica-tion should be understood to be solely those o the author(s).

Cover photo: Courtesy o the International Road ransport Union (IRU).

2009 by the Center or Strategic and International Studies. All rights reserved.

Center or Strategic and International Studies1800 K Street, N.W., Washington, D.C. 20006el: (202) 775-3119Fax: (202) 775-3199Web: www.csis.org


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| iii

contents

Foreword v

S. Frederick Starr

Acknowledgments vii

List of Abbreviations and Acronyms ix

Introduction 1

Part One: The Northern Distribution Network Overview 5Improving the Efciency and Impact of the NDN 12

The NDN and Counterinsurgency Strategy 17

Part Two: The NDN and the Modern Silk Road 18

Introduction 18

The Modern Silk Road 18

The Price of Ignoring the Modern Silk Road 20

The NDN and the MSR 21

The MSR and Counterinsurgency 22

Achieving the MSR 22

Policy Recommendations 29

Conclusion 31

About the Authors 33


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| v

Te authors o this report set out to assess the Northern Distribution Network (NDN), which the

U.S. military is establishing as an additional and alternative channel or provisioning U.S. orces in

Aghanistan. Tese new supply routes rom the Baltic and Black Seas through Central Asia have

provided an urgently needed supplement to the single route through Pakistan that had been used

exclusively since 2001. It was also hoped that the NDN would be less subject to the armed attacks,

unexpected delays, and pilerage that have hampered the movement o goods along that same

Karachi-Peshawar road.

For some years, Aghanistans northern neighbors have argued that they are well positionedto assist in the development o Aghanistan and also to benet rom that development. Until now,

they have had no means o acting on that claim. Tis report argues that the NDN oers the best

vehicle to date or organizing such engagement by Aghanistans neighbors. Te adjustments to the

NDN proposed here will build connections based on the genuine mutual interests o Aghanistan

and its neighbors, which will in turn ensure the longer-term security and viability o the northern

supply routes.

Although the recommendations oered here would alone more than justiy the eort involved

in preparing this report, the scope o the study goes urther or a very sound reason: even though

the NDN has been conceived and carried out to ulll a careully delineated military task, its exis-

tence opens the possibility o heretoore unimagined economic advances in Aghanistan, Pakistan,and all their neighbors. Tese new prospects arise rom the possibility o reopening the conti-

nental trade across the territory o Aghanistan and Pakistan that thrived over the millennia but

that has been dormant or a century, i not longer, thanks to the closed Soviet border, the unstable

Aghanistan-Pakistan border, and the negative impact o tensions between Pakistan and India. Te

report details these and other impediments that have long thwarted what could even now become

the key to Aghanistans economic sustainability and an engine o regional economic growth.

Drawing on work by the Asian Development Bank (ADB) and other national and international

aid agencies, the report points out that insecurity and poor inrastructure are not the causes o the

closure o regular and intensive regional trade but are, instead, its consequences.

One might think that to reopen these various borders to regional and continental trade would

be a monumental task, involving the solution to stubborn problems o security and inrastructure.But as the ADB showed a hal-decade ago, this is not the case. ruck drivers themselves do not

ear the security situation, especially when they are allowed to cross Aghanistan in great num-

bers. Tey know that the more the trac, the more local people will rush to provide services along

the road and hence gain an interest in keeping it ree o marauders. As or inrastructure, most o

the minimal inrastructure needed is already in place. It can be improved, o course, but that is

not a serious impediment. What does this leave? Only the urgent need to simpliy and speed the

processing o trucks at the borders and to prevent corrupt ocials and rent-seekers rom taking

advantage o the new openness. It is as simple as that.

forewordS. Frederick Starr


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vi | the northern distribution network and the modern silk road

Tis is precisely what the NDN promises to do, albeit or military supplies rather than or

purely civilian transit. But there is nothing preventing the more ecient and less corrupt border

regimens created by the NDN rom being transerred to the commercial transport sector. Te

third part o the report elaborates this heady prospect and suggests the many gains to be reaped

by pursuing it. O course, such changes will positively aect the Aghan economy, as well as those

o neighboring countries. But the passage o large numbers o civilian transport vehicles will also

advance security, since many people in the aected areas will take advantage o the new opportu-

nities or getting goods to market, as well as or providing services to the transport industry itsel.

As such commerce increases, people along the main corridors will come to view open transport as

a key to their own economic advancement.

It is no criticism to say these prospects were not in the minds o those who planned the NDN.

Tey had a more limited job to do, and they seem to have done it very well. But by so doing,

they have laid the essential groundwork or what could become a sustained and lucrative ow o

continental transport across Aghanistan and its neighboring states. Again, this will not happen

automatically. But i the United States can recognize this prospect and take the lead in achieving

it, it will have set in motion a positive and transormative orce in the economic and social lie o

Aghanistan and the entire region o Greater Central Asia.

Andrew Kuchins and Tomas Sanderson do not claim to have provided the last word on

this subject, but they have ramed the possibilities with clarity and precision. By so doing, they

challenge policymakers in Washington, Brussels, and a dozen regional capitals to step up to the

challenge.


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| vii

acknowledgments

Tis publication was made possible by a grant rom the Waring and Carmen Partridge Founda-

tion. Te CSIS Russia and Eurasia Program wishes to thank the Carnegie Corporation o New

York or its core project support. Overall support or the CSIS ransnational Treats Project is

provided by the Sarah Scaie Foundation.

We as authors o this report must acknowledge that this product was the result o a wide net-

work o contributors. First, we thank the members o our NDN Working Group who met several

times over the spring and summer o 2009 and helped shape and guide our thinking. Tis group

included Stephen Benson, Arnaud de Borchgrave, Anthony Cordesman, Evan Feigenbaum, Colo-nel James Jamison, Joseph Ferguson, Karin von Hippel, Daniel Kimmage, Elie Krakowski, Alexan-

dros Peterson, Eugene Rumer, S. Frederick Starr, and Mary Louise Vitelli. We also thank the more

than 50 U.S. and oreign government ocials who shared their understanding o and perspectives

on the NDN and the broader challenges the United States and its allies ace in Aghanistan. We

are grateul or the indispensable research and administrative assistance or this project rom Zack

Beauchamp, Amy Beavin, Vasily Dubnin, Ben Friedman, Emily Goldberg, Heidi Hoogerbeets,

Jane Kaminski, ravis Mills, Vladislav Prokopov, Josh Rittenberg, Debbie Stroman, and Gary rip-

macher.


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| ix

list of abbreviationsand acronyms

ADB Asian Development Bank

CENCOM U.S. Central Command

CIDA Canadian International Development Agency

CSIS Center or Strategic and International Studies

DFID Department or International Development

GDP gross domestic productIRU International Road ransport Union

ISAF International Security Assistance Force

MSR Modern Silk Road

NDN Northern Distribution Network

EUs 20-oot equivalent units

RANSCOM U.S. ransportation Command

USAID U.S. Agency or International Development


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introduction

In the rst hal o 2009, the United States established several new transit corridors or delivery o

nonlethal goods to its orces in Aghanistan. Te supply lines enter Aghanistans northern borders

rom Uzbekistan and ajikistan via routes that begin in Latvia and Georgia and cross through

Russia and Kazakhstan. Tese routes make use o a great deal o transit inrastructure (roads, rails,

and ports) built more than 20 years ago by the Soviet Union as the principal artery or its orces

during the war in Aghanistan in the 1980s. Alternative routes or supplying U.S. troops were

necessitated both by the increased U.S. orce presence and by the overreliance on existing routes

that start rom the Pakistani port o Karachi and enter Aghanistan through increasingly insecureterritory.

Collectively, these new routes have been termed the Northern Distribution Network (NDN).

Tis term suggests both a more commercial and a less military connotation as well as an open-

ended vision o a multiplicity o supply routes. Tis vision resembles the U.S. policy toward energy

pipelines in Eurasia since the early 1990s, captured by the phrase happiness is multiple pipelines.

Te logic is twoold: reliance on multiple transit corridors increases both the security and the le-

verage o the consumer, in this case, the U.S. military. Te key point is both to increase capacity o

throughput and to create more competitive market conditions that promote greater cost eciency

or the client and produce positive spillover in the surrounding region.

Indeed, i military logistics planners could undertake their work without political consider-ations, a new southwest route starting at the Iranian port o Chabahar would play a major role in

supplying the U.S. military eort, and the new NDN South route starting in Georgia would cross

ocially neutral urkmenistan. Part One o this report outlines the existing routes through Paki-

stan and the new routes that constitute the NDN.

Te establishment o the NDN has engaged a new set o states in cooperation on the Obama

administrations rst security priority, the stabilization o Aghanistan. Many have expressed con-

cern that the NDN makes the United States more vulnerable to certain states whose interests may

not be ully aligned with Washingtons in Aghanistan. Tis concern is genuine and justied, but

the critics o the viability o the new northern routes underestimate the vulnerability o reliance on

Pakistani routes as well as the value o engaging other states in the region in concrete cooperation

with economic and political benets. Te Center or Strategic and International Studies (CSIS) willpublish another report as part o our project on the Northern Distribution Network that outlines

the interests o states involved in the NDN as well as those that could potentially play transit roles.1

When we embarked on research or this project in the spring o 2009, we understood that the

NDN had the potential to alter to some extent the geopolitical interests o the United States in

1. See Andrew C. Kuchins and Tomas M. Sanderson, Te Northern Distribution Network and Aghani-stan: Geopolitical Challenges and Opportunities (Washington, D.C.: CSIS, orthcoming January 2010).


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2 | the northern distribution network and the modern silk road

Eurasia and the interests o those states bordering Aghanistan and the nearby region. But we did

not ully anticipate how our ndings on the NDN would provide a blueprint or illustration o the

essential importance o a broader regional strategy or Aghanistans stabilization and longer-term

growth based on the vision o its uture as a transit and trade hub akin to the ancient Silk Road o

millennia past. And like the way U.S. military planners view the new transit corridors that con-

stitute the NDN, the ancient Silk Road was also a multiplicity o roads and routes perhaps better

conceptualized as a network as well.

More than a century ago, the amous geopolitican Halord Mackinder argued that whoever

controls the Eurasian world island would control the world. Our analysis leads to a somewhat

dierent conclusion. Aghanistan is the missing link or the Modern Silk Road (MSR), a unied

Eurasian continental trade and transport system that would enhance the prosperity and security

or all involved. Part wo will draw the relationship between the establishment o the NDN and

this much wider vision o the uture o Aghanistan and Eurasia.

Lest we be accused o being wild-eyed dreamers, we understand that the principal task or

the United States is achieving a durable stabilization o Aghanistan to prevent its territory rom

being a sae haven or those seeking to attack us as al Qaeda did more than eight years ago. Te

core task or the U.S. military is to deeat the enemy. Te NDN was designed to serve that end rst

and oremost, not to build the MSR. But perhaps the most striking aspect o the many interviews

we conducted with U.S. government ocials or this project was their articulation o the role o

the NDN and their realization o its potential to serve the broader goals o the United States in

and beyond Aghanistan. In the consultations we conducted with oreign government ocials, we

ound that the importance o regional economic development catalyzed by acilitation o trade and

transport o licit goods was even greater rom their perspective.

Most important, the Aghans themselves share the vision that their uture prosperity is tied

to their reemergence as part o a Eurasian continental trading and transit network. Tis view was

highlighted in the publication o the Aghan National Development Strategy in 2008:

Aghanistan is a country with signicant potential or economic development. It has substan-

tial water, agricultural and mineral resources and is well positioned to become a trade and

business hub linking the markets o Central Asia, the Middle East, South Asia, and China. Te

potential exists or sustainable economic growth in the uture. Aghanistans commercial con-

nections to regional and global economies were severely disrupted and must be redeveloped.

Te development o a competitive private sector will depend on establishing access to oreign

markets and developing viable export activities.2

In light o President Barack Obamas ocus on counterinsurgency over counterterrorism or na-

tion building, it is important to identiy how the NDN and the MSR would help the United States

and its partners deeat the aliban insurgency. On the one hand, an enhanced NDN along the lines

we recommend in this report would directly strengthen counterinsurgency eorts. Te creation o

the MSR, on the other hand, would ensure that the gains o a successully executed counterinsur-

gency campaign were sustainable over the long term. o understand the distinction between these

two benets, we nd it instructive to review a passage rom the assessment o the war in Aghani-

2. Islamic Republic o Aghanistan,Aghanistan National Development Strategy, 13871391 (20082013), 4, http://www.ands.gov.a/ands/nal_ands/src/nal/Aghanistan%20National%20Development%20Strategy_eng.pd.


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kuchins, sanderson, and gordon | 3

stan by the commander o the International Security Assistance Force (ISAF), General Stanley

McChrystal:

ISAF has an important asymmetric advantage; it can aid the local economy, along with its

civilian counterparts, in ways that the insurgents cannot. Local development can change in-

centive structures and increase stability in communities. Economic opportunity, especially job

creation, is a critical part o reintegrating the oot-soldier into normal lie. Economic support to

counterinsurgency is distinct rom and cannot substitute or the longer-term development initia-

tives [emphasis added]. With some coordination it can lay the groundwork or, and comple-

ment, those longer-term eorts and show that the Aghan government is active at the local

level. ISAF must increase the exibility and responsiveness o unding programs to enable

commanders and their civilian partners to make immediate economic and quality o lie im-

provements in accordance with Aghan priorities.3

Te emphasized text draws a clear line between immediate economic support or counter-

insurgency, such as the Commanders Emergency Response Program, and longer-term develop-

ment initiatives like the Modern Silk Road. While long-term development projects certainly help

boost stability, they should not be conused with short-term eorts to increase counterinsurgentlegitimacy through nancial means. Despite this dichotomy, both would contribute to the broader

counterinsurgency agenda. In eect, it is best to view the NDN and the MSR as serving the same

objective at dierent points in time.

Coincidentally, the writing o this report has taken place at the same time as the Obama ad-

ministrations review o policy toward the war in Aghanistan. At this point, that review has been

completed and a new strategy has been unveiled. Even i the new approach successully reverses

aliban momentum and develops a viable Aghan security apparatus, these successes will ul-

timately ail i the United States does not pay more strategic attention at the highest level to the im-

portance o Aghanistans uture as a key hub in the MSR. o some extent, it is understandable that

the U.S. government believes that the other countries in the region (China, India, Iran, Pakistan,

etc.) that will benet most rom the MSR should take on the lions share o unding it; the United

States, however, may be best positioned as a neutral but enthusiastic supporter to catalyze what

would be a major multilateral eort or the region.

3. International Security Assistance Force, Commanders Initial Assessment, Washington Post, August30, 2009, http://media.washingtonpost.com/wp-srv/politics/documents/ Assessment_Redacted_092109.pd.


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| 5

part one: the northerndistribution

network overviewOn December 7, 2001, 300 U.S. Special Forces and 110 Central Intelligence Agency operatives,

working in tandem with local Aghans, seized the seat o the aliban regime in Kandahar.4 In the

intervening years, strategic neglect, ineective governance, corruption, and a cross-border sae ha-

ven in Pakistan, among other actors, have led to a resurgent aliban, prompting President Obama

to call the situation increasingly perilous in March 2009.5

Since the initial invasion, the number o troops in Aghanistan has increased steadily. As o

December 1, 2009, the United States had 33,000 troops in the country under Operation Endur-

ing Freedom;6 34,800 U.S. troops are also deployed to Aghanistan as part o the NAO-led ISAF,which has a total strength o 68,765 troops.7 In his December 1, 2009, speech, President Obama

announced the deployment o an additional 30,000 U.S. troops in the rst part o 2010.8 Figure 1

illustrates how U.S. orce levels in the country have grown and will grow over time.9

o sustain their orces in Aghanistan, the United States and ISAF must import a wide range o

matriel into the country. Logistical support in Aghanistan is a national tasking, with each mem-

ber o the coalition responsible or supplying its own armed orces.10

Te bulk o U.S. supplies bound or Aghanistan are routed through the Pakistani port o Ka-

rachi (see map 1). Tese shipments do not include any critical or sensitive material.11 Once in Ka-

rachi, 66 percent o this volume enters Aghanistan via the orkham Gate near the city o Pesha-

war.12 Te other 34 percent travels through the Chaman Gate in Baluchistan.13 Tese shipments are

4. Remarks by Hank Crumpton at CSIS, January 14, 2008.5. Oce o the Press Secretary, Te White House, Prepared Remarks o President Barack Obama: A

New Strategy or Aghanistan and Pakistan, March 27, 2009, http://www.whitehouse.gov/ the_ press_oce/remarks-by-the-president-on-a-new-strategy-or-aghanistan-and-pakistan/.

6. David Cutler, FACBOX-Breakdown o roop Numbers in Aghanistan, Reuters, December 1,2009, http://www.reuters.com/article/asiaCrisis/idUSGEE5B02DL.

7. Ibid.8. Oce o the Press Secretary, Te White House, Remarks by the President in Address to the Nation

on the Way Forward in Aghanistan and Pakistan, December 1, 2009, http://www.whitehouse.gov/the

-press-oce/remarks-president-address-nation-way-orward-aghanistan-and-pakistan.9. Amy Belasco, roop Levels in the Aghan and Iraq Wars FY2001FY2012: Cost and Other Potential

Issues, Congressional Research Service, July 2, 2009, http://p.as.org/sgp/crs/natsec/R40682.pd.10. Te United States does provide logistical assistance to smaller coalition partners as well as the A-

ghan National Army and the Aghan National Policy. CSIS interview with U.S. Central Command(CENCOM), MacDill Air Force Base, ampa, Florida, May 20, 2009.

11. Sensitive items include night-vision devices, communications equipment, ammunition, and weap-ons. Ibid.

12. Ibid.13. Ibid.


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handled entirely by commercial carriers and require no U.S. military presence.14

In 2008, around28,000 20-oot equivalent units (EUs) traveled along these routes beore reaching Aghanistan.15

As the aliban insurgency in Pakistan intensied, these critical supply lines have come under

increasing harassment. Baitullah Mehsud, or example, the late leader o the ehrik-e-aliban

Pakistan, directly threatened this logistical pipeline, pledging that convoys would not be allowed

to reach American and NAO units in Aghanistan.16 While Mehsud was unable to achieve this

objective, militants orced the Pakistani government to stop Aghan-bound supply convoys seven

times between September 2008 and March 2009.17 In addition, Pakistani ghters mounted attacks

14. PowerPoint presentation rom the U.S. ransportation Command, October 2, 2009.15. Te Organization or Economic Cooperation and Development denes a EU as the standard unit

or counting containers o various capacities and or describing the capacities o container ships or termi-nals. One 20 oot [International Organization or Standardization] container equals 1 EU. Organizationor Economic Cooperation and Development, Glossary o Statistical erms, June 19, 2002, http://stats.oecd.org/glossary/detail.asp?ID=4313. Tus, 28,000 EUs represent the volume o cargo that would t in28,000 20-oot ISO shipping containers. Te 28,000 gure comes rom the CSIS interview with CENCOM.

16. Dieter Bednarz, Allies Struggle to Find Saer Supply Routes, Spiegel Online, February 17, 2009,http://www.spiegel.de/international/world/0,1518,608137,00.html.

17. Bill Roggio, aliban Attack NAO Supply Lines in Northwest Pakistan, Long War Journal, March28, 2009, http://www.longwarjournal.org/archives/2009/03/taliban_attack_nato_2.php.

Figure 1. Actual and Projected Number of U.S. Troops in Afghanistan

Source: Brian Montopoli, Chart: Troop Levels in Aghanistan over the Years, CBS News, December 1, 2009, http://www.

cbsnews.com/blogs/2009/12/01/politics/politicalhotsheet/entry5855314.shtml?tag=content Main;content Body;

White House, Remarks by the President in Address to the Nation on the Way Forward in Aghanistan and Pakistan.

0

10

20

30

40

50

60

70

80

90

100

(in

thousands)


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against trucking terminals, destroying more than 450 vehicles and containers in over a dozen at-

tacks in Peshawar in the same period.18

Pilerage along the Pakistani route is another challenge U.S. logisticians ace. At one point, piler-

age in Pakistan reached 1 percent.19 While small, this gure still amounted to $16 million worth o U.S.

government property. Trough a series o measures, the U.S. military subsequently reduced pilerage

to 0.5 percent, which is less than what is lost at the civilian reight acility in Bayonne, New Jersey.20

While disruptive, the material lost rom insurgent attacks and pilerage was a raction o what

the United States successully transported rom Pakistan to Aghanistan. In March 2009, General

Duncan J. McNabb, commander o the U.S. ransportation Command (RANSCOM), stated that

about 130140 shipments reach Aghanistan [via Pakistan] each day.21 At the time, orce levels in

Aghanistan required only 78 containers per day. Tus, the attrition along the Pakistani supply line

was not severe enough to hamper the overall war eort.22

18. Javed Aziz Khan, Militants orch 12 NAO Supply Containers in Peshawar, News International,March 29, 2009, http://www.thenews.com.pk/daily_detail.asp?id=169688.

19. CSIS interview with CENCOM.20. Ibid.21. Walter Pincus, General Urges Condence in Ability to Supply roops in Aghanistan, Washington

Post, March 22, 2009.22. Ibid.

Map 1. Route of U.S. Supplies from Karachi, Pakistan, to Afghanistan

Source:Google Earth mapping service.


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A lack o projected surplus capacity along the Pakistani routes in conjunction with ongoing

insurgent attacks, pilerage, trucking strikes, and growing ears o other scenarios led deense plan-

ners to search or new ways to resupply their orces. One option was to increase shipments via air.

According to General McNabb, I we had to do everything by air, you would see a Berlin airli.23

Tis option would have been extremely expensive. Estimates by NAO place the cost o airliing

supplies to Aghanistan at $14,000 per ton, or $7 per pound.24 Te act that U.S. airli is already

being contracted out to Russian and Ukrainian companies such as Volga-Dnepr demonstrates that

the United States does not have sucient airli capacity to make this option viable.

Given the growing insecurity o the Pakistani supply routes and the exorbitant costs associ-

ated with a Berlin airli to Aghanistan, the Unites States sought to create new ground lines o

communicationmilitary parlance or supply routesinto the theater. Ultimately, the United

States opted or a route that connected Baltic and Black Sea ports with Aghanistan. Tis arrange-

ment is an outgrowth o NAOs Lines o Communication Project, which sought agreements rom

Russia, Kazakhstan, Uzbekistan, and urkmenistan to allow nonlethal cargo bound or Aghani-

stan to traverse their territory by train.25

U.S. planners rst started working seriously on this option in the summer o 2008.26 By Sep-

tember, the U.S. Central Command (CENCOM) had approved the Northern Ground Line o

Communication campaign plan.27 In October, the campaign plan was renamed the Northern Dis-

tribution Network.28 Tis change reected a decision to demilitarize the character o the project

and rely exclusively on commercial carriers transporting nonlethal goods.

With a plan in hand, U.S. ocials had to convince transit states to allow nonmilitary supplies

to traverse their territory. Te United States had already secured permission to transport nonle-

thal supplies via Russia at the NAO-Russia summit in April 2008. It had similar permission rom

Georgia under an agreement signed by NAO and bilisi in March 2005.29 Te rst new state to

approve nonlethal transit through its territory was Kazakhstan, which agreed in February 2009.30

Later that month, Rear Admiral Mark Harnitchek o RANSCOM announced on ajik state

television that ajikistan had agreed to allow nonmilitary goods bound or Aghanistan to transitits road and rail network.31 During a three-day meeting in Baku that ended on March 11, 2009,

Azerbaijan made it clear that it would agree to the use o Baku or both the transit and export o

goods to the ISAF mission in Aghanistan.32 In April 2009, Uzbekistan ollowed suit and agreed to

23. Ibid.24. NAO: Making Progress on Aghanistan Rail Route, Eurasianet.org, May, 5, 2008.25. Kulpash Konyrova, Air NAO or Aghanistan May Give Way to Rail NAO, New Europe, April

21, 2008, http://www.neurope.eu/articles/85705.php.26. CSIS interview with CENCOM.

27. PowerPoint presentation rom U.S. ransportation Command (RANSCOM), October 2, 2009.28. Ibid.29. NAO, NAO and Georgia Sign ransit Agreement, March 6, 2009, http://www.nato.int/docu/

pr/2005/p05-026e.htm.30. PowerPoint presentation, RANSCOM.31. Roman Kozhevnikov, ajikistan Allows NAO Cargo ransit to Aghanistan, Reuters, February

20, 2009, http://www.reuters.com/article/newsMaps/idUSRE51J1DE20090220.32. amerlan Vahabov, NAO Supply Routes through the South Caucasus, Eurasia Daily Monitor 6,

no. (168, September 15, 2009, http://www.jamestown.org/single/?no_cache=1&tx_ttnews%5Btt_news%5D=35493&tx_ttnews%5BbackPid%5D=7&cHash=8d51a03094168.


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nonlethal transit.33 Kyrgyzstan was the nal state to sign a nonlethal ground transport agreement,

which it did in the summer o 2009.34

What began as an idea in the middle o 2008 has since evolved into a robust transit network.

oday, the NDN involves three spurs. Tese are known as NDN North, NDN South, and KK.

NDN North begins at the Latvian port o Riga. From there, it uses existing Soviet-era rail lines

to traverse Russia, Kazakhstan, and Uzbekistan. Once in Uzbekistan, cargo enters Aghanistan at

ermez (see map 2).

NDN South transits the Caucasus and completely bypasses Russia. Tis route originates in the

Georgian port o Poti on the Black Sea and crosses Azerbaijan beore arriving in Baku (see map 3).

From there, goods are loaded onto erries or their journey across the Caspian Sea. Tese supplies

33. PowerPoint presentation, U.S. ransportation Command.34. Interview with senior Department o Deense ocial, Pentagon, Arlington, Virginia, December 3, 2009.

Map 2. The Northern Spur of the Northern Distribution Network, from Riga, Latvia, toAfghanistan

Source: Google Earth mapping service.


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make landall at Kazakhstans west coast port o Aktau and then proceed to Uzbekistan beore en-

tering Aghanistan. I and when the United States secures a transit agreement rom urkmenistan,

the port o urkmenbashi could be an additional destination or goods leaving Baku by erry.

Te KK route includes Kazakhstan, Kyrgyzstan, and ajikistan. KK provides a backup to

the Uzbek border crossing at ermez (see map 4). According to RANSCOM, this route has some

bad stretches o road in ajikistan that limit throughput.35

As the NDN took shape, it received a good deal o attention in the press. Unortunately, some

o this reporting was misinormed. Contrary to many articles, the Manas acility in Kyrgyzstan

is not part o the NDN.36 No cargo travels through Manas, and the acility is used exclusively as a

personnel and air-reueling hub.37 Te NDN is a multiroute logistical network that transports non-

military supplies using commercial providers and existing inrastructure. With the exception o

the Uzbek air cargo hub at Navoie and the Caspian Sea erries, the NDN relies on road and rail.38

35. PowerPoint, RANSCOM.36. Phone interview with RANSCOM and CENCOM, October 2, 2009.37. Ibid.38. Ibid.

Map 3. The Southern Spur of the Northern Distribution Network, from Poti, Georgia,to Afghanistan



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Map 4. The KKT Spur of the Northern Distribution Network across Kazakhstan,Kyrgyzstan, and Tajikistan to Afghanistan


From a purely logistical standpoint, the NDN is a resounding achievement, both in its genesis

and in its continued viability and eectiveness. Close interagency cooperation among CENCOM,

RANSCOM, the Deense Logistics Agency, the Oce o the Secretary o Deense, and the State De-

partment, and othersthough not perectwas sucient to make the NDN an operational success.

As a result, 300 EUs are currently transiting the NDN per week, although at a cost o 250 percent

more per EU than supplies moving along the Pakistani line.39 Te number o EUs could easily

be expanded to 500 per week, i needed.40 As o November 2009, the NDN had brought 4,500 EUs

into Aghanistan.41 Tis gure represents 12.5 percent o the total number o EUs shipped through

Pakistan in 2008 and is additive to the supplies currently entering Aghanistan rom Pakistan.

39. Phone interview with RANSCOM and CENCOM; interview with a senior Department oDeense ocial, Pentagon, Arlington, Virginia, December 3, 2009.

40. Ibid.41. PowerPoint, RANSCOM.


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Improving the Efciency and Impact of the NDNTe U.S. ocials responsible or the NDN deserve a great deal o credit. Te network provides the

United States with signicant additional throughput capacity to Aghanistan, ends Washingtons

complete logistical reliance on Pakistan, and presents new opportunities or U.S. engagement in

Latvia, Russia, the Caucasus, and Central Asia. Tese benets are signicant.

Despite the NDNs early success, military and civilian planners should not become compla-

cent. Te network remains subject to a range o geopolitical dangers and logistical ineciencies.

With adequate attention and eective policies, however, the United States could bolster the NDNs

resiliency and improve its eectiveness by implementing several specic measures:

expanding local procurement

using the NDN to push or streamlined customs procedures

developing Gwadar as an additional supply route

strengthening NDN South

recognizing that disputes within Central Asia could prove as great a threat to the NDN as dis-

putes between transit countries and Washington

striving or maximum transparency

drawing up contingency plans

Expanding Local Procurement

I the U.S. government could successully navigate the challenges associated with increasing the

local procurement o supplies or Aghanistan, it would strengthen the NDN in two important

ways. First and oremost, it would generate goodwill among NDN participants, giving them a

greater stake in the NDNs continued operation. Second, enhanced local procurement would getmore goods to Aghanistan with ewer transport assets and shorter delivery times. aken together,

these advantages would make the NDN less vulnerable to political risks and increase the quantity

o goods it can deliver to the theater.

Trough the U.S. A1P or Aghan First Policy, some progress has been made. According to the

U.S. ambassador to Aghanistan, Karl Eikenberry, the U.S. Agency or International Development

(USAID) procured goods and services worth more than $280 million rom Aghan companies

last year, contributing more than two percent o total Aghan economic output, and employing

more than 20,000 Aghans in the process.42

More than hal the current USAID contracts in Aghanistan are run by Aghan contractors, a

major example being the Strategic Provincial Roads program in which all construction subcontract-ing or 1,500 kilometers o roads is done by Aghan companies.43 Moreover, according to Ambassa-

dor Eikenberry, the U.S. military also has increased its procurement o Aghan goods and services,

42. Embassy o the United States, Kabul, Ambassadors Remarks at the Aghan First Event, November11, 2009, http://kabul.usembassy.gov/speech_111109.html/.

43. U.S. Agency or International Development, Strategic Provincial Roads (SPR), http://aghanistan.usaid.gov/en/Activity.106.aspx.


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[awarding] about $1 billion in contracts (more than eight percent o total Aghan economic output)

to local Aghan rms, most o which build and service U.S. military acilities. 44

Such a policy is an eective component o counterinsurgency doctrine. Economic develop-

ment draws more o the population into legitimate economic activity and in turn incentivizes

citizens to thwart insurgent eorts to undermine the economyand thus the legitimacyo the

Aghan government. Tis broader link between local procurement and counterinsurgency is ur-ther explained in the section on the NDN and counterinsurgency strategy (page 17).

Finding local Aghan suppliers has been eased with the creation o a Web site by the Peace

Dividend rust. Te trust works with USAID and aid agencies rom Canada (the Canadian

International Development Agency, or CIDA) and the United Kingdom (Department or Inter-

national Development, or DFID)45 through an online resource that allows international buyers

and Aghan suppliers to post and receive tender notices, research the Aghan economy, [and] nd

local companies.46 Tis eort is acilitated through its sophisticated Aghan Marketplace program

designed to create jobs and inspire long-term economic growth in Aghanistan.47 And while

the Peace Dividend rust has created this online resource or Aghanistan (as well as or Haiti

and imor-Leste), the United States should consider working with its Central Asian partners to

replicate the Web site to the extent possible, given that these nations are already included in the

broadened Aghan First Policy.48

o that end, the Deense Logistics Agency and the General Services Administration have

established a virtual storeront in ermez, Uzbekistan, that aggregates local goods beore moving

them south to Aghanistan.49 In addition, the Oce o the U.S. rade Representative is in the early

stages o working with USAID and other U.S. government agencies to ensure that procurement o-

cials in the Pentagon, looking to meet their many requirements, know about their agency-specic

programs in Central Asia. Overall progress on local procurement, however, has been slowgo-

ing because o rigid Department o Deense procurement policies. As part o its eort to source

items, the contractor must be able to document that the supplier or source is positioned or

success. Positioned or success requires contractors to meet a number o criteria: (1) they mustbe capable o shipping or delivering a substantial portion o the anticipated monthly volume at a

reasonable price; (2) they must meet an acceptable quality standard; (3) they must be nancially

capable o perorming; and (4) they must not pose unreasonable risk.50

Rather than orcing a substantial and dicult change in Department o Deense procurement

policies, the U.S. government should encourage small-scale local producers to pool their resourc-

es, enabling them to meet the militarys needs and standards. In the long term, the best solution to

44. Embassy o the United States, Kabul, Ambassadors Remarks.45. CIDA is the Canadian International Development Agency, and DFID is the United Kingdom De-

partment or International Development.

46. Te Peace Dividend rust Web site can be accessed at http://aghanistan.buildingmarkets.org/en_a/about-building-markets.

47. Ibid.48. Countries eligible to provide support to U.S. orces are reerred to as Area Support Countries and

include Aghanistan, Uzbekistan, Kazakhstan, ajikistan, Kyrgyzstan, urkmenistan, Azerbaijan, Georgia,Armenia, and Pakistan. General Services Administration, Federal Acquisition Service, Solicitation/Con-tract Order or Commercial Items (Section 2. Denitions).

49. Phone interview with RANSCOM and CENCOM, October 2, 2009.50. General Services Administration, Federal Acquisition Service, Solicitation/Contract Order or

Commercial Items (Section 4. Requirements).


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this problem may come rom the private sector. With the proper encouragement and acilitation,

the U.S. government can help commercial entities capitalize on this potentially lucrative opportu-

nity and assist decentralized local suppliers in tapping into the militarys sizable demand.

While benecial in principle, the expansion o local procurement must be handled with the

utmost care or local realities and sensibilities. Aid projects and policies designed to acilitate the

creation o viable, local co-ops should be ormulated, but with the realization that corruptionand state intererence in private enterprise is unavoidable and has to be managed to the greatest

extent possible. In addition, past experiences in Aghanistan have shown that even the most well

intentioned development projects have sometimes ailed to win hearts and minds. In act, these

initiatives have at times been counterproductive. Andrew Wilder, research director at the Feinstein

International Center at us University, learned this lesson, when he led a team that interviewed

hundreds o people in Aghanistan about the impact o aid projects in the country.

Wilders research ound several signicant shortcomings with Western-unded aid projects:

For example, [Wilders team] heard many reports o the aliban being paid by donor-unded

contractors to provide security (or not to create insecurity), especially or their road-building

projects.51 Another problem they uncovered was the practice o ipping contracts, whereby a

company wins a contract and then sells it to another company minus a 10 percent cut.52 Some-

times these contracts are sold as many as our or ve times, leaving the nal buyer with insucient

unds to execute the contract properly.53 Finally, Wilder ound that in an ethnically and tribally

divided society like Aghanistan, aid can also easily generate jealousy and ill will by inadvertently

helping to consolidate the power o some tribes or actions at the expense o othersoen push-

ing rival groups into the arms o the aliban.54

Despite these challenges, expanded local procurement in NDN transit states would positively

aect other U.S. priorities in the region. By increasing the demand or locally purchased items, the

United States would extend the benets o the NDN to the agricultural and manuacturing sec-

tors o participating states, giving them a welcome source o revenue. In addition, local procure-

ment would mean that more regionally produced goods would nd their way to Aghanistan andthereby enhance economic integration between Aghanistan and its neighbors and possibly expose

business owners to other, nonmilitary economic opportunities in Aghanistan.

Bolstering local procurement would signal the transit states that the United States is receptive to

their interests, laying the groundwork or urther cooperation. It would also create new stakehold-

ers in Aghanistans stabilization. As neighboring states begin to recognize the economic potential o

Aghanistan and develop commercial interests there, new constituencies will have a vested interest in

ensuring that Aghanistan is not at war. o the extent that regional governments cooperate with and

promote their private sectors, any new economic activity would have a positive eect.

As with most o the policies outlined in this report, any earnest eort to increase local pro-

curement would most certainly require closer interagency cooperation in the United States. Te

51. Andrew Wilder, A Weapons System Based on Wishul Tinking, Boston Globe,September 16, 2009, http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/09/16/a_weapons_system_based_on_wishul_thinking/.

52. Renee Montagne, Aid Money May Not Be Accomplishing Its Goal, National Public Radio, Novem-ber 4, 2009, http://www.npr.org/templates/story/story.php?storyId=120080815.

53. Ibid.54. Wilder, A Weapons System Based on Wishul Tinking.


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Department o Deense, the Department o State (including USAID), the Department o Com-

merce, and the U.S. rade Representative could each contribute to expanded procurement. For

such a complex undertaking to be successul, however, this issue needs to receive sustained and

serious attention rom the most senior levels o government. Despite the diculties, this is an op-

portunity that should not be lost.

Using the NDN to Push for Streamlined Customs Procedures

Onerous bureaucratic requirements and rampant corruption are long-standing obstacles to the

growth o regional cross-border trade. Te NDN provides an opportunity to identiy and imple-

ment simpler and aster ways o moving goods saely rom one country to another. Stakeholders

should avoid the temptation to arrange exceptional expedited procedures or the NDN and instead

make it a mechanism or spearheading customs reorm through the gradual introduction and

eventual expansion o best practices.

Developing Gwadar as an Additional Supply Route

Now that the U.S. government has embraced General McChrystal's recommendation to secure thecity o Kandahar, it is worth asking, o what end? Tere are several good reasons. First, Kanda-

har is the largest Pashtun city in Aghanistan and the ormer capital o the aliban government.

Second, it is the second-largest city on the Aghan ring toad (Kabul is the largest) and hence

must be secured and opened to easy commercial trac i the domestic market is ever to revive. A

third reason encompasses these two and is even more important or the success o the NAO mis-

sion and to the uture o Aghanistan and the entire region: Kandahar is the key road connection

between the new Pakistani port o Gwadar and Aghanistan and, beyond that, all Central Asia,

Europe, and much o the Middle East.

Pakistan began the development o Gwadar with aid rom China and has now engaged Singa-

pore or the second phase o work. I the link to Kandahar were reopened, Gwadar would cut thetransport time rom Europe to Pakistan, India, and Southeast Asia substantially. Iran, with help

rom Russia and India, is developing a competing port at Chabahar, but it is not as well situated as

Gwadar or the continental trade that is already beginning to emerge.

On Gwadar, the interests o the United States, Aghanistan, and Pakistan are aligned. It is past

time to seize this opportunity and open Kandahar to long-distance truck trac. Gwadar will give

Aghans their best hope o generating legal income through long-distance trade, and it gives Cen-

tral Asians a southern alternative to shipping everything to market through distant Russia. With

Kandahar now in its eye, the United States should plan to build on uture success there by making

the opening to Gwadar a high priority.

Te principal drawback at this point is the lack o a good highway between Gwadar and

Kandahar. Pentagon ocials estimate the cost o upgrading this connection at about $1 billion and

have made it clear that this money is not available rom the Department o Deense.55 China and

Singapore were the principal external unders or phases I and II o the Gwadar port. Perhaps they

and other South Asian and East Asian countries that stand to benet the most rom this connec-

tion should lead the unding o the highway project.

55. Interview with senior Department o Deense ocial.


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Strengthening NDN South

Strengthening NDN South has important political and strategic benets. One, the viability o this

route adds capacity and reduces dependence on Russia in the new northern transit corridors and

strengthens key U.S. partners in the Caspian, Georgia and Azerbaijan. Tese political and strategic

considerations clearly compensate or the higher cost o the NDN South route. Every eort should

be made to use this opportunity to improve transport inrastructure in these two countries toenhance their longer-term economic viability as a transit hub.

One actor contributing to the higher costs o NDN South is urkmenistans reusal so ar to

agree on ground transport o nonlethal goods. Tis reusal orces NDN South to ollow a more cir-

cuitous route rom the Caspian up through Kazakhstan beore coming back south to Uzbekistan.

Te United States should continue eorts to secure permission or nonlethal, overland transport

through urkmenistan. Such a development would provide a third point o entry into northern

Aghanistan (Uzbekistan and ajikistan being the rst two). Access to urkmenistan would also

allow erries rom Baku to ofoad in the port o urkmenbashi, providing an alternative to the

Kazakh ports on the eastern shore o the Caspian Sea.

While urkmenistan agreed to allow Aghan-bound humanitarian goods to traverse its aircorridor in February 2009, Ashkhabads ocial policy o neutrality has thus ar prevented the

overland shipment o nonlethal supplies.56 Despite this policy, the United States should persist. As

regional cooperation on the NDN expands, there is a chance that urkmenistan will recognize the

value o participation. I the United States could provide direct benets to the urkmen govern-

ment in exchange or its acquiescence, the likelihood o such a breakthrough would increase.57

Recognizing the Threat of Disputes within Central Asia

Disputes over water use, payment or natural gas and electricity, militant incursions, the status o

ethnic minorities, and espionage have marred relations among countries in the region. Border clo-

sures are the all-too-requent result. Inasmuch as these disputes could threaten NDN shipments,the United States should monitor relations among NDN states with particular attention to incipi-

ent conicts and, where appropriate, work quietly to acilitate a rapid resolution.

Striving for Maximum Transparency

Financial arrangements in Central Asia are notoriously opaque, and local residents (correctly)

perceive oreign acquiescence to traditional ways o doing business as a orm o tacit approval.

ransparency on the costs associated with the NDN, perhaps under the aegis o the Special In-

spector General or Aghanistan Reconstruction, would mark a welcome departure rom standard

practice in the region and enhance U.S. credibility on issues o scal reorm and good gover-

nance. o help create this climate o transparency, the United States could encourage media andother watchdog groups to report on problems and demand online publications in local languages

outlining what each NDN state is doing.

56. Turkmenistan to Open Airspace for U.S. supplies to Afghanistan,RIA Novosti, February 25,2009, http://en.rian.ru/world/20090225/120303895.html.

57. Te U.S. government must recognize that the incentives required to gain Ashkhabads approvalor overland transport agreements would likely benet only the regime and not extend to the citizens ourkmenistan.


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Drawing up Contingency Plans

Pakistan-based militants have already threatened to hit the NDN, and they may succeed i they

try hard enough. Militants could also target U.S. or European assets in Kazakhstan, Kyrgyzstan,

ajikistan, or Uzbekistan. NDN stakeholders, including regional governments, should discuss

potential attack scenarios beorehand and develop common strategies or coordinating communi-

cations and altering security procedures should an attack, or attacks, take place.

The NDN and Counterinsurgency StrategyAccording to FM 3-24, the U.S. Army and Marine Corps Counterinsurgency Field Manual,

Logistic activities are an integral part o COIN [counterinsurgency] operations. Tese activi-

ties take the traditional orm o support to combat and security orces as well as the uncon-

ventional orm o providing mixes o essential and timely support to many Host Nation (HN)

security and stability-enhancing activities that may seem purely civil in character.58

Te NDN is no exception. Te network oers an important supply line or the U.S. military and,with expanded local procurement, could provide economic opportunities or many Aghans. In

addition, i the NDN successully stimulates other cross-border commercial activity between

Aghanistan and its neighbors, even more jobs will be generated. By creating these opportunities,

an enhanced NDN would give the civilian population a personal stake in ensuring its success and

protecting it rom insurgent activity.

Te potential o the NDN to contribute to the counterinsurgency mission should not be

discounted. U.S. military logisticians can urther develop the NDN to help achieve all the eco-

nomic development objectives outlined in FM 3-24, which include mobilizing and developing

local economic activity, initiating contracts with local businesses to stimulate trade, rebuilding

commercial inrastructure, supporting broad-based economic opportunity, and promoting a ree

market economy.59 As the counterinsurgency manual states, I there is a nal paradox in coun-

terinsurgency, it is that logistic postures and practices are a major part o the eort and may well

determine the operations success.60 We could not agree more.

58. Counterinsurgency, Field Manual 3-24, Marine Corps Warghting Publication no. 3-33.5 (Washing-ton, D.C.: Department o the Army and Department o the Navy, December 2006), 8-20.

59. Ibid., gure 5-2, p. 5-5.60. Ibid., 8-20.


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18 |

IntroductionWhile the creation o the NDN was motivated by the U.S. militarys immediate logistical needs, its

establishment nonetheless oers a unique opportunity or Washington to urther broader strategic

objectives. Tis opening will not last orever. With prompt attention, adequate coordination, and

the correct set o policies, the U.S. government could leverage the NDN to lay a oundation or the

so-called Modern Silk Road. Tis development would help stabilize Aghanistan in the long term

and have a transormative eect on Eurasia.Te United States must be pragmatic. It is not at war in Aghanistan to develop the MSR but to

deprive al Qaeda o its sanctuary. Domestic and international commitment to the war in Aghani-

stan is already agging. o suggest that now is the time to embark on an Aghan Marshall Plan

ignores political reality. It is time, however, to think about the strategic importance o a diversied

Eurasian trade and transportation network and eature it more prominently in U.S. policy. Key

regional players are thinking about how to advance their own interests in those terms. Te United

States and its European allies should be similarly ocused.

Some may understandably argue thatgiven the massive costs incurred by the United States

in leading the military eort to bring stability to Aghanistanthose who are likely to benet more

rom improved trade and transit inrastructure linking Aghanistan to global markets should take

leadership in investments. Tis view, however, neglects the collective goods and coordination aspects

o the challenge. Each o the major regional players to benet rom the MSRincluding China, In-

dia, Iran, Pakistan, and Russia, or startershas more specic interests and competitive inclinations

that obstruct implementation o a broader regional eort that would benet all. Te United States

may not see the same magnitude o long-term economic benets or itsel that those in the region do,

but it is our view that such investments will be most eective in ensuring that the Obama adminis-

trations ocus on securing stability and promoting the local economy has a longer-term impact.

The Modern Silk Road

Nobody has articulated the vision o the MSR as well as Proessor S. Frederick Starr o the CentralAsia-Caucasus Institute at Johns Hopkins University. In his oreword to a book on this subject

released in 2007, a then improving Aghanistanin conjunction with the removal o Cold War

borders and Chinas decision to open its western rontier to tradelaid the oundation or a trans-

continental trading network spanning the entire Eurasian land mass.

part two: the ndn andthe modern silk road


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Reminiscent o the ancient Silk Road, which connected Europe and Asia, the MSR could gen-

erate tremendous incomes among both trading and transit states. Proessor Starr oers the ollow-

ing rough indicators o the scale and value o such commerce:61

An overland route running rom Lianyungang, China, to Rotterdam via Xinjiang and Central

Asia would reduce the time it takes to transport goods rom China to Europe rom 2040 days

to 11 days and lower costs rom $167 to $111 per ton.

I basic improvements were to be made to the transport inrastructure connecting Central Asia

to Aghanistan, the Asian Development Bank (ADB) predicts overall trade would increase by

up to $12 billion, a growth o 80 percent.

A separate estimate by the ADB ound that the completion o new roads would boost total

trade among Aghanistans neighbors by 160 percent and increase the transit trade through

Aghanistan by 113 percent. Te study also ound that these roads would raise Aghanistans

exports by 14 percent or $5.8 billion and increase imports by 16 percent or $6.7 billion.

A United Nations study estimated that GDP would grow by 50 percent across Central Asia

within a decade i those states cooperate with one another on ostering trade.Intercontinental trade is projected to increase GDP growth in Aghanistan by 8.812.7 percent

and 23 percent in Xinjiang.

Te creation o the MSR would also benet oil, gas, and electricity producers in Central Asia

by undermining Russias export monopoly and providing access to eager new markets in China,

India, and Pakistan. While the development o nonenergy trading does not directly correlate with

growth in the energy sector, the two are related. For instance, as the level o nonenergy commer-

cial activity between Central Asia and Aghanistan grew, these states have engaged in dialogue that

appears to be building new levels o trust and commercial interest in cross-border energy initia-

tives. Several promising developments include:

Te Central Asia South Asia power supply project. Kyrgyzstan and ajikistan have ocially agreed to act as suppliers or this project, Aghanistan has signed up as a purchaser and transit

country, and Pakistan has agreed to be the primary purchaser. While considerable transaction

details still need to be worked out, a secretariat is now in place in Kabul with each countrys

representatives in regular attendance.

Te urkmenistan-Aghanistan-Pakistan-India natural gas pipeline. Deliberations over this pipe-

line have been going on or decades and are rivaled by the Iranian Pakistan-India natural gas

pipeline discussion. Both projects are multibillion dollar investments with considerable politi-

cal dimensions. Experts suggest that both projects will be essential, and the only real debate is

one o sequencing.

Fuel procurement. Virtually all Aghanistans petroleum products are imported rom CentralAsia, Iran, Pakistan, and Russia, using existing roads and inrastructure. Storage acilities are

in place, and the Aghanistan State Enterprise or Liquid Fuels oversees these imports. Tat

enterprise is undergoing restructuring and divestiture.

61. S. Frederick, Starr, ed., Te New Silk Roads: ransport and rade in Greater Central Asia (Washing-ton, D.C.: John Hopkins University School or Advanced International Studies, 2007), 79.


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Cross-border power. At present, Aghanistan must import at least 33 percent o its power supply,

which comes rom Iran, ajikistan, urkmenistan, and Uzbekistan. In August 2009, ajikistan

ormalized a power purchase agreement with Aghanistan, which stipulated that beginning in

May 2010 ajikistan will supply 100300MW (megawatts) during the summer months until

2013, at which time that supply will be provided year-round. Tis agreement is very signicant

or Aghanistan, which has less than 1000MW installed capacity.62

Te development o the MSR would have second- and third-order benets that extend be-

yond the economic realm. As Fred Starr writes, Te prospect o transorming Aghanistan and

the entire region o which it is the heart, into a zone o secure sovereignties and viable market

economies . . . can roll back the orces that give rise to extremism and enhance continental

security.63 In short, the MSR could promote security, prosperity, and connectivity within some o

the most volatile, impoverished, and isolated nations on the planet.

The Price of Ignoring the Modern Silk Road

Te United States must ask itsel whether it can achieve its long-term goals in Aghanistan withoutinvesting in the MSR. Tis question has not received adequate attention because o the Obama ad-

ministrations understandable preoccupation with the worsening security situation in the country.

While deliberations about the long term are pointless unless short-term challenges can be over-

come, both sets o problems must be addressed simultaneously.

Te bottom line is simple. According to the Agency Coordinating Body or Aghan Relie,

International assistance constitutes around 90% o all public expenditures in Aghanistan.64

For the stabilization o Aghanistan to be achievable and sustainable in the long term, the

country must develop its licit economy. While much o the current debate has ocused on how

to protect the civilian population, proessionalize the Aghan National Security Forces, and cre-

ate a unctional and legitimate Aghan government, these eorts will ultimately ail without a

sustainable, indigenous revenue stream.

Te obvious question is how best to oster such economic growth. While no policy oers guar-

anteed success, developing the MSR to enhance economic integration between Aghanistan and

its near and distant neighbors is the most promising option. As the Aghan National Development

Strategy points out, Aghanistan cannot develop without access to regional and international

markets.65 Conversely, an isolated Aghanistan prevents the deeper integration o Eurasia, cleav-

ing markets that could otherwise be linked.

Te signicance o enhanced integration is not lost on the Obama administration. In his

remarks beore the Senate Foreign Relations Committee, the assistant secretary o state or South

and Central Asian aairs, Ambassador Robert Blake, stated the administrations view:

62. We are indebted to Mary Louise Vittelli or this list.63. S. Frederick, Starr,A Greater Central Asia Partnership or Aghanistan and Its Neighbors (Washing-

ton, D.C.: John Hopkins University School or Advanced International Studies, 2005), 5.64. Matt Waldman, Falling Short: Aid Eectiveness in Aghanistan, Agency Coordinating Body or

Aghan Relie, March 2008, 4, http://www.acbar.org/ACBAR%20Publications/ACBAR%20Aid%20Eectiveness%20(25%20Mar%2008).pd.

65. Islamic Republic o Aghanistan, ransport and Civil Aviation Strategy 13871391(2007/08-2012/13), February 2008, p. 17, http://www.ands.gov.a/ands/nal_ands/src/nal/sector_strategies/ransport%20Sector%20Strategy%20-%20English.pd.


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Currently, South and Central Asia is one o the least economically integrated regions in the

world. Integration is vital to help create vibrant economies in Aghanistan, Pakistan and the

broader region, and should be accelerated. New opportunities or cross border trade, trans-

portation, inrastructure development, and energy links can provide new jobs and enhance

the quality o lie or all people in South and Central Asia.66

The NDN and the MSRDespite being created to serve logistical ends, the NDN is bringing about a de acto step toward

the MSR. Te U.S. government should embrace this positive externality and strive to deepen A-

ghanistans connections to regional and global markets.

By linking Aghanistan with Europe, the Caucasus, and Central Asia through commercial

carriers, existing inrastructure, and multiple routes, the NDN is proo that the embattled country

is currently accessible. Unortunately, the ourishing export trade o Aghan-grown opiates to

Asia, Central Asia, Europe, Iran, and Russia also serves as proo o transit potential. At the same

time, the NDN is creating additional demand or transcontinental transport services, bolstering

the logistical links between Aghanistan, NDN ports o origin, and NDN transit states. Trough

this demand, the U.S. military is helping create and sustain transcontinental transport capacity

that could one day service the MSR and become the engine or Aghanistans economic growth as

prioritized in the 2008 Aghan National Development Strategy.

Te NDNs success is an armation that new inrastructure projects are not prerequisites or

enhancing Aghanistans economic integration. While urther development would certainly help,

the act that 4,500 EUs have been delivered to Aghanistan via the NDN since February 2009 illus-

trates that goods can reach the country through commercial carriers along existing inrastructure.67

Tese deliveries do not represent even the ull throughput capacity o these routes.

RANSCOM reports that it sees no inrastructure constraints in using the NDN to ship hal its

nonlethal ground shipments to Aghanistan in 2010.68 Te ADB also recognized the existence o

surplus capacity within the Central Asian portion o the NDN, noting that aer the dramatic all

in trac on the regional networks in the 1990s, there is undoubtedly abundant spare capacity on

virtually the entire [road and rail] transport network.69 Te NDN is a striking reminder that tran-

sit corridors connecting Aghanistan with Europe, the Caucasus, and Central Asia are ar more

easible than many realize.

In addition to showing what is possible with regard to transcontinental transport, the NDN is

creating a demand or such services. Tis demand provides transcontinental transport rms with

a new source o revenue, deepens their experience, and also provides opportunities or carriers to

pursue additional ventures. I Aghanistan is to move toward uller integration with regional and

global markets, private sector companies that possess the capacity and experience to move goodseciently across Eurasia will become increasingly important.

66. Remarks or the Record by Ambassador Robert O. Blake, Nominee or Assistant Secretary o Stateor South and Central Asian Aairs beore the Senate Foreign Relations Committee, May 14, 2009, http://oreign.senate.gov/testimony/2009/Blakeestimony090514a.pd.

67. Figure rom senior Department o Deense ocial, November 2009.68. Phone interview with RANSCOM and CENCOM, October 2, 2009.69. Asian Development Bank, Connecting Central Asia: A Roadmap or Regional Cooperation, 2006, 3,

http://www.adb.org/Documents/Books/Connecting-Central-Asia-Road-Map/connecting-CA-roadmap.pd.


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While the NDN is stimulating transcontinental trade, its impact should not be overstated.

Whereas the NDN moved 4,500 EUs between February and November o 2009, 34,300 EUs

passed between Kazakhstan and Uzbekistan by rail alone in 2007.70 Tus, the volume o material

shipped via the NDN is a raction o the overall commercial trac in the region

The MSR and CounterinsurgencyUnlike an enhanced NDN, which would contribute to the near-term counterinsurgency mission

in relatively direct and measurable ways, the implementation o the MSR would provide indirect

counterinsurgency benets that would be vast in scope and much more dicult to measure. Ac-

curately understanding how the MSR will intersect with the counterinsurgency mission is also

complicated by the amount o time it would take or the MSR to evolve.

Despite this analytic complexity, there should be no doubt that the MSR will contribute to the

counterinsurgency campaign in real and signicant ways. Whatever the state o the aliban insur-

gency at the time the MSR becomes operational, the realization o such intercontinental trade will

bring unprecedented levels o economic opportunity to South and Central Asia, create widespread

alternatives to insurgency, and help stabilize the region. Te MSR will also help ensure that any

counterinsurgent gains made in Aghanistan will not be reversed over the long term. Without such

measures, there is no guarantee that the sacrices made in Aghanistan today will have any more

lasting an impact than those made by the Soviet 40th Army in the 1980s.

Te development o the MSR will indirectly urther the counterinsurgency mission in one

nal way. Te U.S. strategy in Aghanistan is to draw down coalition troop numbers as host na-

tion security orces become able to secure their country.71 While current plans seek to expand and

develop the Aghan National Security Forces to enable this transition, it remains unclear how the

Aghan government will underwrite these orces in the uture. As Anthony Cordesman points out,

Te inability o the Aghan government to und its armed orces is only one area in which A-

ghanistan will remain utterly dependent upon outside powers or the oreseeable uture.72 As wehave argued, the MSR would provide the Aghan government with an important source o revenue

that could be used to help maintain its security orces and lessen this dependency. Since President

Obamas ultimate goal is to turn Aghan security over to the Aghans, the long-term nancial ele-

ment o the equation must be considered.

Achieving the MSRAs we have shown, the MSR represents the best hope or the long-term stabilization o Aghani-

stan, and the NDN oers a unique opportunity to lay the oundation o the MSR. Te remainder

o this report will discuss the challenges o developing the MSR and specic recommendations on

how these diculties can be overcome.

70. UN Economic and Social Commission or Asia and the Pacic, Preliminary Findings o the rans-port Corridor Study in North-East and Central Asia and Proposals or the Way Forward, March 45, 2009,6, http://www.unescap.org/ttdw/common/IS/CorridorStudy/EGM_les/3-ESCAP_Key_Findings.pd.

71. President Obama stated in his December 1, 2009, speech that building Aghan capacity would allowor a responsible transition o [U.S.] orces out o Aghanistan. Oce o the Press Secretary, Te White House.

72. Anthony Cordesman, Winning in Aghanistan: Creating Eective Aghan Security Forces (Washing-ton, D.C.: CSIS, 2009), 50.


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Beore doing so, however, we will address some key misconceptions about the MSR. Aghani-

stans current economic isolation and the ailure o the MSR to develop are oen attributed to a

lack o security and inadequate inrastructure. Tis analysis is awed.

An Infrastructure Challenge?

With some notable exceptions, transportation inrastructure in several signicant portions o Eur-

asia is underdeveloped. Tis inrastructure decit is acute in Aghanistan and between Aghani-

stan and its neighbors. Tat said, these conditions are not responsible or the lack o commercial

activity in undeveloped parts o Eurasia, and adequate inrastructure does in act exist to support

increased levels o trade in these locations.

Map 5 shows the Eurasian rail network and illustrates Aghanistans isolation. Note how all

rail links end at the Aghan border. Given that the overwhelming volume o trade in Central Asia

is handled by rail, the lack o such inrastructure inside Aghanistan is signicant.73 While donors

73. Eighty-nine percent o Central Asias exports and 81 percent o its imports are handled by rail.World Bank, Inter-regional rade and ransport Facilitation in Europe and Central Asia South Asia Regionand East and Pacic Region, 2005.

Map 5. The Rail Network in Eurasia

Source: United Nations Economic and Social Commission or Asia and the Pacifc, 2009, http://www.unescap.org/

ttdw/common/TIS/TAR/images/tarmap_latest.jpg.


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such as the ADB are beginning to address this decit through projects like the recently approved

rail line connecting ermez with Mazar-e-Shari, the present reality is nonetheless apparent.

Tis situation is a symptom o broader regional underdevelopment. Te extent o this short-

coming is vividly illustrated in the so-called modern activity gap concept ormulated by Steven

Benson (see map 6).74 Te basis o this concept is a graphic consisting o a series o black dots

on a blank sheet o paper, with each dot representing overhead satellite intercepts o all types o

telecommunications taken in a 24-hour period in the late 1990s.75 Tey orm a amiliar picture,

as many o the intercepts all in the worlds littorals, making the Southern Hemispheres conti-

nents clearly visible. In the Northern Hemisphere, however, the saturation o these intercepts is so

dense that there are no clear continental images. Te blank swath delineated by the dotted lines

represents the only underdeveloped portion in the Northern Hemisphere and is reerred to as the

modern activity gap. It lies roughly between the eastern Black Sea region and the eastern provinces

o China and is centered on Aghanistan and Central Asia.

Despite the inrastructure shortcomings in Aghanistan and the surrounding countries that

underlie the modern activity gap, this actor is not the largest impediment to intercontinentaltrade. According to the International Road ransport Union (IRU), or example, Te road net-

74. For more on this concept, see Stephen Benson, Te MAGAIConstruct and the Northern Distribu-tion Network (Washington, D.C.: CSIS, November 2009), http://csis.org/les/publication/091110_Benson_MAGAI_Web.pd.

75. While the Modern Activity Gap has been lled to a certain extent in the decade since this imagewas generatedthanks to developments like the rapid expansion o cellular telephone use in Aghanistanit remains an accurate metaphor or the region.

Map 6. Satellite Intercepts of the Worlds Telecommunications in a 24-Hour Period fromthe Late 1990s

Source: Stephen Benson, The MAGAI Construct and the Northern Distribution Network(Washington, D.C.: CSIS,

November 2009), 4, http://csis.org/fles/publication/091110_Benson_MAGAI_Web.pd.


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work in transit countries [to Aghanistan] has sucient reserves o capacity to allow or the mass

expansion o cargo shipments.76 As the success o the NDN suggests, the current inrastructure in

the region does in act provide unctional and adequate conduits through which current commer-

cial volumes can reach Aghanistan.

Tis is not to suggest that existing inrastructure is capable o supporting the increased levels

o economic activity necessary to close the modern activity gap. Te reorientation o regionaltrade patterns away rom Russia has already exposed bottlenecks that may require new or renovat-

ed inrastructure in the short term.77 In the long term, primary and ancillary inrastructure78 must

also be upgraded to support the unprecedented surge in economic activity created by the MSR.

In the near term, however, existing inrastructure oers a sucient oundation on which to begin

building the MSR.

A Security Challenge?

Tere is no doubt that sustained insecurity in Aghanistan, Baluchistan, Kashmir, and other parts

o Eurasia retards economic activity and dissuades private and public investment that could help

create the MSR. As the scope and intensity o the aliban insurgency expand, this inhibiting actoris growing more acute.

Ongoing trade between Aghanistan and Pakistan despite the aliban insurgency is proo that

commerce can exist in an insecure environment: in act, 20.1 percent o Aghanistans exports go

to Pakistan, passing through the epicenter o violence.79 An additional 21.1 percent o Aghan

exports end up in India, presumably passing through the same terrain,80 while 8.6 percent o Paki-

stans exports were imported by Aghanistan, crossing the same border.81 Tese gures suggest that

security is not a prerequisite or trade.

While some argue that economic development can begin only aer the cessation o hostilities,

this pattern o reconstructionthough relevant in the aermath o the preceding centurys great

warsseems inadequate or todays asymmetric conicts. Instead, security in todays small warsis driven in large part by the economy, not just by military orce.82

In Aghanistan, or instance, 40 percent o the population is unemployed, and 53 percent live

below the poverty line.83 Tese conditions directly aect the insurgency. By some estimates, as

76. International Road ransport Union, Recommendations Prepared by IRU or the First Session o theWorking Party on Aghan ransit, October 2009, 4.

77. Asian Development Bank, Connecting Central Asia: A Roadmap or Regional Cooperation, 2006, 3,http://www.adb.org/Documents/Books/Connecting-Central-Asia-Road-Map/connecting-CA-roadmap.pd.

78. Ancillary inrastructure includes truck parking areas, service stations, driver rest, and other acili-ties that support road transport. See International Road ransport Union, IRU NELI Final Report, 2009,

35 and 54.79. CIA World Factbook,Aghanistan, https://www.cia.gov/library/publications/the-world-actbook/

geos/a.html.80. Ibid.81. CIA World Factbook, Pakistan, https://www.cia.gov/library/publications/the-world-actbook/geos/

pk.html.82. It is important to note that the economy also drives insecurity. Insurgents and other warring parties

have historically ought or control o valuable resources or land. An example o this can be seen in SierraLeone, where the illicit diamond trade ueled a brutal conict.

83. CIA World Factbook,Aghanistan.


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many as 70 percent o the aliban are unemployed young men just looking or a way to make a

living.84 While this gure may be debatable, there is clearly a connection between insurgency and

deprivation in the region.

Karin von Hippel provides ample evidence o this relationship in an article about the link

between poverty and terrorism. As she argues, Te ordinary volunteer or recruit in Pakistan and

Aghanistan has typically been poor. 85 o support this argument, von Hippel cited three compel-ling sources. First was a report by Daniel Markey, which ound that in Pakistan, aliban recruits

are drawn rom Aghan reugee camps and the network o extremist madrassas in the tribal

areas. aliban oot soldiers tend to be uneducated, poor Pashtuns with ew other employment

prospects.86 Second was a study by the UN Assistance Mission or Aghanistan, which stated that

in the absence o employment opportunities, young men join militant groups as a way to earn a

living and enhance their social status.87 Finally, von Hippel cited Peter Bergen, who learned that

the aliban ghters were paid about $300 a month or, our times the wage o the average Aghan

police ocer.88

Te relationship between poverty and extremism in South Asia reinorces the idea that eco-

nomic development must be carried out alongside military operations as a vital component o an

eective counterinsurgency campaign and a key ingredient or long-term stability. Te attachment

to President Obamas December 2009 speech on Aghanistan recognizes this relationship, stating

that growth is critical to undermine extremists appeal in the short-term and or sustainable eco-

nomic development in the long term.89 Tus, security is not so much a prerequisite or the MSR as

it as a benet o its implementation.

The Real Challenges

I a lack o adequate inrastructure and insecurity are not preventing the emergence o the MSR,

what exactly is? Among others, the ollowing actors help explain why the MSR remains elusive:

its low priority

inecient bureaucratic practices

lack o coordination among donors and governments

corruption

geopolitical schisms

84. Fetrat Zerak, Te Occasional aleban, Institute or War & Peace Reporting, April 23, 2009, http://www.iwpr.net/?p=arr&s=&o=351992&apc_state=henh.

85. Karin von Hippel, Te Role o Poverty in Radicalization and errorism, in Debating errorism and

Counterterrorism: Conicting Perspectives on Causes, Contexts, and Responses, ed. Stuart Gottlieb (Washing-ton, D.C.: CQ Press, 2009), 60.

86. Daniel Markey, Securing Pakistans ribal Belt, CFR 36 (New York: Council on Foreign Relations,July 2008), 11, as cited in von Hippel, Te Role o Poverty in Radicalization and errorism.

87. UN Assistance Mission, Suicide Attacks in Aghanistan (20012007), 84, as cited in von Hippel,Te Role o Poverty in Radicalization and errorism.

88. Peter Bergen, Aghan Spring, New Republic, June 18, 2007, as cited in Karin von Hippel, Te Roleo Poverty in Radicalization and errorism.

89. Oce o the Press Secretary, Te White House, Fact Sheet: Te Way Forward in Aghanistan, De-cember 1, 2009, http://www.whitehouse.gov/the-press-oce/way-orward-aghanistan.


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Low Priority

Te MSR is receiving too little attention rom the Obama administration compared to other,

more immediate challenges in the region. By ocusing so intensely on the conduct o the war in

Aghanistan and neglecting long-term economic development, Washington is setting itsel up or

ailure. Even while the administration has identied agricultural development as a priority, with-

out thinking about how those goods will reach domestic and international markets, the strategy isincomplete. As stated earlier, a long-term strategy is indeed irrelevant unless short-term crises can

be addressed. At the same time, short-term gains are equally meaningless without a viable long-

term strategy.

Inefcient Bureaucratic Practices

Troughout our consultations or this project, our interlocutors unanimously identied inecient

bureaucratic practices as the biggest obstacle to