Can sustainable peace be established in Afghanistan?

Afghans are hopeful that a peace deal between the Taliban and the United States can bring them closer to the end of the country’s ongoing devastation for more than four decades. This protracted state of war has resulted in loss of countless lives, massive displacement of people, particularly women and children, and destruction of infrastructure systems in the country. Taking into account the price Afghans have paid and continue to pay, it seems they would eagerly welcome and accept any deal that can put an end to the ongoing war, but is that really the case and is it that simple too?

For many Afghans, peace is not simply the end of war between Taliban and the Afghan army, working in the shadow of US-led troops.

They want equal rights for all citizens as described in the constitution. They also want a governance system where institutions are capable of protecting their rights. While the broad contours of the US-Taliban deal suggests a phased withdrawal of US forces, they also want a commitment by Taliban to reject internal and external militant groups operating in their territory. Though, the negotiations have been going on for months, the details remain unknown.

Afghans want withdrawal of US troops to be complimented by efforts to address the concerns of women, children, minorities, internally displaced communities, and returnees. The agreement must also include provisions to ensure equal participation of all without discrimination based on ethnicity, gender, language, religion, political, economic and social affiliations.

Since direct talks between the US, led by Special Representative for Afghanistan Reconciliation Zalmay Khalilzad, and Taliban started in late 2018, a number of experts and political analysts—many of whom are not Afghans—have said they believe Taliban have changed or reformed. They say Taliban leaders in Doha have assured them that they recognize that today’s Afghanistan is not the same as in the late 1990s when they ruled the country. However, in the eyes and experience of millions of Afghans, the Taliban’s ideology remains very much unchanged. Is there anything that can be done to bridge the confidence deficit?

After 18 years of fighting Taliban and US administration appears ready for troop withdrawal. Yet, even as the US negotiates with Taliban, the group continues to engage in terrorism and kill civilians indiscriminately. The question is whether Taliban—at both the leadership and operational levels—have the capacity, competency, and willingness to put the public good before the group’s interests. Even if the US-Taliban deal and an eventual peace agreement brokered by intra-Afghan talks results in Taliban joining the country’s political system, terrorism will remain a challenge for the country.

Countering terrorism requires more than a military response. It requires integrated political, social, and economic strategies. Ultimately, Afghanistan can only tackle its terrorism challenge when it has achieved political stability, social equity and economic growth, all of which are interconnected. There is concern that withdrawal could lead to a sudden stop of humanitarian and development aid, which would be catastrophic. As the US and international coalition troops drawdown, the international community must remain engaged to help Afghanistan build a more peaceful, inclusive society. That is the only way to reduce the high levels of violence the country has experienced for decades.

Is the international community, particularly the US, willing to stand by Afghans after the withdrawal of troops? Many Afghans fear that after the signing of a peace deal between the US and Taliban, the US will abandon the country, leading to chaos and civil war much like after the withdrawal of Soviet troops some 30 years ago. An abandoned Afghanistan could be exploited by violent extremist groups around the world and bring Afghanistan right back to where it was in 2001.

Lackluster global currency markets

Investors do not seem keen in buying EUR because they are worried about the political situation in Italy, the possibility of a recession in Germany, the prospect of aggressive easing from the European Central Bank and the ongoing risk of more tariffs from the US on Chinese goods.  This week, Italy's Prime Minister Conte resigned, turning crisis into chaos for the Eurozone's third largest economy.  Of all the EUR troubles, Italian politics has the most limited impact on the currency.  Europe is no stranger to Italian political uncertainty (they just had elections in 2018 and who can forget Berlusconi's countless scandals) and this crisis was a long time coming. Instead of rising, Italian bond yields fell because investors are hoping that the new government will be more pro-business. Talks have already begun to form a majority in Parliament, which could hopefully pave the way for a smooth transition for Matteo Salvini, who is widely expected to become the new Prime Minister.  

Recession on the other hand is a serious risk for Germany. According to the Bundesbank, Germany's central bank, the country could very likely fall into a technical recession in the third quarter. Last week they predicted that GDP could continue to fall slightly. Growth has been weak for the past year as the country posted growth in only one out of the last four quarters. Unlike Italy, Germany is a serious problem for the Eurozone. As the region's largest economy, their slowdown will be felt across the continent. Although, it became evident last week that German and EZ PMIs rose in the month of August, the uptick in activity won't stop the European Central Bank from easing.  Industrial production is weak, investor sentiments are bearish and there's a good chance that the upcoming German IFO business confidence index will decline as well. Auto sales have taken a big hit and fears of further tariffs along with a disorderly Brexit are mounting.  Just this past week, the US lawmakers urged the Trade Representative's Office to hold off imposing new tariffs on European olive oil. In November, the Trump Administration will decide whether to impose duties on European autos.  With all of these risks in mind, the European Central Bank will have no choice but to ease next month and they could deliver a bigger than expected stimulus package.  This prospect will keep EUR/USD under pressure.   

Meanwhile the US Fed is really going out of its way to downplay the need for easing.  According to the FOMC minutes, most Fed officials saw the July rate cut as a mid-cycle adjustment and not the start of an aggressive easing program.  Since then comments from policymakers such as Mester, Rosengren, George, Daly and Harker suggest that they may not support another rate cut.  On Monday, Rosengren said the US is in a good spot right now and there is no need to take action if their outlook stays on track. He stressed that the Fed doesn't have to ease simply because other countries are weak. On Tuesday, Fed President Daly said she supported the July cut but sees the labor market as strong and consumer spending. Fed President George seems to agree - she said just this morning that she's not ready to provide more policy accommodation without seeing evidence of a slowdown. Like Rosengren, she described the economy as in a good place. Fed President Harker admitted that he reluctantly supported the July rate cut and felt that "we should stay here for a while, see how things play out."  So while President Trump wants the Fed to be proactive and has taken every opportunity this week to lay on the pressure, US policymakers don't seem to be onboard with the idea.  If that's true, it would be significantly misaligned with market expectations as Fed fund futures price in 100% chance of easing next month.  Now it is all up to Jerome Powell to clear the air. He is scheduled to talk on Friday and the tone of his speech could determine the direction for USD in the weeks ahead.

Israel’s presence in US coalition in Persian Gulf can further escalate tensions in the region

Israel’s recent interest in joining the United States self-proclaimed maritime coalition is expected to further escalate tensions in the Persian Gulf region.

Iranian Foreign Ministry Spokesman Seyyed Abbas Mousavi said the Islamic Republic considers possible Israeli presence in a US-led coalition in the Persian Gulf as a clear threat to its national security and reserves the right to counter it within the framework of the country's deterrence and defensive policy.

Earlier, Israeli foreign minister had said that the regime would be part of the US-led coalition to “protect the security of the Persian Gulf”. The minister claimed that Israel was determined to stop “Iranian entrenchment” in the Middle East region and strengthen Tel Aviv’s relationship with Persian Gulf countries.

Israel’s wish to join the coalition has multiple objectives which include:

1. Containing Iran; one of the main reasons behind the Israelis’ interest in joining the coalition is to seize the opportunity to make their wish come true to contain Iran in the Persian Gulf.

2. Accompanying the US in its anti-Iran policies to boost such hostilities.

3. Ensuring the Arab countries’ security under the US protective umbrella could have other objectives.

4. The Minister has expressed hope that his country may manage to sign agreements on complete normalization of ties with the Persian Gulf Arab states as the regime’s first step.

5. The possible presence of Europeans, including France and Germany in the coalition will be equal to the violation and complete death of the Iran nuclear deal.

6. The Israelis’ presence in the Persian Gulf will foment the tensions and add to the volatility of the region, and will be considered as an element threatening Iran’s security.

7. The presence of the mentioned coalition, just like any other trans-regional coalition, is basically against the United Nations Charter.

8. By joining the collation, the Israelis seek to divert the attention from its occupation, which is in fact the main reason behind the region’s conflicts.

9. Linking the Persian Gulf security to that of the Bab-el-Mandeb in line with the Saudis’ plans is aimed at curbing Iran’s regional policies and engaging other international players in the regional developments.

10. Establishing a coalition with the leadership of the United States basically means the provision of the grounds for triggering a war in the region.

11. Although the Arab front that had worried Ben-Gurion has been eliminated due to some Arab ruler’s parallel policies with the Israelis, the Resistance Front is still making the regime lose sleep.

12. Israelis presence in this coalition will be a clear declaration of war against the Islamic Republic.

"Regional states responsible for Persian Gulf security", says Iranian Foreign Minister

In a meeting with his Qatari counterpart Mohammed bin Abdulrahman bin Jassim Al Thani in Doha, Iranian Foreign Minister Mohammad Javad Zarif said that regional countries, and not foreign forces, are responsible for security in the Persian Gulf region.

“Foreign forces only cause insecurity in the region,” Zarif said as the United States called on European and Asian countries to join a Washington-led maritime force to secure safe shipping in the Strait of Hormuz which connects the Persian Gulf to the Sea of Oman. So far, only Britain and Israel have responded positively to the US call.

Zarif said, “Tehran attaches great importance to consultations on regional developments”. Qatari foreign minister highlighted the two countries’ role in protecting regional peace and called for expansion of cooperation in promoting dialogue to settle problems in the region.

Earlier, German Foreign Minister Heiko Maas said in a press conference on July 31 that his country “would not participate in the mission the United States plans to form.”

A German government spokeswoman also said on August 5 that Chancellor Angela Merkel and the whole German government do not see Germany taking part in a US-led naval mission in the Strait of Hormuz.

“The chancellor does not see a participation in a US-led mission in the current situation and at the current time - everyone in the German government agrees on that,” a government spokeswoman told a news conference, according to Reuters.

Madrid and Tokyo have also rejected an official request from Washington to participate in the naval coalition.

Spanish newspaper El Confidencial said on August 1, Madrid had received an official request from the United States to participate in these forces. However, the same sources said that “the Spanish government has currently no intention to participate in joint US-led forces,” Middle East Monitor reported.

Japan’s Mainichi Shimbun also reported that Tokyo won’t send ships to join the US-led maritime force.

Hossein Naqavi Hosseini, spokesman for the Majlis National Security and Foreign Policy Committee, said that the US coalition would only foment insecurity in the region.

In phone conversations last week, Iranian Defense Minister Amir Hatami discussed the security situation in the Persian Gulf region with Kuwaiti, Qatari and Omani defense ministers, warning about formation of military coalition in the Persian Gulf under the US leadership.

“Military coalition which the United States seeks to form under the pretext of the shipping security will just cause insecurity in the region,” said General Hatami.

He added, “We consider ourselves committed to maintain security in the region, especially in the Persian Gulf region. The Islamic Republic of Iran has spared no effort in maintaining security for navigation in the Persian Gulf, Strait of Hormuz and Sea of Oman. We believe that regional security must be maintained by the countries in the region.”

He noted that the regional countries should enter constructive talks in this respect. The defense chief blamed the US as the main culprit behind insecurity in the region. 

Pointing to Israel’s decision to join a US-led coalition in the Persian Gulf region, Hatami said, “Such probable action will be very provocative and can cause catastrophic consequences for the region.”

Mehran Kamrava, professor and director of the Center for International and Regional Studies at Georgetown University’s School of Foreign Service in Qatar, has predicted that US-led coalition to fail.

“This latest attempt, to create a new military coalition, appears to be part of yet another attempt by the United States — uncoordinated and without a long-term strategy — to maintain a military presence in the Persian Gulf and to share the costs of doing so. It does not appear to be heading for any meaningful success,” Kamrava told the Fars news agency in an interview published on August 12.