First Afghan Commercial Rail Network Operational

The Asian Development Bank’s efforts to finance and see to fruition a highway connecting northern Afghan cities Mazar-i-Sharif and Hairatan have been recognized by the US Department of Treasury for significantly improving transportation networks within Afghanistan. The rail line, though relatively short at just 75 km, will nonetheless greatly expand Afghanistan’s own transportation capabilities, and open the company’s markets to a much greater variety of European and Asian markets.

The country’s first commercial rail network will be complimented by a similar set of railways in the future, will significantly reduce transit times, transport costs and wait times near Hairatan, on the Uzbek border. Hairatan has long been a crucial transit point for Afghanistan, which receives about half of its imports and all of its humanitarian supplies through the gateway city. However, the fact that two different systems of transport were used on either side of the border made for long delays as goods were offloaded on one side and loaded again on the other.   With the new railway, however, this process has been eliminated.

A near to medium term goal for Afghan exporters is to take advantage of the country’s mineral deposits, a capability that the country has never effectively possessed. The country’s mineral deposits, which are chiefly comprised of copper, are valued at over one trillion USD, though development has been slow, in part because of the lack of adequate infrastructure and poor security. The state of security and the uncertainty of the political situation complicate future development projects, and make the country’s economic success dependent on the government’s ability to secure large-scale investments inside of Afghanistan.

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News Briefs:

  • 39 people were killed and 9 were injured on Sunday when a passenger plane taking off from Tehran crashed. The Sepahan Airlines Jet crashed in a residential neighborhood after its engines cut out shortly after takeoff. Initial reports said that all 48 on board died in the crash, but later reports confirmed the survival of 9. Iran’s airlines have had consistent problems with their aging fleets, as they are unable to replace them due to international sanctions on purchasing from major aircraft OEMs, which are mostly found in the West – Boeing (America), Airbus (Europe), Bombardier (Canada), and Embraer (Brazil).
  • Iran’s long-frozen $4.2 billion in frozen assets have been released as a result of the agreement reached last November in Geneva. This marks the eighth installment of frozen assets given since the deal took place. India and the Central Bank of the UAE officially made the transfer payment to the Central Bank of Iran on Saturday after it was approved by the P5+1 powers (the five members of the UNSC, plus Germany).
  • A small ray of hope appeared for Afghanistan’s future, as rival presidential candidates Abdullah Abdullah and Ashraf Ghani singed an agreement on Friday to form a national unity government, and to vow to work together regardless of who is declared president despite the ongoing audit of all eight million votes from the election on June 14. An earlier deal brokered by US Secretary of State John Kerry last month collapsed completely due to issues with implementation. The deal also stated that both sides agreed that Karzai’s successor should be inaugurated before the end of the month, a tall order in a vote count that appears to be creating more issues than solving them.
  • Putin has met with Azerbaijan President Ilham Aliyev and Armenian President Serzh Sargsyan in Sochi on Saturday to resolve and mediate the latest outbreak of fighting in the disputed Nagorno-Kabarbakh region. After the war over the region between the two countries from 1988 to 1994, there have been consistent episodes of violence between the two countries. Recently, the fighting has increased, with little chance for a dialogue between the two countries as neither recognizes the other and additionally, the fact that a  ceasefire was signed in 1994 but a peace settlement establishing strict delineating of Nagorno-Karabakh makes the situation even more difficult.

 

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