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Afghanistan, Turkmenistan Forge $200 Million Trade Agreements to Strengthen Economic Ties

By Aygerim Sarymbetova May 11, 2024

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Afghanistan and Turkmenistan signed over 10 contracts during the three-day trip of a Turkmen business delegation to Herat province, on May 7, 2024. / Business Turkmenistan

The Afghan and Turkmen companies have signed 10 contracts and two memorandums of understanding within the framework of plans to expand trade and economic ties.

The agreements, worth over $200 million, pertain to the construction sector and include the supply of rebar, paints, marble, and food materials, according to Business Turkmenistan.

The contracts were signed during the trip of the Turkmen business delegation led by the Chairman of the Union of Industrialists and Entrepreneurs of Turkmenistan, Nokerguly Ataguliev, to western Herat province, in the presence of Nooruddin Azizi, Acting Minister of Industry and Commerce of Afghanistan, on May 7.

“There is an excellent opportunity for the expansion of trade and economic relations between Afghanistan and Turkmenistan, which both sides should take full advantage of,” Azizi said at the signing ceremony of these contracts.

The contracts were signed as a follow-up to the visit of the acting minister to Turkmenistan and a meeting with its national leader, Gurbanguly Berdimuhamedow.

Earlier, the delegation from Turkmenistan’s private sector expressed their intentions to “expand economic relations between the private sectors of the two countries,” saying that they hope to buy hundreds of tons of construction materials from Afghan industrialists every year.

During its three-day visit to the province, the Turkmen delegation also visited Afghan factories, including marble processing plants in Herat, and met with the governor of Herat province, Noor Ahmad Islamjar.

Previously, the Taliban Ministry of Industry and Commerce had also announced the establishment of a large joint logistics center in the Afghan Torghundi city and a trilateral transit agreement between Turkmenistan, Afghanistan, and Kazakhstan. In related developments, the Chamber of Commerce and Industry of Uzbekistan signed export contracts worth $44 million with Afghan traders on April 30.

Turkmenistan is set to become a transportation hub for international corridors passing through Kazakhstan, primarily the North-South and the Middle corridors, as well as the Lapis Lazuli Corridor (Türkiye-Georgia-Azerbaijan-Turkmenistan-Afghanistan).

Following a meeting between representatives of Afghanistan, Turkmenistan, and Kazakhstan in the Afghan capital in late April, the Taliban agreed to build a logistics hub in western Afghanistan aimed at making the war-torn nation a major logistics point for regional exports, including oil from Russia to South Asia. While the initial capacity of the hub is set at one million tons of oil, its operational date remains unspecified.

According to Nooruddin Azizi, the Taliban acting commerce minister, technical teams would draw up a written agreement within two months on the formal plans for the hub, which all three countries would invest in after six months of talks.

“Based on our discussions, a logistics center is going to be established in Herat province, which can connect the north to South Asia,” Azizi said.

He further added that the Taliban were eyeing the millions of tons of oil they expected Russia would be selling in coming years to South Asian countries, particularly Pakistan, to pass through the new hub.

According to Azizi, the Taliban were also speaking with Chinese authorities on building a road through the remote, narrow Wakhan corridor that connects Afghanistan with China and that they hoped Afghanistan would eventually develop into a route for trade between China and Iran.

Kazakhstan’s trade ministry told Reuters that it wanted to develop roads and a railway through Afghanistan to connect with South Asia and the Gulf, with the hub serving as an important logistics point.

The Kazakh government forecasts that the volume of exported goods to Afghanistan will increase by 40% in the coming years, and the transport of goods will rise three times by 2030.

These agreements come as Afghanistan faces severe economic challenges and rising unemployment over the past two and a half years under Taliban governance. As foreign aid to Afghanistan falls and the predominantly agricultural economy is marred by persistent drought, its officially unrecognized Taliban government has faced questions over how to fund development and avoid economic stagnation.