Ioannis Koskinas: The U.S.-Afghan game of “Chicken”

Cultural Intelligence, Peace Intelligence
Ioannis Koskinas
Ioannis Koskinas

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The U.S.-Afghan game of “Chicken”

Ioannis Koskinas

Foreign Policy, 1 August 2013

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Click on Image to Enlarge

The game of “Chicken” typically involves two drivers, with cars on a converging course, daring one another to either swerve out of the way or risk a head-on collision.  Ideally, one driver swerves and the other wins.  The danger, of course, is that both drivers will believe that the other will swerve first and they will end up colliding.  In this worst-case scenario, the size of the vehicle and its capacity to absorb the impact are key.

In an Afghan context, the U.S. and Afghan governments are on a collision course in a number of areas and unless cooler heads can prevail, the eventual crash will be devastating, yet totally uneven.  For the United States, its international credibility will be undoubtedly damaged; but for the Afghan government, the fallout will be disastrous, and signal the beginning of the end for this period of relative progress and prosperity.  Two prime examples of the stakes are the Bilateral Security Agreement (BSA), which will determine the size and shape of the U.S. mission post 2014, and the tussle over taxing U.S. government contractors supporting military operations in Afghanistan.

Following the ill-choreographed opening of the Taliban political office in Qatar, Afghan President Hamid Karzai put the BSA on pause.  Even though U.S. officials were quick to admit that the Doha event was embarrassing and not what they had intended, they also made it clear that they had acted with Karzai’s blessing.  That really should have been the end of it and the negotiations should have resumed.

Karzai’s decision to halt the BSA talks was yet another attempt to challenge the United States when Afghan sovereignty was on the line.  But with the negotiations still stalled, his move may prove to be a pyrrhic victory.  One of the unintended consequences of his decision is that a “zero option” (keeping no U.S. forces in Afghanistan after 2014), which had little support in Washington and in NATO-member capitals, is now being considered in earnest.

As far as the U.S. government is concerned, the BSA is the sine qua non for a continued U.S. military presence past 2014.  In fact, the Chairman of the Joint Chiefs of Staff recently set an October 2013 deadline for completing the BSA in an effort to force the issue with an Afghan government that is struggling to define its own vision of a post-2014 security environment.

Without the BSA, however, even those who warn against the “zero option” have been adamant that total withdrawal is not only likely, but also inevitable.  In other words, unless the BSA is finalized quickly, the idea of leaving no U.S. troops in Afghanistan after 2014 will continue to gain momentum, and what started out as a dangerous possibility may become the most likely course of action.

Another ‘collision course’ issue is the taxation of contractors supporting U.S. military operations in Afghanistan. Admittedly, the U.S. government is partially responsible for this mess.  The tax exemption rules for companies supporting U.S. government contracts, for example, were established through an exchange of diplomatic notes, leaving room for interpretation.  Up to now, the U.S. and Afghan governments have not made the necessary amendments to limit ambiguity in contentious sections of the tax code.  And now the Afghan government has implemented policies that the U.S. government considers unnecessary and undeserved predatory behavior.

In May 2013, the Special Inspector General for Afghanistan Reconstruction (SIGAR) presented an audit report to Congress that identified “nearly $1 billion in business taxes and penalties imposed by the Afghan government on contractors supporting U.S. operations.”  According to the report, the additional fees and penalties imposed on contractors will not only adversely effect military operations, but will cost the U.S. government hundreds of additional millions of dollars.

To complicate matters further, around the same time, the Afghan government stopped NATO convoys from crossing out of the country for about a week. According to a Washington Post report about the issue, “Afghan officials said they took the drastic measure to compel the United States to pay fines for failing to present properly processed customs forms for the thousands of containers that are exiting the country, mostly through the Pakistani border.”

The idea of a seemingly petty customs fight forcing the U.S. military to ship more supplies by air, an expensive alternative, does not sit well with Congressional leaders who are already pushing for massive cuts in defense spending.  Influential senators are starting to signal their displeasure and warn of potential consequences if the Afghan government remains unyielding in its position.

In particular, Senators Patrick Leahy (D-VT) and Lindsey Graham (R-SC), co-chairmen of the subcommittee that oversees foreign aid programs, and Senator Dan Coats (R-IN) sponsored an amendment to the annual budget bill for the State Department that withholds “five dollars of U.S. aid to the Afghan Government for every one dollar in fees imposed on the United States for bringing equipment and supplies back home.”  With the total amount of customs fee standing at $70 million, if passed, this amendment would have a huge impact on Afghanistan’s development.

In discussing the amendment, Leahy said the fees are a “blatant extortion, it’s the last straw…After all we have sacrificed in lives, in the wounds of our soldiers, and in the huge investments we have made to help that country, this is an insult.” Graham responded similarly saying of the Afghan policy: “It’s ridiculous, offensive, and will not stand.” For his part, Coats stated: “We must not allow the Afghan government to exploit the United States further as we begin our anticipated draw down.”

Karzai and those in his government certainly have the right to exercise their sovereignty and, perhaps, have some valid concerns regarding the BSA and reasons for the additional taxation/customs fees.  But a failure to agree on the security arrangements post-2014 risks a complete withdrawal of U.S. forces; a draw-down that will strike physical and psychological blows to the Afghan National Security Forces who still need U.S. and coalition support and training assistance.  It would also deny the United States a vital basing infrastructure that was built at significant cost and remains of great importance to both Afghan and U.S. national interests.

For Karzai, however, underestimating the Congressional commitment to holding the Afghan government accountable on the taxes and custom fees is perhaps the only thing more dangerous.   Congress has the “power of the purse” and the ability to cut funding to U.S. activities in Afghanistan all together, something its members already threatened to do. One should also not forget that it was Congress that passed the Case-Church Amendment in 1973, cutting funding for and, effectively ending the war in Vietnam.

Furthermore, if the United States chooses to cut donor funds dramatically over perceived predatory behavior, other international donors will likely follow suit. Afghanistan is a country almost exclusively reliant on donor funds for its economic viability, and such action would put the Afghan government in a position from which it would struggle to recover.

Because of this, there is a sense that Karzai’s team will consider the consequences of these “head-on collisions” and reengage its U.S. counterparts to resolve these challenges soon.  Indeed, it appears that the Afghan government has already backed away from its demands for tariffs and custom fees; though undoubtedly the proof will be in the implementation of this concession.

But, the United States should also continue to compromise, particularly on issues related to Afghan fears over U.S. abandonment and a lack of enduring support.  Unfortunately, the current political environment in Washington suggests that unless the Afghan government steers clear of collision courses at this critical juncture, Congress will simply pull the plug on the Afghan enterprise, making the Leahy-Graham-Coats amendment the opening salvo of a full U.S. withdrawal and the beginning of the end of U.S. financial support for Afghanistan.

Ioannis Koskinas was a military officer for over twenty years and now focuses on economic development projects in Afghanistan and Pakistan.