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Diplomacy in Action

Remarks at Northern Distribution Network Conference


Remarks
Susan M. Elliott
Deputy Assistant Secretary, Bureau of South and Central Asian Affairs
Riga, Latvia
May 8, 2012

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Introduction

Thank you, Mr. Bathija. I’m very pleased to have the opportunity to be here in Riga to discuss this important topic. I especially want to thank the Stockholm School of Economics in Riga for hosting this workshop.

Today, my remarks will touch on the Northern Distribution Network as well as our vision for a New Silk Road linking Afghanistan to Central and South Asia and beyond.

Northern Distribution Network (NDN)

As Afghanistan is a landlocked country surrounded by some of the world’s most challenging terrain, getting goods into and out of the country always required a degree of innovation. Since 2009, we have worked with our partners in Europe, Central Asia, the Baltic Republics and Russia to increase the ISAF mission’s operational flexibility by diversifying transport routes.

In a relatively short period, we have successfully developed a network of land, sea and air routes that approach Afghanistan from the north – the Northern Distribution Network or NDN.

The first shipment of U.S. cargo on the NDN was completed in 2009, on a route that originated here in Riga and continued through Russia into Afghanistan. Estonia and Lithuania also provide important entry points on the NDN, and Russia and the Central Asian Republics have provided enormous support in allowing shipments to traverse their territory.

Of course, our partnership with the private sector has been a tremendous asset throughout this process, and a key to our success. Commercial partners are integral to the functioning of the NDN. And because their bottom-line is negatively affected by inefficiency, they are always looking to innovate so that we get cargo to our troops cheaper and faster.

To date, we’ve moved more than 66,000 containers of materials into Afghanistan via the NDN. As we prepare for 2014, equipment and vehicles – tens of thousands of them – that we’ve shipped into Afghanistan will need to come back out. The same routes we’ve used to get supplies into Afghanistan are now supporting the reverse transit of equipment.

Because we’re using existing infrastructure and commercial transit routes, these same routes can and should be used by the private sector to continue trade across the region, where there is ample opportunity for growth. The economic potential of a more open and integrated region – full of untapped human and natural resources – is virtually unlimited.

The New Silk Road

The products shipped across these transit routes stand to improve trade and therefore the lives and economic security of countries in the region. Liberalized trade can increase regional tax revenues and create jobs, producing a positive spill-over effect for the region and improving the lives of ordinary citizens.

Corruption, red tape, an imperfect investment climate, weak rule of law and security concerns on both sides of the border remain obstacles to maximizing the economic benefit of increased transit and trade.

But by encouraging trade, transit, energy and people-to-people linkages between these states, we can help transform the region into an active, prosperous participant in global markets.

That is the essence of the New Silk Road, outlined by Secretary Clinton last summer during her landmark speech in Chennai; to strengthen regional economic integration and promote economic opportunity between South and Central Asia with Afghanistan at its center. Regional governments can do this first through trade liberalization – which includes the reduction of non-tariff trade barriers, improved regulatory regimes, transparent border clearance procedures, and coordinated policies – we want to accelerate the flow of goods, services, and people throughout the region.

And second, through energy and infrastructure – which includes roads, bridges, electrical power grids, railways and pipelines – aiming to connect goods, services, and people.

The idea is a simple one: an Afghanistan firmly embedded in the economic life of a thriving South and Central Asia can increasingly be a source of peace and stability throughout the region. Transit and trade agreements, such as the Afghanistan-Pakistan Transit Trade Agreement and the Kyrgyzstan, Tajikistan, and Afghanistan Cross-Border Transport Agreement, if fully implemented, provide the framework for reducing trade barriers and encouraging regional economic cooperation. By helping facilitate greater connectivity and economic growth, this New Silk Road vision recognizes that a secure, stable, and prosperous Afghanistan can only exist in the context of an equally secure, stable, and increasingly prosperous region.

Securing the New Silk Road

Successful regional integration and economic growth is only possible on the basis of real domestic reform, serious anti-corruption efforts, and predictable business and regulatory environments. Security, especially the integrity of borders and transit corridors necessary for trade, is another critical element of this vision.

We want to ensure that this vision becomes real, in other words, that it is not compromised by the trafficking and criminal networks that seek to exploit instability and porous borders for their personal profit. Interagency cooperation and communication– especially between customs agencies, border officials, and drug control services – is critical to this effort.

Equally important are mechanisms that encourage cross-border cooperation. Institutions like the U.N. Office on Drugs and Crime, or UNODC, Central Asia Regional Information Coordination Center (CARICC), based in Almaty, and the OSCE efforts at customs and border training in Central Asia help strengthen information sharing, strengthen technical capacities, and create the people to people linkages between Central Asia and Afghanistan, and beyond.

Additionally, programs like the UNODC and World Customs Organization’s Container Control Program, which helps build countries’ capacity to counter the efforts of organized criminals and terrorists to exploit commercial trade routes, can provide inventive ways to balance the need for both security and efficiency. We are committed to broadening this cooperation even further. These organizations are providing technical expertise and equipment that will modernize and professionalize the region’s border security mechanisms.

To ensure that these capacity-building efforts achieve their objectives and help increase economic opportunities, we are working with Central Asian governments to combat the corruption and petty bribery that is endemic in the region.

Conclusion

The NDN has demonstrated that increased trade and transit in the region is possible, using existing resources, and has highlighted the huge potential for private-investment driven economic development throughout a regionally integrated economy.

It will be up to all of the countries in the region to ensure that the trade and transit connections developed during this period continue, and even expand along the New Silk Road.

Forums such as this are an ideal platform for discussing these important initiatives, hearing your views and insights, and learning from your valuable feedback.



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