Introduction The security cooperation between Russia and Taliban of Afghanistan is not just a mere embodiment of achieving common understanding with each other in security realm. Nevertheless, the true importance of this agreement could be interpreted through analysing the timing and the circumstances of this event for both Russia and Taliban government. Although Moscow is slowly developing multifaceted relationship with Taliban, the security cooperation could be elevated as an acme of this relationship, notwithstanding, Afghanistan is well capable of strengthening Russia’s endeavour to reach out to the South Asian energy hungry markets through offering routes via its territory.  For Afghanistan, however, the military technical cooperation appears to be the most crucial topic as far as the ever-growing Pakistani military threat is concerned. Moreover, Kabul’s Russia “gambit” seems to involve more than just a security agreement alone, as Russia itself and its Moscow friendly Central Asian Countries would support Afghanistan at a time when the country is under mounting pressure from both Pakistan and global community. The Content of the Agreement Recently, on the margins of Moscow Security Conference organised on May 27, 2025, Russia and Taliban signed an agreement on “military technical cooperation”. Although the details of the signed document were not disclosed, there were some speculations circling around on various platforms about the genuine nature of this agreement. For example, “Afghanistan International” reported that “the head of Russia’s trade centre in Afghanistan said companies from Tatarstan could repair and refurbish military equipment used by the Taliban”. The agreement covers wider range of cooperation in weapons, military technologies, licenses, and joint developments between Russia and the Taliban government. Discussions also included potential Taliban access to Russian military equipment and weapons systems. Beyond hardware, Moscow committed to expanding cooperation with the Taliban across security, political, economic, and cultural sectors following Russia’s formal recognition of the Taliban government in may 2025. Sergei Shoigu, Secretary of the Security Council of the Russian Federation, also used the forum to call on Western countries to unfreeze Afghan government assets held in foreign banks, portraying the Russia as a counterweight to Western policy on Afghanistan. Apparently, the current meeting has been built upon a prior groundwork that was laid out as early as May 14, 2026, during a regional security meeting in Kyrgyzstan. Mr. Shoigu, then, described the growing Russia-Taliban relationship as a “pragmatic dialogue” and a “full-fledged partnership”, stating shared security concerns. Taliban’s participation in the forum came at a particularly sensitive moment when the Pakistani strikes in early 2026 had destroyed substantial amount of the Taliban’s military infrastructure including the NATO-standard munitions inherited in 2021. As a result, the Taliban’s munitions inventory was largely depleted, and Kabul’s defence budget reportedly remained in a chronic deficit. The blistering question though, could be “Does Russia have a capacity for delivering what it promises on paper”? considering the Moscow’s quite rich history of being unable to keep up with its assurances. On one hand, the protracted Ukraine war bogged down Russia’s military industrial complex in the country’s western frontier and eventually debilitated its capability to manufacture enough defence hardware intended for the foreign markets. On the other hand, unprecedented quantity of combined western sanctions on Russian economy also enormously impacted on the country’s ability of delivering military tech on foreign markets not to mention the potential influence of the secondary sanction policy on those who dares to strengthen dependency on the hardware Russia could provide with. For Russia, the agreement could represent one of the most important pillars of Moscow’s broader vision for establishing multidimensional relationship with the Taliban government. Russia has long been enjoying relatively wormer political and diplomatic understanding as well as good economic relations with Kabul. Naturally, the security relationship with Taliban including military-technical cooperation is regarded as a crucial aspect of that comprehensive relationship architecture. Moreover, Afghanistan, with a strong desire for having a good relationship with Moscow, might also embody a crucial geographical space for extending Russia’s desire to reach out to the greater South Asia’s energy market through Afghanistan. Here, because of this, an obvious trade-off for Russia could emerge. And the Russians ought to strike balance between playing a principal role in turbocharging, at list on paper at present, the Taliban’s ability to thwart any foreign military aggression and expecting Pakistan to greenlight exporting the Russian energy to further South Asia through Pakistan’s territory. Accordingly, Islamabad might slow or even block Russia’s ambition to explore new energy market in South Asia. Pakistan – Afghanistan standoff a trigger for Afghan’s Northward Diplomacy Islamabad’s Afghanistan strategy composed of a blended diplomatic and political pressures appear to be fundamentally transforming in nature. Until recently, Pakistan has been favouring diplomacy for resolving some of the crucial issues regarding Afghanistan, even though those challenges were of a fundamental importance to Islamabad. These challenges would involve terrorism and extremism, separatism, border issues, refugees and several other areas such as trade and connectivity.  Starting from the October 2025 however, everything begun to change when Pakistan’s military started so called “Operation Khyber Storm” and heavily bombed the alleged terrorist strongholds in the bordering provinces of Afghanistan.  The extraordinary nature of that October assault against Afghanistan could be the Islamabad’s apparent disappointment with the effectiveness of the continued diplomacy mixed with several rounds of talks and negotiations with the Taliban authority for resolving range of issues, the most important one being to prevent the TTP from using Afghanistan’s soil as a safe heaven and stronghold to launch further attacks on Pakistan. As a result, the Pakistan’s military has taken all the matters at its own hand as the authority in Islamabad has seemed to be done with continuing “useless” talks with Taliban. Therefore, Pakistan currently appears to be strongly confident in the military solution being only way going forward. Short military clash between India and Pakistan in May 2025, has said to be dramatically emboldened Pakistan to occasionally apply the military means to solve the deepest security issues it has with its neighbours particularly, with Afghanistan. The air warfare experience with India could have set a strong precedent for Pakistan’s military for further using the strategy of applying maximum pressure on Taliban for achieving a substantial concession on such pressing issues as border disputes and TTP questions going forward. As a result, the evolution of events on this direction has seemed to further push the Taliban government to become even more active in diplomacy blended with a search for a burgeoning strategic alignment with an alternative security provider such as Moscow. The China – Russia quarrel The Russia-Taliban agreement cannot be read without meticulously scrutinizing the Chinese place in the equation. Ostensibly, for the last several decades, China – Pakistan relations have risen to the level of “all-weather strategic cooperative partnership” as both parties would call it. Presently, the security is at the heart of this cooperation since almost 80 percent of the Pakistani military acquisitions are sourced from China. When it comes to the China’s position on the Islamabad’s security related issues with its neighbours, China almost exclusively (both overtly and covertly) sides with Pakistan. Beijing openly backed Pakistan during the May 2025 India-Pakistan clash providing Islamabad with a strong diplomatic support coupled with a reported real-time intelligence. Although China appears to be quite explicit about recognising Islamabad’s deep-seated security and geopolitical interests in Afghanistan, Beijing is also extremely cautious about balancing its economic and security interests in Afghanistan. China and Pakistan’s “ironclad” relationship is leaving relatively few options for Kabul other than just opting in Moscow for creating a counterbalance against extremely aggressive Pakistan. The more Afghanistan and Pakistan relationships heat up and grow into kinetic conflict, the more China and Russia might have to unwillingly choose to compete in AFPAC region. Moreover, Moscow’s solidarity with Taliban and willingness to strengthen its security capacity might, over the long run, impact on its economic interests since Islamabad could practically shut down any use of its territory as a corridor for Russian energy towards South Asian market. At the same time, however, China ought to also be ready for absorbing some economic loss in Afghanistan due to its exclusive support for Pakistan. Considering, Beijing has already secured several mineral deals in Afghanistan involving lithium and copper deals. Conclusion Russia – Taliban security agreement appears to be timely important event for both parties. The Taliban government in Kabul seems to need Russia as much as the opposite being the case as Kabul is increasingly trying to seize the opportunity for slowly pivoting towards Russia and Russia friendly Central Asian Countries. In terms of Afghanistan’s expectations though, the critically needed security umbrella potentially provided by Russia is seemingly very important, bearing in mind that Kabul’s increasing hostility against Pakistan might produce a threat to the very existence of the Taliban government in Afghanistan. This fundamental adjustment looks to be necessitated by relatively loathing relationship between Afghanistan and Pakistan. However, Russia’s manoeuvre might yield certain unintended consequences for Moscow as Islamabad could slow Russia’s ambition to export energy to further South Asia through Afghanistan and Pakistan.  At this critical juncture, both Russia and Afghanistan look to walk a tightrope because each of them has something to lose out of these incipient alignments. Unintended China – Russia rivalry unfolds itself against a larger backdrop where Afghanistan is simultaneously becoming a strategic location for every major powers. Russia sees Afghanistan territory as an energy corridor while China values it for the untapped resources of rare earth minerals. Afghanistan, long treated as a problem to be managed, is quietly becoming a focal point for every major power’s ambitions. * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

Co-author: Oygul Yuldasheva   Over the past decade, green industrialization has emerged as one of the defining economic trends of our time. The concept refers to the process by which countries restructure their industries (steel production, fertilizer manufacturing, cement production, and energy generation) to significantly reduce carbon dioxide (CO₂) emissions, while continuing to grow their economies. In practical terms, this means replacing coal- and gas-powered factories with facilities that run on renewable energy sources such as solar and wind, improving energy efficiency, and adopting production technologies that release far less carbon into the atmosphere. The underlying goal is straightforward: to ensure that economic development no longer comes at the expense of the climate. This global shift has taken on a new urgency since 1 January 2026, when the European Union fully activated the Carbon Border Adjustment Mechanism (CBAM) – a landmark trade policy instrument that directly links environmental standards to market access. Under CBAM, any company wishing to export certain carbon-intensive goods into the EU must now purchase certificates corresponding to the amount of CO₂ embedded in the production of those goods. The covered products include steel, aluminum, cement, fertilizers, hydrogen, and electricity – sectors that together account for a significant share (individually, iron and steel production contributes 7–9% of global GHG emissions, cement approximately 8%, aluminum around 2–3%, fertilizer manufacturing 2–3%, and hydrogen production close to 2-2.5%, while the power sector represents roughly 25% of global CO₂ emissions) of global industrial emissions. The rationale is to ensure that foreign producers face the same carbon cost as EU manufacturers, who are already subject to the EU’s own internal carbon pricing system. The EU presents CBAM as a measure to prevent carbon leakage – the risk that production simply moves to countries with weaker environmental rules. Many developing economies, however, view it very differently. From their perspective, CBAM functions as a form of “carbon protectionism”: a trade barrier that uses environmental criteria to disadvantage exporters from countries that have not yet completed their own green transition. Countries that rely on fossil fuels, often due to limited financial and technological resources find their goods subject to additional costs at the EU border. This raises a legitimate concern: that CBAM may inadvertently penalize poorer nations for the same industrialization path that wealthier nations themselves followed for over a century, while simultaneously benefiting European producers who are shielded from lower-cost foreign competition. For Uzbekistan, a fast-growing economy that exports steel, aluminum, fertilizers, and gas-related products to European markets, CBAM presents both a serious challenge and a strategic opening. On the one hand, Uzbekistan’s industrial sector remains heavily dependent on carbon-intensive energy sources, meaning its exports face higher CBAM costs and reduced competitiveness in Europe. On the other hand, Uzbekistan possesses exceptional solar and wind resources and has already launched one of the most ambitious renewable energy programs in Central Asia – a foundation that, if extended to its industrial base, could reduce CBAM exposure, attract international investment, and open doors to premium low-carbon export markets. I. The risks of CBAM for Uzbekistan’s exports to the EU market The EU’s CBAM applies to six product categories: cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen. These are precisely the sectors in which Uzbekistan has developed export capacity and in which the country’s production remains heavily reliant on fossil fuels and aging industrial infrastructure. According to Uzbekistan’s 2024 foreign trade data, substantial volumes of exports to EU member states comprise fertilisers, ferrous metals, and aluminium, with the principal destination markets being Latvia, Lithuania, Romania, and Germany.   Product EU Importing Countries, Value (USD thousand) Fertilisers Latvia – 46,224 │ Romania – 22,778 │ Lithuania – 16,960 Iron and Steel Latvia – 4,713 │ Lithuania – 2,794 │ Germany – 523 Aluminium Lithuania – 10,672 │ Latvia – 968 │ Bulgaria – 115   According to the International Monetary Fund the total annual CBAM cost for the entire Middle East and Central Asia region will reach $1.7 billion per year – equivalent to a 14% surcharge, a kind of extra customs duty, on all goods from the region that fall under CBAM rules. Within that regional total, Uzbekistan and Kazakhstan dominate: some 90% of regional emissions covered by CBAM originate in these countries, primarily from iron and steel, aluminum, and fertilizer production. This concentration reflects the fact that both economies export large volumes of these high‑emission products, placing them squarely in CBAM’s crosshairs. The United Nations Economic Commission for Europe (UNECE) report, provides the most specific projections for Uzbekistan. It finds that EU carbon prices are projected to rise sharply, reaching approximately $200 per ton of CO₂ by 2030 and around $350 by 2050. At those levels, the cost of Uzbek steel exported to Europe could rise by as much as 14%, fundamentally altering its price competitiveness. The World Bank’s CBAM Exposure Index offers a nuanced picture. While Uzbek aluminum actually shows lower emission intensity than the average EU producer, potentially giving it a slight competitive advantage in that sub-sector, other key exports, particularly steel and fertilizers, face significant exposure owing to Uzbekistan’s dependence on carbon-intensive energy and dated production technologies. A structural vulnerability compounds these direct cost pressures: Uzbekistan has not yet established a domestic carbon pricing mechanism. Under CBAM rules, exporters may deduct carbon prices already paid in their home country from their EU obligations. Without such a mechanism, Uzbek exporters cannot claim this deduction, meaning they bear the full CBAM cost – while competitors in countries with domestic carbon pricing systems may pay substantially less. Compounding this is the verification burden. From 2026, emission reports can no longer be self-certified; they must be verified by accredited independent experts. Where data is missing or unreliable, the EU applies conservative default values that are deliberately penalizing and may overstate actual emissions. Uzbek exporters who lack robust monitoring, reporting, and verification (MRV) systems could therefore face higher effective CBAM costs than their actual emission intensity would warrant. II. The Opportunities: Solar Energy, Modernization, and Green Certificates The same CBAM pressure that creates risks also creates incentives and Uzbekistan has already begun to respond. The country possesses structural advantages that, if leveraged strategically, could transform CBAM from a threat into a gateway to premium green markets. Uzbekistan’s geographic endowment is exceptional: the country enjoys among the highest levels of solar irradiation in Eurasia, with a total solar energy technical potential estimated at 177 Mtoe – nearly fourtimes the country’s entire primary energy consumption. This potential is already being activated at scale. By the end of 2025, Uzbekistan had commissioned 15 solar and 5 wind power plants with a combined capacity of 5,582 MW. Renewable assets generated 10.5 bln kWh of electricity in 2025 alone, saving 2.8bln cubic metres of natural gas and preventing 4.2 mln tonnes of harmful emissions. The government’s 2030 target is ambitious: 54% of national electricity generation from renewables, reaching 21 GW in combined solar and wind capacity, which would save 18 bln cubic metres of natural gas annually. 2025 year was declared as the “Year of Environmental Protection and Green Economy,”and Uzbekistan has attracted approximately $35 bln in green energy investment from international partners including Saudi Arabia’s ACWA Power, France’s Voltalia and the Asian Development Bank. The UNECE report notes that aligning power generation, hydrogen production, and industrial processes with EU-comparable carbon prices could simultaneously reduce CBAM-related costs while advancing national climate goals. The report identifies substantial opportunities for fuel switching away from coal – up to more than 600 PJ (around 167 TWh) by 2050 – alongside increased electrification, improved energy efficiency, and greater integration of renewable sources. Already, several domestic industrial companies in Uzbekistan have adopted international green-energy certification. This certification pathway is critical: verified low-emission production provides the data foundation for calculating actual – rather than penalizing default – CBAM charges. Firms that can document clean production processes will face materially lower CBAM obligations and gain a competitive edge over less-documented rivals. Uzbekistan has also pioneered green hydrogen production. The first industrial-scale green hydrogen facility in Central Asia commenced operations in Chirchik, powered by solar and wind energy through a public-private partnership with ACWA Power. Since hydrogen is a covered sector under CBAM, green hydrogen production positions Uzbekistan to export a commodity that, when verified as produced with renewable energy, would carry negligible embedded emissions and therefore incur minimal CBAM charges at the EU border. Moreover, Uzbekistan, Kazakhstan, and Azerbaijan are advancing a Green Corridor initiative – a regional framework for exporting “green” electricity to Europe via undersea and overland transmission routes. The Green Corridor Alliance was formally established in Baku in July 2025, with Italy’s CESIengaged to prepare a feasibility study expected by early 2027. If realized, this corridor would allow Uzbekistan to export verified clean electricity – a CBAM-compliant, premium product – directly to European markets. III. Recommendations for Uzbekistan's Policy-Makers and Industrial Sector Establish a domestic carbon pricing instrument Uzbekistan should develop and implement a domestic carbon pricing mechanism – whether an emissions trading system or a carbon tax – as a matter of priority. Under CBAM rules, verified carbon costs paid domestically can be deducted from EU obligations. This single reform could significantly reduce the financial exposure of Uzbek exporters. Regional neighbor Kazakhstan have already established such systems, though at prices below EU levels. Uzbekistan could learn from these models while calibrating pricing to its economic conditions. Build robust MRV systems for industry From 2026, the EU applies penalizing default emission values where verified data is unavailable. Uzbekistan must urgently build monitoring, reporting, and verification (MRV) capacity across its export-oriented industries. Technical assistance from the UNECE, World Bank, and Asian Development Bank (ADB) is available for this purpose. Factories with verified low-emission profiles not only reduce their CBAM liability but can use that data to market premium, “green”-certified products to European buyers who increasingly demand documented sustainability credentials. Accelerate industrial decarbonization in Steel and Fertilizers The sectors most exposed to CBAM – iron and steel, aluminum, fertilizers – must be prioritized for energy efficiency investment and fuel switching. The UNECE report identifies fuel switching away from coal as the single highest-impact intervention, with potential savings. Public-private partnerships and concessional finance from international the EU Emissions Trading System institutions should be channeled specifically into these sectors. Pursue Green Certification and EU market positioning Uzbekistan should explore the EU Emissions Trading System (EU-ETS) linkage or mutual recognition arrangements that would allow its domestic carbon pricing to be recognized for CBAM deduction purposes – a path pursued by Switzerland and Norway. Develop Green Hydrogen as a Strategic Export Uzbekistan’s pioneering green hydrogen facility in Chirchik should be scaled and replicated. The EU’s growing appetite for imported green hydrogen – driven by its REPowerEU strategy – represents a substantial long-term market opportunity for Uzbekistan, provided production is verified and transmission infrastructure is developed. The Green Corridor project, with its 2027 feasibility timeline, should be fast-tracked. The European Union offers a range of technical assistance instruments – including short-term expert missions through TAIEX, long‑term institution‑building via the EU4Environment program, specialized training through the MED‑GEM Network, and direct engagement through the EU Delegation in Tashkent – that can be accessed to strengthen domestic monitoring, reporting, and verification systems, train operators and verifiers, and lower the compliance burden on Uzbek exporters. If Uzbekistan consistently implements targeted and well-calibrated measures – such as introducing a national carbon pricing instrument, developing a robust MRV (Monitoring, Reporting, and Verification) infrastructure, decarbonizing energy-intensive industries, and achieving full harmonization with EU environmental standards – it will be able to transform the Carbon Border Adjustment Mechanism (CBAM) from an external risk into a strategic catalyst. Such a proactive transition would not only preserve the competitiveness of Uzbek exports in European markets but also position the country as a credible and verifiable supplier of low-carbon steel, clean electricity, and green hydrogen. * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

Nargiza Umarova’s article examines how Uzbekistan continues to advance the Kabul Corridor despite rising tensions between Afghanistan and Pakistan. The piece highlights that the Termez–Naibabad–Maidanshahr–Logar–Kharlachi railway remains a strategic infrastructure priority for Tashkent, Kabul, and Islamabad, as it could create the shortest overland connection between Central Asia and South Asia. The article underlines that recent upgrades to the Hairatan–Mazar-i-Sharif railway and the expansion of facilities at Naibabad station demonstrate Uzbekistan’s practical commitment to improving cross-border logistics with Afghanistan. These steps are not isolated technical measures, but part of a broader effort to strengthen Afghanistan’s role as a transit link and reduce the region’s dependence on longer maritime routes. Umarova also notes that repeated disruptions at Afghanistan–Pakistan border crossings have increased the importance of northern transit routes through Central Asia. In response, Uzbekistan is seeking to ease pressure on existing railway hubs and border stations, including by proposing the redirection of some freight traffic from the congested Saryagash–Keles crossing to the Oasis crossing point in Karakalpakstan. Overall, the article shows that the Afghan–Pakistani conflict has complicated, but not halted, the development of the Kabul Corridor. For Uzbekistan, the project remains a key element of its wider strategy to expand regional connectivity, diversify trade routes, and position Central Asia as a bridge between Europe, Eurasia, Afghanistan, and South Asia. Read on Jamestown * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

Following the Taliban movement’s rise to power in August 2021, a significant part of the international community expected a rapid economic collapse of Afghanistan. The grounds for such forecasts seemed obvious: the freezing of foreign exchange reserves, the cessation of Western financial assistance, sanctions, de facto disconnection from the global banking system, and the lack of international recognition of the new regime. However, these assessments were only partially justified. Despite a severe crisis, the regime managed to maintain the controllability of the state apparatus, centralized control over financial flows, and the basic stability of the economy. Currently, the key interest lies not in Afghanistan’s development potential, but in the regime’s capacity to adapt to conditions of international isolation. De facto, the Taliban is constructing a model of a “survival economy,” based not on modernization and investment growth, but on a combination of administrative control, shadow financial mechanisms, regional trade, and indirect external support through humanitarian channels. The foundation of the regime’s financial sustainability comprises: 1. Customs Revenues. After 2021, the Taliban focused particular attention on controlling trade crossings with Pakistan, Iran, and the Central Asian states. Under conditions of an extremely weak production base, it is precisely imports, transit, and border duties that provide the bulk of budget revenues. According to data from the World Bank and a number of international monitoring structures, as early as the first two years after coming to power, customs and tax revenues began to recover faster than expected: in 2023–2024, the regime's monthly domestic revenues in certain periods exceeded 15–20 billion afghanis (approximately $200–250 million), with a significant part of these funds derived precisely from customs duties. International experts note that the new Administration managed to centralize the duty collection system and significantly reduce the level of grassroots corruption compared to the previous Government. If previously a significant part of revenues dissolved into regional client networks and corrupt schemes, now financial flows are concentrated to a much greater extent under the control of the movement’s central leadership. Of particularly important significance are the Torkham, Chaman, and Spin Boldak border crossings on the Pakistani direction, and trade routes through Iran and Central Asia, through which the main volume of imports of fuel, food, and consumer goods passes. As a result, the economy of the regime acquires the character of a “border rent model,” under which the state exists predominantly through the control of trade corridors and import flows, rather than the development of domestic production. It is precisely this system that provides the Taliban movement with relatively stable revenues under conditions of international isolation. 2. Mineral Extraction An additional factor became the activation of mining of mineral resources, viewed as one of the few potential sources of long-term foreign exchange earnings. According to estimates by the US Geological Survey, the total value of Afghanistan's mineral resources could reach $1–3 trillion. This refers to large reserves of copper, iron ore, lithium, cobalt, gold, and rare earth metals. Of particular significance are the Aynak copper deposit and the Hajigak iron ore basin. After returning to power, the Taliban significantly increased coal exports to Pakistan: in 2022–2023, the volume of deliveries reached 3–4 million tons annually, and the regime's revenues were estimated in hundreds of millions of dollars. In parallel, cooperation with Chinese companies intensified. In 2023, the Xinjiang Central Asia Petroleum and Gas Co of China signed an agreement on the development of oil fields in the Amu Darya basin with anticipated investments of up to $540 million during the first three years. However, the Afghan Ministry of Mines and Petroleum nullified this 25-year contract in mid-2025 because a joint ministerial committee determined that the Chinese firm had repeatedly breached its contractual obligations and failed to meet its specified investment deadlines.According to data from the Afghan Ministry of Mines and Petroleum, revenues from oil extraction on the Amu Darya alone exceeded $130 million in 2025. Nevertheless, the resource sector still faces systemic constraints - a lack of infrastructure, technologies, international financing, and recognized security guarantees. Therefore, mineral extraction for now remains rather a strategic reserve of the regime and an instrument of negotiations with external partners, primarily China, than a full-fledged foundation for economic growth. At the same time, expectations of large-scale economic involvement by China have not yet materialized. Beijing demonstrates cautious pragmatism, avoiding major investments under conditions of instability. China is interested primarily in preventing terrorist threats near the borders of the Xinjiang Uygur Autonomous Region (XUAR) and in maintaining access to Afghanistan's potential resources, but is not ready to assume the role of the primary sponsor of the Afghan economy. 3. The Shadow Economy In parallel, the expansion of the shadow economy continues, which historically has been a crucial part of the Afghan economic system. International sanctions have only reinforced the significance of informal financial mechanisms, primarily the “hawala” system, which provides cross-border settlements outside traditional banking infrastructure. Through such networks pass trade operations, diaspora remittances, import financing, and a significant part of domestic monetary circulation. It is fundamentally important that the Taliban does not attempt to liquidate the shadow sector. On the contrary, the regime integrates it into its own governance system, utilizing the licensing of intermediaries, control of transport routes, and taxation of informal trade. As a result, the shadow economy becomes not a sign of state weakness, but one of the key mechanisms of its functioning. 4. The Narcotics Economy The narcotics economy deserves separate attention. Despite a more than 90% reduction in the production of opiates in Afghanistan following the 2022 ban, this does not indicate the complete disappearance of narcotics production. Firstly, significant volumes of opiates were accumulated in advance. Secondly, the supply deficit caused a sharp rise in prices, which partially compensated for the decline in production volumes. Thirdly, the production of synthetic drugs, primarily methamphetamine, is intensifying. International structures record a steady growth in seizures of Afghan methamphetamine in the Middle East, South Asia, and East Africa. Production is based on the ephedra plant, which is widespread in the central and western regions of the country. As a result, Afghanistan is gradually turning not only into a hub for opiate trafficking, but also into one of the new nodes for the production of synthetic drugs with higher profit margins and less dependence on the agricultural cycle. At this stage, there are no sufficient grounds to assert that the narcotics trade is the main centralized source of revenue for the regime. However, it continues to play an important role in financing regional elites, armed networks, and the shadow economy. A paradoxical but critically important factor in the stability of the regime remains international humanitarian aid, despite the absence of official recognition of the Taliban. International organizations continue to finance food programs, infrastructure projects, healthcare, and humanitarian operations. According to UN data, after 2021, Afghanistan received several billion dollars of external humanitarian support annually. In 2022 alone, the volume of international assistance exceeded $3 billion, and in 2023–2024, despite a gradual reduction in funding, the country remained one of the largest recipients of humanitarian aid in the world. Humanitarian programs in one form or another cover more than half of the country's population, while about 23 million Afghans continue to need permanent external support. Formally, these funds are directed to the population; however, factually they simultaneously support domestic demand, employment, currency circulation, and the functioning of basic social services, indirectly stabilizing the regime itself as well. Under conditions of a ruined economy, the humanitarian sector has turned into one of the largest sources of monetary circulation inside the country. Through the programs of the UN and international NGOs, food supplies, the payment of salaries to medical personnel, water supply facilities, and primary infrastructure are financed. De facto, a situation is emerging in which the international community, striving to prevent a humanitarian catastrophe and mass migration, simultaneously contributes to preserving the economic sustainability of the Taliban rule. At the same time, the regime itself consistently strengthens control over the distribution of aid, personnel appointments, and the logistics of humanitarian operations, seeking to use the international presence as an instrument of administrative influence and an additional source of internal legitimacy. Thus, the main vulnerability of the regime lies in the absence of long-term sources of modernization. Without international recognition, full access to the global financial system, large-scale investments, and institutional development, Afghanistan is unlikely to be able to transition from a “survival economy” to a model of sustainable growth. Ultimately, the economic sustainability of the Taliban movement’s regime is explained not by governance efficiency in the classical understanding, but by the ability to adapt the state to conditions of prolonged isolation. Afghanistan is gradually turning into an example of “low-cost authoritarian survival,” where a combination of customs rent, the shadow economy, humanitarian support, and regional informal ties allows the preservation of controllability even without international recognition. * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

The Eurasian Economic Forum, held in Astana on May 29 of the current year, should be viewed not simply as a routine EAEU event, but as an indicator of a more profound geopolitical realignment within the Eurasian space. Its primary distinguishing feature lies not only in its focus on artificial intelligence and digital transformation but also in the EAEU’s attempt to redefine its own role amidst the changing external economic environment for Russia, the transformation of transport routes, the growing role of China in Eurasian economic processes, the increasing significance of middle powers, and the gradual diversification of military-technical cooperation by individual states of the region. In this sense, the forum served as a platform where the EAEU sought to present itself not as a traditional integration format requiring adaptation to new conditions, but as a new digital and regulatory platform. The agenda encompassing digital technical regulation, artificial intelligence, product labelling, electronic document management, digital transport corridors, and product traceability reflects the bloc’s ambition to transition from classic customs integration to a more complex model of controlling trade flows, standards, data, and logistics procedures. This indicates that the future influence of the EAEU will be determined not only by tariffs and market access regimes but also by those who set the digital rules for trade, certification, sanitary control, transit, and industrial cooperation. However, beneath the forum’s technocratic agenda, deeper political contradictions are evident. The Armenian factor is the most indicative in this regard. Armenia remains a member of the EAEU, yet its foreign policy and military-political trajectory increasingly diverge from the Russian line. Yerevan has effectively frozen its participation in the CSTO before, is developing relations with the EU and the US, and is diversifying its sources of weaponry, including purchases and cooperation with India and France. Economically, however, Armenia is not yet ready for a sharp break with the EAEU, as its trade, energy, and migration ties with Russia remain significant. Therefore, Armenia is becoming one of the key indicators of the transformation of the former Eurasian integration model: EAEU membership no longer implies full alignment of foreign policy priorities with Russia. This situation highlights a broader problem for Russia. In the Russian expert-political discourse, the multi-vector approach of neighboring states is often viewed through the prism of preserving regional influence. The Russian reaction to Armenia’s European course demonstrates that for Moscow, the EAEU is not exclusively an economic project, but rather as one of the elements of maintaining economic, infrastructural, and institutional connectivity within the Eurasian space. This gives rise to an internal contradiction: on the one hand, the EAEU attempts to speak the language of the digital economy, technological modernization, and barrier-free trade; on the other hand, Russian political perception continues to proceed from traditional views on regional coordination and the limits of foreign policy manoeuvre. This contradiction is particularly critical for Central Asia. The region maintains close economic ties with Russia, while simultaneously experiencing a growing desire to diversify its external partners. In the military sphere, this manifests in the gradual diversification of sources of military-technical cooperation and the expansion of ties with China, Turkey, Western, and other manufacturers. A significant part of Kazakhstan’s military-technical cooperation has traditionally been linked to the Russian direction, yet the issue of diversification is gradually becoming a component of its long-term security. For Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan, this trend is even more pronounced, as their military, technological, and transport policies can increasingly less be tied solely to a single external center. In this configuration, China acts less as a forum participant and more as the primary external structural factor. The EAEU is compelled to shape its digital and transport agenda in consideration of China’s Belt and Road Initiative. For Moscow and the EEC, this creates a dual challenge: on the one hand, it is necessary to leverage Chinese investments, transport corridors, and trade dynamics; on the other hand, they need to preserve the EAEU’s own regulatory subjectivity while aligning with Chinese infrastructure initiatives. The participation of external partners, primarily Iran and the UAE, is also of particular importance. For the EAEU, Iran represents the southern vector, associated with the International North–South Transport Corridor, sanctions-resistant trade, and access to the markets of the Middle East and South Asia. The UAE, conversely, acts as a financial and logistical hub through which the EAEU seeks to expand ties with the Persian Gulf and global trade flows. The Union aims to transcend post-Soviet geography and present itself as a link in the Eurasian-Middle Eastern economic architecture. For Central Asia, such a transformation presents both opportunities and risks. The positive effect is that the countries of the region gain more tools for transport diversification, trade digitalization, reduction of transit costs, and expanded access to the markets of the EAEU, Iran, the Persian Gulf, and China. However, the risks are associated with a potential increase in regulatory dependence: digital standards, labeling systems, technical regulations, sanitary procedures, and data exchange platforms can serve not only to facilitate trade but also act as a new mechanism for controlling foreign economic flows. Nevertheless, the case of Armenia, the strengthening of China, the participation of Iran and the UAE, and the diversification of Central Asia indicate that Eurasian integration is gradually acquiring a more multi-actor character and is transforming into a space of interaction among various power centres, routes, and regulatory models. Economic Analysis The economic dimension of the forum also reveals that the digital agenda holds direct, practical significance for Uzbekistan. The EAEU remains one of the key trade and economic directions for Uzbekistan, showing stable growth dynamics. According to available data (Table 1), between 2017 and 2025, the trade turnover with the EAEU increased from $7.2 billion to $20.2 billion (almost by 2.8 times). Uzbekistan’s exports to EAEU countries grew from $3.3 billion to $6.9 billion, while imports rose from $3.9 billion to $13.3 billion. Such dynamics demonstrate that Uzbekistan’s economic ties with the EAEU are stable and structural in nature. Table 1. Uzbekistan’s Trade Turnover with EAEU Member States (2025 vs. Q1 2026) Russia and Kazakhstan remain Uzbekistan’s primary partners within the Eurasian space, which is explained not only by the scale of their economies but also by geographical proximity, transport interconnectivity, energy flows, industrial ties, and labour mobility. For Uzbekistan, the EAEU serves not only as a sales market but also as a source of raw materials, fuel, food, industrial goods, equipment, and logistical capabilities. At the same time, Uzbekistan’s trade with the EAEU maintains a pronounced asymmetry (Table 2). Uzbekistan exports industrial goods, textiles, food, fruit and vegetable products, services, certain types of machinery, and chemical products to the Union countries. In turn, it imports metals, petroleum products, gas, grain, flour, vegetable oils, pharmaceutical products, timber, equipment, and other industrial components from EAEU countries. This deficit should not necessarily be viewed as a strictly negative factor, as a significant portion of the imports is utilized for domestic production, construction, processing, and maintaining price stability within the domestic market. This is precisely why the digitalization of trade, discussed at the forum, is of special importance to Uzbekistan. If digital transport corridors, electronic documents, navigation seals, technical regulation, sanitary and phytosanitary procedures, digital labelling, and product traceability operate effectively, they could lower export costs, expedite border crossings, enhance supply transparency, and facilitate the access of Uzbek goods to EAEU markets. Table 2. Commodity Structure of Uzbekistan-EAEU Trade (End of 2025) However, in an unfavourable scenario, these same tools could become a new layer of non-tariff barriers if digital standards are developed without considering the interests of observer states and external trading partners. Particularly sensitive sectors for Uzbekistan include agriculture, the textile industry, food processing, electrical engineering, pharmaceuticals, building materials, and transport services. These industries are either already oriented toward EAEU markets or rely on raw materials, components, and logistics routes connected to the Eurasian space. The issue of compatibility among national systems for certification, labelling, phytosanitary control, and electronic document management becomes a condition for preserving the competitiveness of Uzbek exports, rather than merely a technical detail. The investment dimension also confirms the depth of economic interconnectedness (Table 3). Over 5,000 enterprises with EAEU country capital operate in Uzbekistan, and investments from Union states are directed predominantly into the real sector: energy, metallurgy, telecommunications, logistics, light industry, mechanical engineering, and agro-industrial processing. While establishing a foundation for industrial cooperation, this requires Uzbekistan to pursue a more proactive policy toward localizing production, increasing value-added, and preventing the country from turning solely into a sales market or a hub for low-tech assembly. Table 3. EAEU Foreign Direct Investment Profile in Uzbekistan (2025) The role of the Eurasian Development Bank and other regional financial mechanisms warrants separate attention. For Uzbekistan, they can be useful in transport infrastructure projects, energy, modernization of utility networks, the agro-industrial complex, and digital logistics. The use of such instruments should be balanced with cooperation with other international financial institutions to ensure that infrastructural modernization does not create excessive dependence on a single financial and institutional framework. Equally important is the labour market. For Uzbekistan, the EAEU remains a significant destination for labour migration, and remittances from migrant workers continue to play a crucial role for households and domestic consumption. The digitalization of the EAEU labour market (electronic employment contracts, digital employment platforms, biometric tools, electronic registration, and data exchange) directly affects the interests of Uzbek citizens. Such mechanisms can simplify legal employment and reduce the level of informal employment, but simultaneously, they could tighten administrative control and generate new risks for migrants in the absence of transparent rules for protecting their rights. In this context, Uzbekistan’s internal reforms acquire foreign economic significance. Simplifying tax administration, raising the VAT transition threshold, digitalizing small and medium-sized businesses, formalizing employment, and developing electronic services create the prerequisites for the more active participation of Uzbek enterprises in cross-border digital trade. A business operating in the shadow economy cannot fully utilize digital labelling, electronic declarations, e-commerce platforms, and product traceability systems. Consequently, the internal formalization of the economy becomes a prerequisite for external competitiveness. Conclusions and Recommendations for Uzbekistan The significance of the forum for Uzbekistan should be viewed not through the logic of converging with or distancing from the EAEU, but rather as the pragmatic management of interdependence. It is important for Uzbekistan to participate in discussions regarding the EAEU’s digital and regulatory mechanisms, as they directly impact exports, transit, certification, agricultural trade, logistics, and industrial cooperation. At the same time, Tashkent must avoid decisions that could restrict its multi-vector foreign economic policy, its WTO accession negotiation process, and its cooperation with China, the European Union, Turkey, the Gulf States, and South Asia The forum in Astana demonstrates that the EAEU is attempting to shift from a classic integration model based on customs procedures and common markets to a digital model. For Uzbekistan, this creates opportunities to lower trade barriers, expand exports, connect to digital transport corridors, develop industrial cooperation, and participate in regional infrastructure projects. In practical terms, it is advisable to utilize the forum’s outcomes to advance several directions: Accelerate efforts to eliminate technical, sanitary, and phytosanitary barriers for Uzbek goods. Develop plans to connect to digital transport corridors, electronic waybills, navigation seals, and data exchange systems. Expand industrial cooperation in sectors where Uzbekistan already possesses a production base and export potential. Carefully study the experiences with digital labeling, public procurement, agricultural platforms, and digital statistics, while adapting them to national interests. It is necessary to leverage the observer status for institutional dialogue without assuming obligations that would limit a multi-vector foreign economic policy. The core objective is not the institutional deepening of participation in the EAEU, but rather a selective engagement with those mechanisms that yield practical economic benefits without constraining strategic autonomy. Such an approach will enable the leveraging of Eurasian connectivity advantages without turning it into dependence on a single integration centre. * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

Relations between Pakistan and Afghanistan have long maintained a dual character: formal strategic interaction coexists with persistent mutual distrust, border confrontation, and competition for influence in the cross-border space. The current stage of developments shows that the conflict between the parties is not situational but structural, with its causes lying much deeper than current political crises or the activities of individual armed groups. A key feature of Pakistan-Afghanistan relations is that both sides view each other simultaneously as a necessary partner and as a source of threats to national security. For Pakistan, Afghanistan has traditionally been perceived through the lens of strategic vulnerability on its western flank, internal ethno-political stability, and regional rivalry with India. For Afghanistan, Pakistan remains a state seeking to limit Afghan sovereignty through political, military, and ideological influence. The foundation of the long-standing conflict lies in the divergence of fundamental perceptions of security and statehood. Pakistani strategy has historically been built on the desire to ensure a controlled and loyal political space in Afghanistan, one that would preclude the formation of a government in Kabul oriented toward close cooperation with India or support for Pashtun nationalism. This explains the long-standing reliance of Pakistan’s military-intelligence apparatus on using Afghan armed and religious-political groups as instruments of regional influence. At the same time, for a significant part of Afghanistan’s political elites and society, Pakistan is perceived as the main external factor of destabilization, contributing to the persistence of armed networks, cross-border extremism, and chronic instability within the country. Consequently, a stable model of limited cooperation without strategic trust has emerged between the two sides. One central source of tension remains the border factor. The Durand Line continues to play a role not only as a disputed boundary but also as a symbol of the unresolved issue of cross-border Pashtun identity. For Islamabad, controlling the border areas is directly linked to risks of separatism and internal destabilization. For Kabul, it is tied to the question of the historical and political legitimacy of the border. In current conditions, this factor is exacerbated by the weak governance of border regions, the activity of armed groups, and the high degree of autonomy of tribal structures. An additional source of conflict is the difference in the parties’ approaches to using radical armed movements. For a long period, Pakistan viewed some Afghan Islamist structures as instruments to advance its interests in Afghanistan. However, the gradual fragmentation of the radical milieu has led to a loss of full control over these groups. As a result, many structures initially considered a foreign policy asset have transformed into an independent threat factor for Pakistan itself. Of particular importance at present is the activity of the Tehrik-i-Taliban Pakistan (TTP). Following the Taliban’s rise to power in Kabul, the TTP has significantly expanded its capabilities for basing, logistics, and coordination of actions on Afghan territory. According to estimates by the UN Security Council Monitoring Team, around 6,000 TTP militants are currently in Afghanistan, concentrated mainly in the eastern provinces bordering Pakistan. Islamabad increasingly openly accuses the Afghan authorities of being unable or unwilling to restrict TTP activities. The Afghan side, in turn, rejects these accusations and accuses Pakistan of attempting to pressure and interfere in its internal affairs. Against the backdrop of the latest escalation of the border conflict in October 2025, clashes resulted in dozens of fatalities on both sides (by various estimates, over 60 from each country) and numerous injuries. Meanwhile, among the Afghan civilian population, according to the UN, at least 37 deaths and over 400 injuries were recorded, giving the confrontation additional intensity and making it the largest escalation in recent years. The Taliban’s return to power in Afghanistan in 2021 was initially perceived by Pakistan as a strategic achievement capable of fostering a friendly regime and reducing threat levels on its western border. However, subsequent developments have shown the limits of such expectations. Despite historical ties between Pakistani security structures and the Afghan Taliban, Afghanistan’s new leadership demonstrates a significantly higher degree of autonomy than Islamabad had assumed. Moreover, the ideological and ethnic affinity between the Afghan Taliban and the TTP objectively limits Kabul’s readiness to take harsh action against Pakistani anti-government groups. As a result, Pakistan finds itself in a situation where the rise to power of an allied force has not strengthened security, but has instead contributed to the expansion of cross-border threats. Additional tensions have arisen from intensified border clashes, Pakistan’s construction of engineering barriers along the Durand Line, mass deportations of Afghan refugees, and rising anti-Pakistan sentiment within Afghanistan. These processes are creating long-term negative dynamics that complicate prospects for political resolution. External actors continue to exert significant influence on the conflict’s development. For India, Afghanistan remains an important avenue for strategically containing Pakistan and expanding political presence in the region. Islamabad traditionally views any increase in Indian influence in Kabul as a direct threat to its own security. It is largely the factor of India-Pakistan rivalry that explains Pakistan’s desire to retain maximum influence over Afghanistan’s internal political processes. Further exacerbation of Pakistan-Afghanistan relations followed the official visit of the Taliban government’s Foreign Minister, Amir Khan Muttaqi, to New Delhi on October 9, 2025, where he held talks with Indian leadership on political interaction, trade, and humanitarian cooperation. In Islamabad, the intensification of contacts between Kabul and Delhi was perceived as an alarming signal and further evidence of growing Indian influence in Afghanistan, deepening the existing contradictions between Pakistan and the de facto authorities in Kabul. China is primarily interested in preventing the spread of instability to regional transport and logistics projects, including CPEC, and minimizing threats to the Xinjiang Uygur Autonomous Region. In this regard, Beijing maintains working contacts with both Pakistan and Afghanistan while avoiding direct involvement in the conflict. At the same time, China is actively developing interaction with the Central Asian states, viewing the region as a key link in the Belt and Road Initiative and an important element in securing China’s western borders. Iran views the situation through the lens of the security of Shia communities, migration risks, and the struggle for influence in western Afghanistan. Tehran maintains a pragmatic approach to interaction with the Taliban, despite persistent disagreements. Simultaneously, Iran seeks to strengthen transport and economic ties with Central Asian countries, using the Afghan direction as part of a broader regional strategy, including the development of transit routes to the states of the region. Uzbekistan has acquired particular importance in regional politics. Following the Taliban’s rise to power, Tashkent has taken one of the most active and pragmatic positions among Central Asian countries. Uzbekistan consistently advocates for maintaining dialogue with Kabul, developing transport connectivity, and integrating Afghanistan into regional economic projects. For Uzbekistan, stability in Afghanistan is directly linked to the security of its southern borders, the prospects for implementing the Termez–Mazar-i-Sharif–Kabul–Khalachi railway corridor, and expanding trade and economic cooperation between Central and South Asia. Against this background, the deterioration of relations between Kabul and Islamabad, accompanied by periodic closures of key border crossings at Torkham and Chaman, negatively affects not only bilateral Afghan-Pakistani trade but also the economic interests of Central Asian states. Disruptions in goods transit, multi‑million dollar losses for foreign trade participants, rising logistics costs, and reduced predictability of transport routes undermine the region’s plans to expand access to Pakistani ports and South Asian markets. Under these circumstances, Uzbekistan seeks to maintain balanced relations with both Kabul and Islamabad, avoiding being drawn into their contradictions while advocating for the stabilization of regional transport communications. For the United States, after the withdrawal of troops, the priority remains preventing Afghanistan from becoming a global hub for transnational terrorism. At the same time, the reduced American presence has objectively diminished the possibilities for external balancing between Kabul and Islamabad. In the new conditions, the Central Asian states, primarily Uzbekistan, are increasingly emerging as independent regional mediators and platforms for diplomatic engagement on Afghan issues. Current dynamics suggest that even with the preservation of formal channels of interaction, the parties are unlikely to transition to sustainable strategic partnership in the foreseeable future. A more probable scenario is the persistence of a model of limited interaction amid periodic crises, cross-border incidents, and mutual pressure. The central contradiction of the current situation is that Pakistan, seeking to strengthen its own security by fostering a friendly political regime in Afghanistan, has instead encountered an intensification of precisely those cross-border threats it initially sought to minimize. This demonstrates the limited effectiveness of a strategy based on managed influence in the context of high fragmentation of Afghanistan’s political space and the continued activity of armed groups. As a result, regional dynamics are increasingly determined not by the controlled influence of individual external players but by a set of interconnected conflicts that go beyond the bilateral “Kabul–Islamabad” logic. * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.