What Afghanistan Means for Charter Cities

The Taliban have retaken Afghanistan. What does this mean for the future of charter cities?

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The Taliban have retaken Afghanistan. I am writing this within 12 hours of the fall of Kabul. The Afghan army, which numbered 350,000 (on paper) lost to the Taliban, which numbered 60,000. The Afghan army collapsed, with Americans struggling to evacuate their embassy in time. The image of helicopters ferrying Americans from Kabul to the airport is a stunning blow to American prestige.

The fall of Afghanistan calls into question the stability of the international order. The emperor has been exposed as having no clothes. America is no longer the world’s policeman. The result is an increase in regional conflict. It is difficult to know when this increase in conflict will occur. It’s possible that the current international order trudges along for another 30-40 years, getting chipped away ever so slightly, but remaining largely intact. Alternatively, it’s possible to imagine a sharp uptick in regional conflict over the next 5 years as countries try to fill the void of American power.

Charter cities are premised on a functional international order. They are a technocratic solution to ineffective governance. The underlying assumption is that governments have territorial integrity and at least a theoretical desire to improve the lives of their citizens. Charter cities align with national goals and create a legal framework to attract capital, create jobs, and build the conditions for sustained economic growth. Where can they most help?

Africa, which has the most to gain from charter cities, given their urbanization rate and poor governance, have the most to lose from regional conflict. Already, we’re seeing worrying signs.

Ethiopia is in the midst of a brutal civil war where Prime Minister Abiy Ahmed has called for all eligible citizens to join the armed forces. South Africa recently experienced mass riots due to the imprisonment of former president Jacob Zuma. It is an open question whether Nigeria as a state will exist in 30 years.

So far, conflicts in these locations have remained largely intrastate. Cross-border violence, when it does happen, is by non-state actors. Perhaps this is because of the American security bubble. Or perhaps it is due to African countries' inability to project force outside their borders.

What these conflicts do have in common is an ethnic dimension. The Ethiopian civil war is due to conflict between the Tigrayans and the Ethiopian National Defense Force. South African riots were led by the Zulu, the tribe of Zuma. Southern Nigeria, dominated by Igbo and Yoruba, are increasingly interested in independence.

Ethnicity is a powerful coordination tool. States which are currently propped up by international aid and implicit guarantees of American or European force will see increased conflict as such aid and force guarantees evaporate. Much of the conflict will be along ethnic lines. The result of these conflicts will be states that no longer adhere, or even claim to adhere, to liberal principles.

These conflicts are bad for charter cities. Who will invest in long term infrastructure without a stable political regime? Even if the conflict does not overlap with the territory of the charter city, it will still impact trade flows. The horn of Africa will likely lose investment given the Ethiopian civil war will lower the supply of exports and demand for imports.

Increased conflict does increase the demand for refugee cities. In 2000, 1% of the Afghan population fled Afghanistan. It could be 2% to 3% over the next few years, which constitutes 800,000 to 1.2 million residents. The EU isn’t welcoming Afghan migrants. The US won’t welcome more than 100,000.

The last time refugee cities were in the news was 2016. Naguib Sawiris, an Egyptian billionaire,  offered to buy a Greek island for $100 million to house refugees. Several other less ambitious proposals were also trotted out. Nothing happened.

The best time to build a refugee city is 5 years ago. The second-best time to build a refugee city is today. In the next decade there will be at least one, and likely more, humanitarian crisis causing the demand for mass rapid migration.

While it remains possible that the international order trudges along, the fall of Afghanistan has made me more pessimistic on the stability of the world order enabling charter cities to develop.