Afghanistan remained the least peaceful country in the world according to the 2023 Global Peace Index. The swift and dramatic Taliban offensive in the spring of 2021, culminating in the takeover of Kabul on August 15, plunged the nation into turmoil, but after two years some inroads have been made in normalising relations with the Taliban.

The return of the Taliban marked the emergence of an authoritarian regime, particularly hostile towards women and minorities. The repercussions were profound, with over five million Afghans fleeing the country, and an additional three million becoming internally displaced, according to the UN refugee agency's report in July 2023. This humanitarian crisis has pushed Afghanistan to an unprecedented level of distress, with more than 18mn people, nearly half the population, grappling with severe food shortages.

Remarkably, despite the initial surge in violence, Afghanistan has seen a significant reduction in hostilities under the Taliban's rule.

Nonetheless, a persistent rivalry between the Taliban and the Islamic State-Khorasan (IS-K) group persists, with the latter being the most potent domestic challenger to the Taliban's authority. IS-K has been responsible for the majority of civilian casualties resulting from terrorist attacks within Afghanistan since the Taliban's return and has firmly established itself in the northern and north-eastern provinces.

From a regional perspective, IS-K poses an equally significant security threat to Afghanistan's northern neighbours in Central Asia. In late July 2023, the group claimed responsibility for a suicide attack in northwest Pakistan, claiming the lives of over 50 people.

However, IS-K is not the primary security concern for Pakistan. Instead, the Tehreek-i-Taliban Pakistan (TTP), a terrorist group allegedly operating from safe havens in Afghanistan, has inflicted a surge in violent attacks. According to a recent UN report, the TTP has absorbed several splinter groups and aims to regain territorial control along the Afghan-Pakistan border.

Other, more regionally oriented terrorist organizations like the Islamic Movement of Uzbekistan and the Turkestan Islamic Party have also capitalized on a permissive environment in Afghanistan. These smaller groups increasingly coordinate not only amongst themselves but also with IS-K.

China, in particular, is apprehensive that the Uyghur extremist Turkestan Islamic Party may use Afghanistan as a base for launching attacks against China and Chinese interests in the broader region.

Beyond terrorism, competition for scarce water resources presents another major source of conflict. The Taliban's plan to construct the Qosh Tepa Irrigation Canal threatens to reduce water available to Uzbekistan and Turkmenistan from the transboundary Amu Darya River by up to 15%, further straining already tense relations over water.

Water disputes also trouble Afghanistan's relationship with Tehran. There are reports of the Taliban preparing troops, including suicide bombers, for an impending conflict with Iran over water shortages, attributed to the Taliban's alleged violation of a 1973 water treaty.

Central Asia, particularly Uzbekistan, has taken the lead in integrating Afghanistan into regional trade and security frameworks, advocating for a trans-Afghan railway line.

In early August 2023, Kazakhstan hosted a Taliban delegation for a business forum, resulting in deals worth $200mn, primarily for the supply of grain and flour to Afghanistan.

The hope is that these commercial agreements, along with Afghanistan's abundant mineral deposits, including critical rare earth minerals, can serve as a foundation for normalizing relations. China has demonstrated interest by investing in Afghanistan's lithium sector, and in January 2023, Beijing and Kabul struck a deal allowing a Chinese company to drill for oil in the Amu Darya basin.

While these efforts do not equate to formal recognition of the Taliban regime, even Washington has initiated renewed engagement with the Taliban. Recent high-level talks in Doha, Qatar, have signalled an "openness to a technical dialogue regarding economic stabilization issues."