Before the Soviet invasion of Afghanistan on December 27, 1979, a study of the economic relations between the two countries might have been based on the proposition that each country would maximize the gains to itself from the set of economic transactions consisting of bilateral trade, transit trade, and capital assistance to Afghanistan, its term structure, and repayment rates and schedule. Further, it could have been argued that the division of the gains from these transactions would have been a function of the demand and cost conditions in each country, as well as the relative bargaining positions of a small versus a large country, which could have been influenced by the availability of alternative sources for commodity trade and the supply of capital from the rest of the world.