Economic cost of the AfPak tiff
The business community is suffering heavily because it is unable to complete transactions promised under pacts
In a knee-jerk reaction, the Pakistani authorities closed the border between Pakistan and Afghanistan following the attack on the Lal Shahbaz Qalandar’s shrine in Sehwan on February 16. As Pakistan believes terrorists who carry out attacks in the country have sanctuaries in neighbouring Afghanistan, it decided to choke the travel route for all kinds of movement. While this blanket move might be useful in curbing terrorists from entering Pakistan, it also prevents trade, transport and civilians from crossing over to both sides.
As for trade, Afghan officials have claimed the border blockade has resulted in losses worth billions of rupees as around 6,000 trucks carrying goods are stranded on both sides of the border. To Pakistan’s worry, 80% of the losses are believed to be incurred by Pakistani exporters. The business community, which regularly pays taxes as well as bribes to continue trade, is suffering heavily because it is unable to complete transactions promised under pacts such as the Afghanistan-Pakistan Transit Trade Agreement, World Trade Organisation and Saarc agreement. What is worse is that the traders don’t know when the border will reopen, leaving them uncertain of their fate.
Afghanistan depends on Pakistani products like food items and purified water for sustenance while its farmers earn a living exporting fresh food items like fruits to Pakistan. The border closure is hurting these people and their livelihood. And, while Afghanistan’s small economy of just $20 billion doesn’t make a viable business case for Pakistan, the country is the gateway to Central Asian markets which Pakistan has long been interested in. Good business ties coupled with stable political relations are important if Pakistan wants to realise this economic dream. With this border closure, the innocent people are suffering for acts they have no role in; had Pakistan and Afghanistan worked beforehand on a proper system to address the issue of their porous border, common people such as traders would not be bearing the brunt of the unstable security situation.
Published in The Express Tribune, March 1st, 2017.
As for trade, Afghan officials have claimed the border blockade has resulted in losses worth billions of rupees as around 6,000 trucks carrying goods are stranded on both sides of the border. To Pakistan’s worry, 80% of the losses are believed to be incurred by Pakistani exporters. The business community, which regularly pays taxes as well as bribes to continue trade, is suffering heavily because it is unable to complete transactions promised under pacts such as the Afghanistan-Pakistan Transit Trade Agreement, World Trade Organisation and Saarc agreement. What is worse is that the traders don’t know when the border will reopen, leaving them uncertain of their fate.
Afghanistan depends on Pakistani products like food items and purified water for sustenance while its farmers earn a living exporting fresh food items like fruits to Pakistan. The border closure is hurting these people and their livelihood. And, while Afghanistan’s small economy of just $20 billion doesn’t make a viable business case for Pakistan, the country is the gateway to Central Asian markets which Pakistan has long been interested in. Good business ties coupled with stable political relations are important if Pakistan wants to realise this economic dream. With this border closure, the innocent people are suffering for acts they have no role in; had Pakistan and Afghanistan worked beforehand on a proper system to address the issue of their porous border, common people such as traders would not be bearing the brunt of the unstable security situation.
Published in The Express Tribune, March 1st, 2017.