Pak-Afghan border: Unrestricted smuggling hampers economic growth
Tyre industry alone suffering billions of rupees in losses.
Tyre industry alone suffering billions of rupees in losses. CREATIVE COMMONS
KARACHI:
At a time when Pakistan is making all-out efforts to secure the Afghan border after the deadly Peshawar school attack, the state is doing little to control rampant smuggling through the porous border.
For years, successive governments have tried to shield themselves from criticism by arguing that the Afghan border is porous and ungovernable. Therefore, the state cannot “fully control” the smuggling that takes place through these frontiers.
In the past couple of months, after the December school attack, the government has tried to improve the security on the border. However, nothing has changed for the good of Pakistan’s economy.
Industries and businesses have been relentlessly demanding a strong clampdown against smuggling, especially against the institutionalised one under the Afghanistan-Pakistan Transit Trade Agreement (APTTA).
A few months ago, Finance Minister Ishaq Dar and his counterpart in Afghanistan agreed to take documented bilateral trade between the two countries to $5 billion in two to three years. The current official trade between the two neighbours is over $2.5 billion.
According to rough estimates, the smuggling or undocumented trade through Pak-Afghan border is causing over $3 billion annual loss to Pakistan’s economy and the figure is still growing.
Burning rubber
There are hardly few things under the sun that are not illegally traded or smuggled through that border. However, let us take the example of rubber tyres.
According to tyre-makers in Pakistan, approximately over 200 trucks loaded with tyres enter into Pakistan every day. What is astonishing is that these trucks come from proper trade routes of Chaman and Landi Kotal and yet they find their way into big cities without any hassle.
Contrary to government claims, cross-border smuggling is still growing, causing losses of billions of rupees to the tyre industry alone. Tea, cigarettes and electronics industries are some of the few that consistently point towards smuggling through Afghan borders for their below par performance each year in their annual reports.
“Our frustration with this government is growing with each passing month. We thought this government would take measures to curb smuggling and under-invoicing that is killing local industries, especially the tyre industry,” said an official of a tyre manufacturing company.
There are few companies that produce motorcycle tyres in Pakistan, but there is only one tyre-maker in the passenger car category – General Tyre and Rubber Company (GTR).
GTR meets 23% of the total tyre demand in the country, while according to industry estimates, the country imports 40% of the tyres from different countries. The remaining 37% of the market share is in the hands of tyre smugglers who mainly use Chaman and Landi Kotal routes to bring in used and refurbished tyres into Pakistan.
After the Peshawar school attack, numerous international organisations have reported that Pakistan has significantly tightened up security at the Pak-Afghan border. With security being tightened, the economy should not be overlooked. It is also an irrefutable fact that smuggling and illegal trade, especially of drugs, is directly or indirectly linked with different forms of terrorism in this volatile region.
Industry officials in Pakistan’s private sector are convinced that the successive governments have deliberately overlooked this issue. They believe this government has all the resources to control it but it does not have the will to do it.
Businessmen say the more Pakistan controls smuggling, the more investments it can attract into the country because no properly documented and taxpaying industry can compete with this smuggling.
At the Pakistan Customs Day held recently, a Customs official claimed that they have been able to significantly curtail the smuggling of tyres into the country. However, he did not give any figures to substantiate his claim.
the writer is a staff correspondent
Published in The Express Tribune, February 23rd, 2015.
At a time when Pakistan is making all-out efforts to secure the Afghan border after the deadly Peshawar school attack, the state is doing little to control rampant smuggling through the porous border.
For years, successive governments have tried to shield themselves from criticism by arguing that the Afghan border is porous and ungovernable. Therefore, the state cannot “fully control” the smuggling that takes place through these frontiers.
In the past couple of months, after the December school attack, the government has tried to improve the security on the border. However, nothing has changed for the good of Pakistan’s economy.
Industries and businesses have been relentlessly demanding a strong clampdown against smuggling, especially against the institutionalised one under the Afghanistan-Pakistan Transit Trade Agreement (APTTA).
A few months ago, Finance Minister Ishaq Dar and his counterpart in Afghanistan agreed to take documented bilateral trade between the two countries to $5 billion in two to three years. The current official trade between the two neighbours is over $2.5 billion.
According to rough estimates, the smuggling or undocumented trade through Pak-Afghan border is causing over $3 billion annual loss to Pakistan’s economy and the figure is still growing.
Burning rubber
There are hardly few things under the sun that are not illegally traded or smuggled through that border. However, let us take the example of rubber tyres.
According to tyre-makers in Pakistan, approximately over 200 trucks loaded with tyres enter into Pakistan every day. What is astonishing is that these trucks come from proper trade routes of Chaman and Landi Kotal and yet they find their way into big cities without any hassle.
Contrary to government claims, cross-border smuggling is still growing, causing losses of billions of rupees to the tyre industry alone. Tea, cigarettes and electronics industries are some of the few that consistently point towards smuggling through Afghan borders for their below par performance each year in their annual reports.
“Our frustration with this government is growing with each passing month. We thought this government would take measures to curb smuggling and under-invoicing that is killing local industries, especially the tyre industry,” said an official of a tyre manufacturing company.
There are few companies that produce motorcycle tyres in Pakistan, but there is only one tyre-maker in the passenger car category – General Tyre and Rubber Company (GTR).
GTR meets 23% of the total tyre demand in the country, while according to industry estimates, the country imports 40% of the tyres from different countries. The remaining 37% of the market share is in the hands of tyre smugglers who mainly use Chaman and Landi Kotal routes to bring in used and refurbished tyres into Pakistan.
After the Peshawar school attack, numerous international organisations have reported that Pakistan has significantly tightened up security at the Pak-Afghan border. With security being tightened, the economy should not be overlooked. It is also an irrefutable fact that smuggling and illegal trade, especially of drugs, is directly or indirectly linked with different forms of terrorism in this volatile region.
Industry officials in Pakistan’s private sector are convinced that the successive governments have deliberately overlooked this issue. They believe this government has all the resources to control it but it does not have the will to do it.
Businessmen say the more Pakistan controls smuggling, the more investments it can attract into the country because no properly documented and taxpaying industry can compete with this smuggling.
At the Pakistan Customs Day held recently, a Customs official claimed that they have been able to significantly curtail the smuggling of tyres into the country. However, he did not give any figures to substantiate his claim.
the writer is a staff correspondent
Published in The Express Tribune, February 23rd, 2015.