Pak-Afghan Trade Improves

By Sajjad Shaukat

Economic prosperity is the paramount for stability of any country. Afghanistan being a land locked country is mostly reliant on Pakistan for transit and bilateral trade. As per recent survey both countries have potential of trade up to $5 billion annually. In earlier quarter of 2018, although, trade with Afghanistan decreased from $3 billion to $500 million; however recent figures and trends are very optimistic and futuristic. Pakistan and Afghanistan continue to maintain upward trajectory of trade in spite of all hurdles. The Embassy of Pakistan in Kabul was pleased to report on October, 2018 that due to its well-directed efforts, Afghanistan exports to Pakistan increased by 29.53% from US$ 443 million 2017-18. Pakistan remained the largest export market for Afghanistan. On the other hand, Afghanistan continue to increase its imports from Pakistan, as Afghan imports increased from Pakistan by 18.33% for the period i.e. US $ 1,271 million in year 2016-17 to US $ 1,504 million in year 2017-18. Karachi Port also remained a major venue for Afghan transit trade as worth US $ 3.321 billion goods were imported by Afghanistan in the year 2017-18 through the port.

In this respect, Afghanistan’s largest independent news agency, Pajhwok wrote on May10, 2018, “Kabul and Islamabad have agreed on forging sustainable economic relations and taking effective measures to ensure economic activities between the neighbours. Pakistan’s National Security Advisor Nasir Khan Janjua and a business delegation from Afghanistan discussed ways of boosting bilateral economic relations and trade. At a meeting in Islamabad, both sides agreed to remove the difficulties being faced by traders to jack up Af-Pak trade volume, a statement from Janjua’s office said. A day earlier, Pakistan and Afghanistan agreed on strengthening institutional mechanisms. They stressed the need for holding of the 7th Afghanistan Pakistan Transit Trade Coordination Authority meeting. The Afghan delegation, led by Deputy Minister of Commerce Kamila Sidiqi, called on Secretary Commerce Mohammad Younus Dagha. Both two sides expressed the desire to enhance trade relations by overcoming challenges.”

However, both the countries realize that bilateral steps should be taken to improve the trade volume because these acts have direct link with prosperity and stability in the region.

In this regard, a senior official of Pakistan said on February 24, 2018 that Islamabad was committed to discuss and resolve all the outstanding issues related to bilateral and transit trade with Afghanistan.

Pakistan’s Secretary Commerce Younus Dagha in the meeting with the officials of Pak-Afghan Joint Chamber of Commerce and Industry (PAJCCI) stated, “The ministry (of commerce) is working vigorously to resolve the impediments from Pakistan side…Pakistan gives immense importance to the relationship with Afghanistan.”

In this connection, a statement of the PAJCCI said that the delegation discussed problems of customs valuation, bonded carriers, regulatory duty and quarantine and visa issues faced by businessmen from both the sides. The meeting agreed that visa regime in both the countries should be improved further by making categories: business and visit visas.

It said, “For business visa specifically, the Pak-Afghan Joint Chamber of Commerce and Industry recommendation letter should be made mandatory, so that it can authenticate the process and resolve the irritants.”

Khan Jan Alokozai, co-chairman of PAJCCI acknowledged the support of ministry of commerce and Pakistan’s government resolve to arrange 7th meeting of Afghanistan Pakistan Transit Trade Coordination Authority and bilateral ministerial meeting as soon as possible.

Zubair Motiwala, chairman of Pak-Afghan Joint Chamber of Commerce and Industry assured support and facilitation for holding Afghanistan Pakistan Transit Trade Coordination Authority meeting in Pakistan.

It is notable that South China Morning Post wrote on December 26, 2017, “China and Pakistan will look at extending their US$57 billion China-Pakistan Economic Corridor to Afghanistan, Chinese Foreign Minister Wang Yi said…part of China’s One Belt and Road plan linking China with Asia, Europe and beyond. China has tried to position itself as a helpful party to promote talks between Pakistan and Afghanistan, both uneasy neighbours. Their ties have been poisoned in recent years by Afghan accusations that Pakistan is supporting Taleban insurgents fighting US-backed Kabul to limit the influence of its old rival, India in Afghanistan. Pakistan denies that and says it wants to see a peaceful, stable Afghanistan. Speaking after the first meeting between the foreign ministers of China, Pakistan and Afghanistan, Wang said China hoped the economic corridor could benefit the whole region and act as an impetus for development…Afghanistan has urgent need to develop and improve people’s lives and hopes it can join inter-connectivity initiatives, Wang told reporters, as he announced that Pakistan and Afghanistan had agreed to mend their strained relations…So China and Pakistan are willing to look at with Afghanistan, on the basis of win-win, mutually beneficial principles, using an appropriate means to extend the China-Pakistan Economic Corridor to Afghanistan…The successful implementation of CPEC [China-Pakistan Economic Corridor] projects will serve as a model for enhancing connectivity and cooperation through similar projects with neighbouring countries, including Afghanistan, Iran and with central and west Asia”, he added.”

South China Morning Post wrote on December 26, 2017, “Hosting his Afghan and Pakistani counterparts, Foreign Minister Wang Yi announced China wanted to include Afghanistan in the China-Pakistan Economic Corridor. At around the same time, one of the messages to emerge from the Afghan defence minister’s visit to Beijing suggested that China was going to invest in a security force in Badakhshan province…it is good that China is increasing the positive public announcements around its engagement with Kabul, 2018 needs to be the year that China follows through on its rhetoric and takes a greater leadership role in Afghanistan…It also reminded Beijing the glaringly obvious fact that chaos in Afghanistan was something which would have direct ramifications on China. Unlike the US, on another continent, China shares a direct border with Afghanistan. Going forwards, China should focus its efforts on a two-pronged effort which focuses on delivering meaningful economic investment into the country and consolidating and leading peace efforts…On economic investment, Beijing needs to make sure greater investment with local benefits materialises in the country. So far, aid projects have been delivered, alongside some infrastructure investment. Both of these are hugely positive and necessary…China already provides some support to Afghan security forces…Finally; Beijing should use its growing regional clout to try to bring some order and coherence to the many different regional institutions that have been developed around Afghanistan’s future. The Shanghai Cooperation Organisation, the Conference on Interaction and Confidence-Building Measures in Asia, the Istanbul or Heart of Asia Process, the South Asian Association for Regional Cooperation and more have all held varying levels of engagements in Afghanistan. And China itself has created or taken part in a growing constellation of bilateral, trilateral, regional and more forums which focus on Afghanistan.”

It is mentionable that India which has already invested billions of dollars in Afghanistan, signed a wide-ranging strategic agreement with that country on October 5, 2011 also includes to help train Afghan security forces, while assisting Kabul in diversified projects. Apparently, it is open strategic agreement, but secretly, India seeks to further strengthen its grip in Afghanistan to get strategic depth against Islamabad. As part of the double game, the US which wants to counterbalance China is also supporting New Delhi in this regard.

Notably, as part of the animosity against Pakistan, Indian government was exerting pressure on the business men and industrialists to hasten the move and subsidized Indian wheat which would drive Islamabad out of the Afghan markets. Besides, New Delhi gave general subsidy on farm inputs, which makes the Indian wheat cheaper as compared to Pakistan, while, India also offered a specific $50 per ton additional subsidy to exporters, thus driving the price further down.

It is noteworthy that Afghanistan which is in the phase of transition, moving from crisis to stability, has expressed a strong desire to join the multi-billion economic opportunity of the CPEC, when in October 2016, Afghan Ambassador to Pakistan, Dr Omar Zakhilwal, emphasized upon his country’s interest in joining the CPEC. However, a year later, Afghan President Ashraf Ghani’s disappointing statement regarding Kabul’s joining of the Indian venture Chabahar Port, gave a setback to the earlier progressive and pragmatic approach of the Afghan nation.

While, as a landlocked, terrorism and militancy prone nation, Afghanistan is in desperate need of infrastructural development and uplifting its economy. Thus, if Kabul joins the CPEC, an ideal environment of trilateral cooperation can be developed in the region which can benefit all parties involved. Besides, Afghanistan can, particularly, gain enormously by not only benefiting from this Chinese investment, but also can have active role of both Beijing and its strategic partner Islamabad in bringing stability and peace in Afghanistan.

When Gwadar seaport becomes fully operational, it would connect the landlocked Central Asian states with rest of the world. Being the commercial hub, the port is likely to increase volume of trade, bringing multiple economic and financial benefits to Pakistan and China. It will enable high-volume cargo vessels to move in the major oceans by giving easy access to the Persian Gulf and the Indian Ocean.

In this context, CPEC is predicted to bring industrialization and investment to Pakistan, the carry-over effects of which will obviously benefit neighboring Afghanistan also. Unlike the Chabahar project, the CPEC is wider project, between deep Gwadar seaport of Balochistan and the historic Silk Road city in western regions-Xinjiang of China. Beijing would also build an international airport at Gwadar, while the roads infrastructure in Gwadar would link the communication network of rest of the country to facilitate transportation of goods. The connected roads will enable Afghan businessmen and investors to access the enormous consumer markets in South Asia, thereby increasing Afghanistan’s exports and reducing the costs of imports. CPEC can bring the three nations under a common economic, commercial and industrial umbrella which, in turn, can ensure joint efforts for peace, security and stability in Afghanistan.

Afghan nation must also take cognizance of the fact that Kabul is 1237 km. away from Gwadar, whereas the distance between Kabul and Chabahar is 1840 km. It means Gwadar is more suitable for Kabul, because, it is more than 600 km. nearer to it as compared to Chabahar. Gwadar is much more a beneficial route for the Afghanis with suitable logistic expenses.

Undoubtedly, CPEC is likely to prove as the game-changers in the region, therefore, based in Afghanistan, intelligence agencies such as American CIA, Indian RAW and Israeli Mossad are assisting terror-outfits so as to destabilize various regions of Pakistan, especially Pakistan’s Balochistan and Iranian Sistan-Baluchistan.

It is mentionable that the American President Trump has withdrawn from the Iran nuclear deal and is following war-mongering diplomacy against Tehran by imposing and toughening sanctions, while Israel is also doing the same against Iran.

Meanwhile, the US has decided to grant India a waiver from Iran sanctions, which would allow Indian oilNSE 4.51 % companies to continue to import about 1.25 million tonnes of oil a month till March from Tehran. Washington also re-imposed oil-related sanctions on Iran on November 4, this year.

While, in the recent past, after the visit of the US Secretary of State Mike Pompeo to Islamabad and visit of Pakistan’s Foreign Minister Shah Mahmood Qureshi to America, positive change has occurred between the strained relations of the US and Pakistan. Now, ties between the two countries are improving. Positive change in Pak-US relationship has resulted into positive change between Afghan-Pakistan ties. Therefore, Kabul has re-opened Pakistan consulate in Jalalabad. These developments have also irritated India.

Despite these developments, Pakistan has inclined towards the Russian Federation which also needs the latter. Particularly, the US-led secret strategy which is part of Zionist-led American double game compelled Pakistan to fortify its relations with Russia. In this respect, an agreement has been signed on August 7, 2018 between Islamabad and Moscow for training of Pakistani troops in Russia, decided at culmination of first meeting of joint Military Consultative Committee (JMCC) in Islamabad. Pakistan’s defence ties with Moscow are growing strong with each passing day and this pact has opened new avenues of cooperation between the two countries. A desire from both sides has already been seen in the near past in boosting economic and political relations, including military cooperation. Obviously, these moves are seen with suspicion by the US and India, including Israel.

On September 27, this year, Pakistan and Russia signed a historic $10 billion offshore gas pipeline agreement in Moscow. The project will help Russia cement its place in the energy market of Pakistan. Under the agreement, Inter State Gas Systems (ISGS), a state-owned Pakistani company, will collaborate with Russia’s energy giant Gazprom, to execute the mega project. Pakistan will import some 500 million to 1 billion cubic foot of gas from Russia daily, which would be transported via sea link. The pipeline will connect Pakistan and Russia and act as an energy corridor between the two countries. After the agreement, Islamabad will gain access to the Russian market in order to boost its overall exports which remained stagnant during five-year tenure of the previous government.

A report quoted SGS Managing Director Mobin Saulat as saying that the, “China-Pakistan Economic Corridor (CPEC) has now entered the industrialization phase and needs gas for duty and tax-free Special Economic Zones (SEZs). The offshore gas pipeline will meet energy needs of industries being set up in the economic zones along CPEC route.”

These projects are being termed the game changer for Pakistan, as they will not only lead to regional connectivity, but will also meet growing energy needs of the country.

Islamabad, Moscow and Beijing share common opinion that the presence of US and NATO forces in Afghanistan failed to restore stability in that war-torn country.

As new alliance of Russia, China, Pakistan and Turkey is emerging to check the influence of the US in Afghanistan and the Middle East, therefore, Iran could abandon the US-backed India-Afghanistan Chabahar project and could join the CPEC project.

There is a co-relationship of political and economic instability in the region in wake of terrorism. Hence, instead of following the US-led Indian blame game of cross-border terrorism against Pakistan, Afghan rulers must better create political stability in their war-torn country, which is essential for the economic development of their country as well as poor masses. In these terms, it is good sign that trade between Pakistan and Afghanistan is improving.

Sajjad Shaukat writes on international affairs and is author of the book: US vs Islamic Militants, Invisible Balance of Power: Dangerous Shift in International Relations

Email: sajjad_logic@yahoo.com