Pakistan-Afghanistan trade in continuous, unexpected decline

In a surprising twist, Pakistan-Afghanistan relations have deteriorated over the past few years after a lot of optimistic chatter and expectations regarding a renewal of contacts and visible signs of improvement after the Afghan Taliban re-took the country three years ago. What has been observed since then is quite the opposite.

Widespread anger has erupted toward Pakistan from the Afghan side because of the fencing of the border, which has cut off trade and disrupted families. There have been restrictions on the movement of people requiring Afghans, including refugees, to carry passports and valid visas for entering or leaving Pakistan. This has gravely impacted the volume of bilateral trade between the two countries.

Trade cannot remain unaffected or isolated from tensions at the border or from gross mismanagement. From a high of $2.2 billion in 2017-18, bilateral trade has dropped to less than a billion USD. This has meant damaging implications for traders and transporters in both countries besides causing hardships to millions of customers on both sides.

There are obvious reasons for such a drastic decline in trade. The introduction of passport and visas replacing the age old system of permitting people to cross over on the basis of identity cards is one big reason for the drop in bilateral trade. The Pakistani missions in Afghanistan simply cannot issue visas to hundreds of people every day! Instead, people have to wait for months before they get a visa for a limited period. Then there is the constant problem of long delays in the clearance of goods at Torkham and Chama– the two main crossing points. Because of minor administrative issues, trucks are held up for days and this results in the destruction of perishable goods like vegetables and fruits. Traders have to suffer huge losses as a result. 

The two countries have chosen to ignore the ground realities and the cost they would entail. The stalemate must be broken.

Rustam Shah Mohmand

In the past, border management was the responsibility of the local administration. Now control rests entirely in a transport company— NLC or the National Logistics Cell. Many different agencies are involved in the clearance of trucks, goods and drivers. There are widespread complaints of transporters being asked to pay a substantial amount of money before being cleared for crossing the border. This has added to the frustration and despair. The levy of high taxes on goods imported from Afghanistan is yet another reason for the drop in bilateral trade. The traders complain that at such a high cost they are unable to import many items because it is no longer profitable.

Even as the decline in trade has affected such a large number of people on both sides of the border, it seems the government in Islamabad has no time to seek solutions by reaching out to Kabul. There is this inexplicable indifference to the vital issue. At a time when the Taliban government is seeking to engage with the world and finding willing partners to deepen economic contacts, Pakistan is ignoring the costs and benefits of an overhaul of its policy toward its Western neighbor. At stake for Pakistan is the Turkmenistan gas pipeline project— a mega project that could transform lives. At stake is the import of electricity from Tajikistan and the China–Pakistan Economic Corridor (CPEC) which can deliver its potential benefits only if Afghanistan is fully on board.

Afghans have been complaining of long delays in the clearance of goods at Karachi and Gwadar ports. The issue has not yet been addressed. Pakistan has not allowed trade between Afghanistan and India through its territory. This issue has not been resolved. Allowing the transit facility to Afghanistan would have created a very favorable environment for the eventual normalization of relations between arch rivals India and Pakistan. In fact, policy makers in Pakistan have viewed with great concern the tangible improvement in relations between Afghanistan and India. This attitude has to be abandoned if Islamabad wishes to earn the goodwill of the Kabul government. As relations strained, Kabul had to seek new avenues for trade and investment. China has increased its investment in mining, petroleum and other sectors. So have the countries of Central Asia. Afghanistan is focusing on using the Chabahar port for trade with India. Kabul’s trade with Iran has shot up and is growing. Because of Chabahar –the Iranian port, the potential for trade with India has gone up enormously.

While these regional developments offer a better future for a country where millions are hungry, where unemployment is at a record high, where people are desperate to leave the country, Islamabad sadly has chosen to be an observer only. This has deepened suspicions in the minds of the Taliban leadership who have many other grievances with the country. Pakistan also has grievances, but the two countries have chosen to ignore the ground realities and the cost they would entail. The stalemate must be broken if further damage to a critical relationship is to be avoided.

– Rustam Shah Mohmand is a specialist of Afghanistan and Central Asian Affairs. He has served as Pakistan’s ambassador to Afghanistan and also held position of Chief Commissioner Refugees for a decade.