KARACHI: Pakistani traders this week expressed confidence bilateral trade with Afghanistan would increase after Islamabad announced it would open additional border crossings, saying a comprehensive mechanism for barter trade with Kabul had been devised and would be implemented “within the next few days.”
Pakistan’s special representative for Afghanistan, Mohammad Sadiq, announced on Monday Islamabad had decided to open new border crossings with Afghanistan in addition to five fully operational existing border crossings at Torkham, Ghulam Khan, Kharlachi, Angoor Adda and Chaman-Spin Buldok and one partially opened Dalbnadeen crossing.
“Trade volume is expected to increase after border openings,” Zubair Motiwala, the chairman of the Pakistan Afghanistan Joint Chambers of Commerce and Industry (PAJCCI), told Arab News on Tuesday, saying the barter trade mechanism would be implemented “within the next few days.”
“There are no banking channels functional at the moment and the border crossings are being opened to enhance barter trade between Pakistan and Afghanistan,” Motiwala said. “So far the comprehensive mechanism for barter trade has not been announced, which is needed for increasing bilateral trade in the absence of an international banking system in Afghanistan.”
The flow of Afghan transit trade and Pakistani exports to Afghanistan saw a steep drop after the Taliban seized control of Kabul in August 2021 in the wake of the withdrawal of United States and allied forces.
Exports from Pakistan stood at $990 million compared to imports worth $185 million during the last fiscal year, FY21, but suffered in the first quarter of the current fiscal year, FY22, according to PAJCCI data. The flow of cargo fell by 16 percent in August 2021 and saw a further decline of 73 percent in September from last year due to political uncertainty in the wake of the Taliban takeover.
The flow of cargo dipped 73 percent to 4,212 containers in September 2021 from 15,846 containers in the same month last year. In August 2021, container flow fell to 7,864 containers from 9,312 containers last year, indicating a decline of 16 percent, PAJCCI data showed.
In April 2021, the flow of transit cargo had posted growth of 169 percent, followed by a 115 percent increase in May 2021, 32 percent in June 2021, and 60 percent in July 2021 respectively, prior to the takeover by the Taliban, after which bilateral trade dropped below $1 billion.
Pakistan exported goods worth $340 million to Afghanistan and imported goods worth $122 million between September 2021 and April 2022, according to the central bank of Pakistan.
Kabul is facing severe financial problems since the Taliban takeover which prompted foreign governments, led by the United States, to cut development and security aid, and the strict enforcement of sanctions has debilitated the country’s banking sector.
The World Bank said last month the outlook for Afghanistan’s economy was dire with per capita income having fallen by over a third in the last four months of 2021.
“One of the poorest countries in the world has become much poorer,” Tobias Haque, World Bank Senior Country Economist for Afghanistan, had said.
“The isolation of the Afghan economy following last August’s political crisis risks...leading to grave poverty, displacement, fragility, and extremism threats,” he told a briefing in April for the release of the World Bank’s first development update on the country since August.
The World Bank update said that incomes had dropped so starkly that around 37 percent of Afghan households did not have enough money to cover food while 33 percent could afford food but nothing more.
A Taliban failure to meet Western conditions, in particular access to education for all girls, has led the international community to withhold international assistance and keep financial sanctions in place, with exceptions for humanitarian aid.
