KARACHI: Pakistan Business Forum (PBF) Central Vice President Ahmad Jawad has said that 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.
Talking to this scribe, he said India lacks a direct land connection with Afghanistan, and trade between India and Afghanistan relies on transit corridors facilitated by Pakistan under the Transit Trade Agreement. Pakistan provided the trade provision to Afghanistan under 1965 trade agreement, replaced in October 2010 with an agreement providing better trade facilities to Afghanistan with India.
Pakistan has security concerns over India, as Indo-Afghan trade will reduce Pakistan’s imports of goods. Growing Indian presence in the form of huge investment in Afghanistan has threatened Pakistan’s security. Trade has great potential for Pakistan, India, and Afghanistan but security and sincerity are required for implementation of such agreements, he said.
Jawad said between 2010 and 2020, the trade volume between Pakistan and Afghanistan curtailed from $1.5 – $2 billion to $870 million in 2020 after staging a negligible comeback in 2023 with bilateral goods exchange amounting to $1.8 billion.
The small recovery in the bilateral trade between Pakistan and Afghanistan has been due to increased Afghan exports, particularly coal to Pakistan.
Islamabad has been a net loser in the bilateral trade with Afghanistan as is evident from the figures. Data for 2010 to 2020 shows that Pakistan’s imports from Afghanistan increased by 62.7% and export declined drastically by 200%. There have been fundamentally strategic security and politically oriented reasons for this situation, he said.
In order to decrease dependence on Pakistan, Afghan regimes, including that of Ashraf Ghani and even after him the Taliban, focused on the alternative transit trade route through Iran, Chahbahar seaport. The Iranian seaport of Chabahar is located 172.2 km away from Gwadar. It is important to note that Pakistan’s Gwadar Seaport has its operational control with China while Chahbahar is run by India. Thus Afghanistan for its own strategic security and political reasons tried to increase its reliance upon Iran in order to curtail dependence on Pakistan. Because in Kabul’s calculation (over)reliance on Pakistan gives Islamabad ‘undue’ strategic leverage over it, he said.
On the other hand, Iran for its own economic and political reasons offered its territory and seaports to Afghanistan so as to increase its own exports to Afghanistan and through its political influence in Kabul.
India completely facilitated Afghanistan and Iran so that the latter provide an alternative trade route to Kabul because that would bypass Pakistan. India since long has been desirous of Pakistan providing the critical overland connectivity to her to Afghanistan and beyond to Central Asia. However, Pakistan has been hesitant to do so fearing that would increase further the political clout of Delhi in the region at the altar of Pakistan, says Jawad.
On its part Pakistan has been using its strategic geographical location vis-à-vis landlocked Afghanistan to exercise influence over Afghanistan. But historically, Afghanistan has been the country which started a kind of unnecessary rivalry with Pakistan when, in 1947, it objected to Pakistan’s application for membership of the United Nations, he said.
Kabul’s contention then and now is that Pakistan was in possession of ‘Afghan’ territory, referring to Pashtun-inhabited Khyber Pakhtunkhwa and Upper Balochistan. Thus in order to keep Afghanistan in check, Pakistan has been using the economic lever of Afghan transit trade through Pakistan. Nevertheless, Afghanistan has benefited immensely of its transit trade agreements with Pakistan. Pakistan’s concerns about smuggling back of Afghan imports through Pakistan to its territory has been inflicting massive losses on its economy have been very genuine.
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