Smuggling impeding Pak-Afghan trade

| Businessmen suggest removal of barriers, stricter check on illegal trade

ISLAMABAD - The Khyber Pass, being an integral part of the Silk Road, has historically been an important pathway between the sub-continent and Afghanistan. This pass, among other routes between Afghanistan and Pakistan, has thus proven to be of great use for smugglers moving goods in and out of Pakistan and Afghanistan.
“Afghanistan is a landlocked state, and thus needs to use its neighbours for trade”, says an employee of a multi-national company operating in Afghanistan through Pakistan. He states that out of Afghanistan’s six neighbours, Pakistan and Iran are the most convenient for international trade to operate.
“Iran is the more reliable option”, he states. The Afghan traders prefer goods being brought in from the Banderabas port into Islam Qala from where they are moved into the rest of the country. However, it is more expensive in terms of logistics and freight.
“Karachi is the shortest route,” continues the employee. There are two openings into Afghanistan from Karachi. One is through Quetta into Kandahar, the second is through Torkham into Jalalabad and connecting to Kabul. According to the employee, Karachi ends up being shorter and cheaper for Afghanistan, however because of Pakistan’s political instability, and there being no reliable regime that will manage trade with Afghanistan, it ends up being the less preferred option.
However, this is not the only hindrance with regards to trade with Afghanistan. The Afghan “Gumrak”, the tariff levied on imports in Afghanistan, has recently been raised in order to protect local businesses. Thus it is expensive for foreign companies to trade in Afghanistan, “through the legal way”.
“There is a parallel economy consisting of unregistered smuggled products,” says the employee. However, “big local and multi-national companies avoid these illegitimate means of importing goods.” Managing the competition from the traders using this parallel economy becomes very difficult, and it is this parallel economy that proves to be the biggest hurdle for these companies.
“The smuggling is on both sides,” states a Pakistani tradesman dealing between Afghanistan and Pakistan. According to the tradesman, many goods are smuggled through Mir Ali in North Waziristan. “The Political Agent issues a permit that allows the smugglers to transport goods across the border, and is done very obviously. These Political Agents are in a very lucrative position,” states the tradesman.
The tradesman also stated that a lot of Afghan items are smuggled into Pakistan. “The FC and local law enforcement are involved in this smuggling, and are paid a “Mahwari” (monthly amount) openly on main streets at night,” he states. “According to Afghanistan’s official statistics, legally imported goods from Pakistan are worth $2.1 billion annually, while smuggled goods into Afghanistan makes up to $300 million annually.”
Meanwhile, according to the tradesman, it is estimated that up to $550-600 million worth of goods are smuggled into Pakistan from Afghanistan annually.
Farid, an owner of a general store in Peshawar’s famous Sitara Market where many people buy goods smuggled from Afghanistan, confirms the methods described by the aforementioned tradesman in smuggling goods into Pakistan from Afghanistan, stating that the law enforcers at check-posts are paid off, and they allow the goods to enter.
However in recent times it has become more difficult for smugglers to get things in due to security reasons, in regards to the Taliban. As a result, fewer goods (both legitimately and illegitimately) enter Pakistan through Afghanistan. “Because of the difficulty in obtaining goods from Afghanistan, most shopkeepers get products from Karachi, Lahore and Rawalpindi, however less profit is made on these products”, he states.
Zahir, another store owner who deals in many American goods in Sitara Market states that it is not only the law enforcers who are profiting off of goods smuggled into Pakistan through Afghanistan. “One pays a custom official on the border who grants access to the smuggler into Pakistan to move the products anywhere in the country”. He states that the same is the case when smuggling goods into Afghanistan. Zahir comments however that because of the recent security threats in regards to the Taliban, smuggling has decreased, and previously one could receive their smuggled goods in under a week. Now one is lucky if it takes less than a month.
The route from Karachi to Afghanistan could result in being one the “biggest economic corridors in the world,” stated the employee of the multi-national company. “This route would go through Afghanistan, resulting in the whole of Central Asia, Russia and Europe opening up to Pakistan.”
The Afghanistan-Pakistan Transit Trade Agreement was drafted in 2010, which allowed Pakistani vehicles to move products to every corner of Afghanistan, and allowed Afghanistan to move its products up to Wagah border and the Karachi port. However, according to the aforementioned tradesman, the agreement has not been implemented properly.
“Pakistan’s finance ministry should talk with Afghanistan’s and make a joint strategy to stop the illegal trade,” states the tradesman. “Both sides must be honest with one another, however, there is a lack of cooperation between the two countries... If the Pakistan government helps the Afghan government with transit trade, both countries can benefit,” pointed out the employee of the multi-national company.

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