Pakistan Economic Cooperation with Afghanistan and Central Asia

Pakistan Economic Cooperation with Afghanistan and Central Asia

Partners: IM Sciences Peshawar, Ministry of Finance, Ministry of Commerce, Afghanistan Information Management Services

Duration: September to December 2014

Locale: Balochistan and Khyber Pakhtunkhwa

Team Members: Dr Vaqar Ahmed,Dr yasir Kamal, Saad Shabir, Nohman Ishtiaq, Sameem Akhtar, Asif Javed,Wahab Farooq, Sadika Hameed

Objective:

• Economic opportunities and major challenges in post 2014 Afghanistan and their impact on Pakistan and other actors in Central Asia. The term ?actors? here is not limited to states or their institutions. We are also interested to look into the efforts of multilateral organizations and the private sector in the region.
• Review estimates from recent studies highlighting expected changes in Afghanistan-Pakistan commercial and transit (commercial & non-commercial) trade flows following ISAF drawdown in Afghanistan.
• Review current arrangements and future possibilities of strengthening bilateral trade arrangements/agreements between Afghanistan and Pakistan.

Concept: This project is being initiated at a point when both governments (Afghanistan and Pakistan) have vowed to pursue trade and investment cooperation and link these efforts with the wider politico-economic developments in Central Asia. These developments include recent initiatives such as CASA, CAREC, Heart of Asia Process, New Silk Road Initiative and upcoming SAARC and ECO summits. In the post NATO exit milieu, any disturbance that deteriorates the political relations between Afghanistan and Pakistan will result in: reduction of the formal bilateral trade, reduced commercial transit, possible increase in IDPs and refugees flowing from Afghanistan to Pakistan, and a rise in terror threat to the Pakistani population neighboring Afghanistan. As we will show latter that many have come out of chronic and transient poverty as a result of increased trade with Afghanistan, however under the scenario where NATO cargo is finished and there is a reduction in formal trade (if any) this population is poised to slip below the poverty line. It is against this idea that we aim to analyze the impact of Afghanistan transition on the economy of Pakistan, Balochistan and Khyber Pakhtunkhwa in particular. Activities:

• Eield survey for data collection conducted in all provinces.
• Seminar held.

Findings:

• Illegal means, negligence of government and poor infrastructure is becoming an impediment in the way of free flow of trade between Pakistan and Afghanistan.
• Closure of trains to Chaman increased the time and cost of production, as traders ?have to rely on road network, which is not yet developed properly.
• Customs house at Chaman lack basic facilities such as electronic scanning; ?Not enough space is available there to facilitate a large number of trucks at a time.
• Business community ?demands that the government, besides improving law and order situation in the country, should improve relation with Afghanistan ?so as to strengthen economic ties ?with the neighbouring country.