Pakistani traders expect better business with Afghanistan under Taliban-led government

Afghans walk through a security barrier as they enter Pakistan through a border crossing point in Chaman, Pakistan, on Thursday. Pakistanis and Afghans cross the border daily. (AP)

• Business leaders see improved business environment after new, inclusive govt

KARACHI: The Taliban’s takeover of Afghanistan could prove beneficial for trade with Pakistan, members of the country’s business community have said. 
The chairman of the Pakistan-Afghanistan Joint Chambers of Commerce said he believed Pakistani traders would be able to “capture” the Afghan market after a new government was formed in the neighboring country.
In a matter of weeks, the Taliban have seized most of Afghanistan as well as any weapons and equipment left behind by fleeing Afghan forces. They also control border crossings with Pakistan at Torkham and Chaman, from where most trade between the two countries takes place.
Last week, Pakistani traders said commercial traffic across the Spin Boldak/Chaman crossing had picked up as the shock of the Taliban’s lightning seizure of power began to ease and confidence returned.
They said truckloads of agricultural produce from Kandahar province were being driven across the border, a sign that trade was beginning to return to normal. Movement was strong in both directions.
Zubair Motiwala, chairman of the Pakistan-Afghanistan Joint Chambers of Commerce and Industry, told Arab News he expected a change of regime in Afghanistan to be “transformative” in terms of trade policy.
“It will be easier for us to travel to Afghanistan more frequently to make investments,” he said. “Our money will be more secure, and we will be in a better position to capture the market after the government is fully formed in Kabul.”
Years of violence, instability and corruption have crippled Afghanistan’s economy, making it difficult for businesses to flourish and keeping much of the population impoverished.
Pakistani business leaders like Motiwala are now pinning their hopes on a more peaceful and stable Afghanistan and a better business environment once a new government is formed. They believe trade with Pakistan was not a priority for the last government of President Ashraf Ghani, which was considered close to Pakistan’s arch-rival India. Businessmen hope that the Taliban, who have long maintained close ties with Islamabad, will be more open to business.
Motiwala also said rampant corruption, endless conflict between warring factions and control of many areas of the country by militias and warlords had hindered trade with Pakistan in the past. But things were already changing, he said.
“Trade has already increased with enhanced movement of containers at the border,” the businessman said.
‘200 percent increase’
An association of oil tanker owners in Pakistan reported a more than 200 percent increase in the movement of trucks across the country’s border with Afghanistan since the Taliban takeover.
“During the reign of the previous administration, about 70 to 80 vehicles would cross the borders from both sides, but the number has now increased to about 250 trucks a day,” the association’s spokesperson, Israr Ahmed Shinwari, told Arab News. “The process of clearance at borders has also become easier and our cost has drastically reduced due to the elimination of corrupt practices.”  
Corruption in Afghanistan is endemic and has penetrated nearly all parts of the Afghan state, adversely affecting the government’s ability to maintain security for its citizens and deliver basic public services. Corruption is also embedded in social practices, with patronage politics and bribery an acceptable part of daily life. The large influx of money and poor oversight of contracting and procurement related to the international presence over the last two decades is believed to have exacerbated the problem.
Shinwari said under the last government in Afghanistan, warlords and militias would man check posts and collect money in the name of taxes, while officials would ask for bribes of up to Rs250,000 ($1,515) to clear vehicles for exit and entry.
There was now a single-entry point at the border and only legal taxes were being demanded, Shinwari said.
“Now the vehicles go to Afghanistan easily by paying no more than the officially approved amount,” he said, which was Rs80,000.
Aliya Hamza Malik, Pakistani parliamentary secretary for commerce, industries and production, confirmed the increase in trade flows between Pakistan and Afghanistan, saying Islamabad expected business would increase even further under an “inclusive administration” in the neighboring country.
‘Wither India?’
Pakistan has said it plans to increase the volume of bilateral trade with Afghanistan, which stood at $2 billion in 2019, to $5 billion in the next five years. According to official statistics, Pakistan’s exports to Afghanistan rose to $983.3 million in the last fiscal year compared to $890 million the year prior.
And Pakistan is looking beyond trade with Kabul under the Taliban government, Malik said, adding that the government hoped to access Central Asia — and its $90 billion export market — through Afghanistan. “We are opening trade routes to Central Asia from Afghanistan,” she said. “We understand that Pakistan’s prosperity depends on greater regional stability. A peaceful Afghanistan will help Pakistan, and we believe that trade is the best way to achieve that objective.”
Pakistani traders are also optimistic they will have greater access to the Afghan market under the Taliban since the group has no real relationship with India, which was a key supporter of the ousted regime in Kabul. They also hope for more space for their businesses as India’s trade with Afghanistan has dried up with borders and banks closed since the Taliban took over the country. Indian industry officials, however, have said that the disruption is temporary and business would return to normal soon.
Bilateral trade between Afghanistan and India crossed $1.5 billion in 2019-2020, according to the embassy of India in Kabul and the Confederation of All India Traders. New Delhi is one of the leading suppliers of essential commodities to Afghanistan, which exports mainly dry fruits to India.
“There is a temporary glitch in trade as Afghanistan is witnessing a transition of power,” Rahil Shaikh, managing director of Mumbai-based MEIR Commodities, which exports sugar to Afghanistan, told Reuters last week. “But within a few days trade will restart.”
Demand for sugar and other essential commodities is robust from Afghanistan and imports could rise once banks start operations, said Tayyab Balagamwala, director at Karachi-based Seatrade Group.
“The Taliban has slashed import taxes on many commodities,” he said. “This will lead to more imports.”