Pak-Afghan Economic Ties Appear Better Than Perceived

By Amir Zia
The News
Sunday, February 27, 2011

Pakistan is the largest trading partner of Afghanistan, while Afghanistan remains the third largest export market for Pakistani goods. The official and unofficial Pak-Afghan trade figures now hover around $4.0 billion a year.

Ejaz Haider, one of Pakistan’s leading journalist and a dear friend, bought a stylish cap as a souvenir from Kabul’s famous Kocha-e-Murghan (Chicken Street), but it was made-in-Pakistan. The cap design, popular on both sides of the Durand Line, was a favoruite of slain Afghan warlord, Ahmed Shah Masood, whose portraits now adorn the Afghan capital. In fact, Ejaz wanted to buy a made-in-Afghanistan cap, but unfortunately none were available at least in the two or three shops which we visited during our flying shopping trip of a couple of Kabul bazaars. Friendly Afghan shopkeepers tried to impress us by showing us their best products, but many of them were Pakistan-made.

In Kabul’s landmark Intercontinental Hotel, one meets Pakistani traders, businessmen and marketing officials not just from Peshawar or Quetta, but also from Karachi and Lahore. One of them had been coming here all the way from Karachi since 2002 to market one of Pakistan’s popular biscuit brands.

According to Pakistanís Ambassador to Afghanistan Mohammad Sadiq, a leading consumer goods company exports around $11 million worth of made-in-Pakistan products to Afghanistan monthly. From Pakistani tractors to yogurt, all have a loyal market in this country, he said.

Yes, Islamabad may remain the favourite target of select Afghan intellectuals’ and government officials’ wrath for its alleged double-game and soft approach toward the Taliban militants, but Pakistani goods are in great demand in this war-ravaged country, striving for peace and normalcy in the wake of more than three decades of continous war and conflict.

The hue-and-cry made by many Pakistani opinion makers and analysts that Pakistan is being marginalized and losing its stakes in this land-locked Central Asian state appears exaggerated and off-the-mark given the dependency and deep economic and trade ties between the two countries, sharing a common frontier stretching over 1,500 miles.

The facts speak for themselves.

Pakistan is the largest trading partner of Afghanistan, while Afghanistan remains the third largest export market for Pakistani goods - after the United States and China.

The official and unofficial Pak-Afghan trade figures now hover around $4.0 billion a year. Out of it, more than half remains the unofficial exports from Pakistan - purchased from Peshawar, Quetta and other border regions.

From wheat to cement and medicines to fizzy drinks ñ all are imported from Pakistan.

The official Pakistani exports to Afghanistan have jumped to $1.2 billion in financial year 2010 from $26 million when the Taliban ruled Afghanistan 10 years ago. Now Pakistan is eyeing $1.7 billion official exports to its neighbour in FY2011 with the first half figure already touching $875 million (July-January).

The country, which stands second in bilateral trade with Afghanistan, is Iran, having a figure of $600 million annually. India and other neighbours come nowhere near.

The popularity of the made-in-Pakistan products in Afghanistan stems from the fact that a vast number of Afghans have lived in Pakistan for decades. Many are hooked to Pakistani brands, preferring even expansive Pakistani medicines compared with the Indian ones which are relatively cheaper.

No wonder, Pakistani medicines enjoy a lionís share in the Afghan market. A few Pakistani pharmaceutical companies now export their entire production to Afghanistan rather than marketing it in the domestic market.

And it is not just Pakistani exports which remain crucial for Afghanistan. Pakistan’s Ambassador Sadiq says that more than 70,000 Pakistanis now work in Afghanistan ñ from daily wage labourers to professional bankers, chartered accountants and government advisors.

Many of the ardent Afghan critics of Pakistan — from Pashtuns to Hazaras and Tajiks to Uzbeks ñ have lived and studied for years in Pakistan. One finds it amusing that a college in Karachi’s Shah Faisal Colony or a medical college in the Khyber-Pakhtoonkhawa province served as the alma mater of some of these fiercest Afghan critics, who would smile and tell you about their good days spent in Peshawar, Quetta, Islamabad or Karachi.

The strength of Pak-Afghan economic ties stems from the people-to-people contact at all the levels with many leading Afghan businessmen, who play a crucial role in Afghanistan’s economy today, have lived, been brought up and been educated in Pakistan for years. Their Pakistan ties remain intact.

And there is a depth in this relationship, which no other country enjoys. Pakistan issues more visas to Afghans daily than rest of the world combined — without charging any fee.

Sadiq, the Pakistani ambassador, said that on an average Pakistan issues 1,200 multiple-entry visas to Afghans daily, while more than 50,000 Afghans also cross into Pakistan daily without any travel documents.

“They can go up to Karachi without any restriction. They can get free treatment from Pakistani government hospitals and avail private medical facilities like any other Pakistani.”

J.P. Singh, Head of Political & Information Office of the Indian Embassy in Kabul, said that his embassy issues around 250-300 visas every day on an average, while the four Indian consulates at Herat, Mazar-e-Sharif, Jalalabad and Kandahar issue 40-60 visas daily.

Both Pakistan and India compete to win goodwill and friends in Afghanistan, which can be seen as healthy competition, benefitting the Afghan people.

India has a robust $1.3 billion assistance programme for Afghanistan, which is the sixth largest for this war-torn country.

With new development and infrastructure projects, India is also renovating and restoring some of its old projects under this programme, which also cover their administrative and monitoring cost.

Pakistan has a $330 million aid programme for Afghanistan, but it does not include the administrative and monitoring cost. This means that the entire amount is being spent just on Afghanistan. Pakistan has undertaken important infrastructure, development, health and education projects that include the Jinnah Hospital Kabul, Sir Syed Post Graduate Faculty of Sciences, Nangarhar University, Jalalabad, Liaquat Ali Khan Engineering Faculty, Balk University, and Rahman Baba High School, Kabul.

It is nice to see buses on the roads of Kabul with inscription in Dari-language proclaiming that “it is a gift from Pakistan.”

In recent years, Pakistan has gradually worked to underline the fact that it remains a friend of not just a particular ethnic group, but all the Afghans.

This suits the country in the long-run and should remain the cornerstone of Pakistan’s Afghan policy.

No country is likely to benefit more in the world than Pakistan once peace returns to Afghanistan.

The peace offers huge economic and trade potential for both countries, not just because of their demography and under-utilized or unutilized resources, but also because of their strategic location that can make them a super-highway for trade and transfer of energy from Central to South Asia and the Middle East. Pakistan’s foreign policy and politics should take a lead from the country’s economic interests.