The Afghan Transit Trade has had a detrimental impact on Pakistan’snational economy and stands as a fundamental contributor to the pervasiveissue of the black economy within the country. A report highlights thatAfghan authorities consistently misrepresent the prices of items involvedin the Afghan Transit Trade, resulting in a glaring disparity between thereported and actual values of these goods. Consequently, a significantportion of these items finds its way back into Pakistan’s markets illegally.
The report further reveals that Afghan traders manage to evade customsduties on a substantial portion of their trade items through smuggling,amounting to considerable annual losses for Pakistan, estimated atapproximately three billion dollars.
To compound matters, these traders frequently tamper with the trackingsystems installed on container trucks, thereby compromising the trackingmechanisms in place. These trucks, loaded with Afghan trade items, are thensold at lower rates on the black market within Pakistan, posing a severethreat to the local industry.
In addition to these concerns, the Afghan Transit Trade route has become aconduit for the smuggling of narcotics and other contraband items,exacerbating the challenges faced by Pakistani authorities. Theproliferation of fake bills of lading further complicates efforts tomaintain accurate tracking records.
As a result, the unchecked growth of Afghan imports under the transit tradehas surged by 67% to a value of 6.71 billion US dollars in February2022-23, compared to the four billion USD recorded in the previous year.
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This surge in imports under the Afghan Transit Trade has significantlyimpacted Pakistan’s actual imports, leading to a notable decline in severalkey sectors. The manufacturing of products made from artificialfilament-based cloth has declined by 48%, while imports of electronicequipment and tires and rubber have dropped by 62% and 42%, respectively.
The import of tea has reduced by 51%, machinery by 34%, and vegetables andfruits by 46%. Consequently, Pakistan’s small and medium-scale industriesand overall economy have been severely affected by the Afghan TransitTrade, as indicated in the report.
In light of these challenges and their profound repercussions, the reportunderscores the critical need to regulate the Afghan trade in accordancewith internationally recognized standards and laws. Such measures aredeemed essential for the economic revival of Pakistan, as they can helpcurb illicit practices, safeguard local industries, and ensure a fair andtransparent trade environment