The Afghan Transit Trade has had a detrimental impact on Pakistan's national economy and stands as a fundamental contributor to the pervasive issue of the black economy within the country. A report highlights that Afghan authorities consistently misrepresent the prices of items involved in the Afghan Transit Trade, resulting in a glaring disparity between the reported and actual values of these goods. Consequently, a significant portion of these items finds its way back into Pakistan's markets illegally.
The report further reveals that Afghan traders manage to evade customs duties on a substantial portion of their trade items through smuggling, amounting to considerable annual losses for Pakistan, estimated at approximately three billion dollars.
To compound matters, these traders frequently tamper with the tracking systems installed on container trucks, thereby compromising the tracking mechanisms in place. These trucks, loaded with Afghan trade items, are then sold at lower rates on the black market within Pakistan, posing a severe threat to the local industry.
In addition to these concerns, the Afghan Transit Trade route has become a conduit for the smuggling of narcotics and other contraband items, exacerbating the challenges faced by Pakistani authorities. The proliferation of fake bills of lading further complicates efforts to maintain accurate tracking records.
As a result, the unchecked growth of Afghan imports under the transit trade has surged by 67% to a value of 6.71 billion US dollars in February 2022-23, compared to the four billion USD recorded in the previous year.
This surge in imports under the Afghan Transit Trade has significantly impacted Pakistan's actual imports, leading to a notable decline in several key sectors. The manufacturing of products made from artificial filament-based cloth has declined by 48%, while imports of electronic equipment and tires and rubber have dropped by 62% and 42%, respectively.
The import of tea has reduced by 51%, machinery by 34%, and vegetables and fruits by 46%. Consequently, Pakistan's small and medium-scale industries and overall economy have been severely affected by the Afghan Transit Trade, as indicated in the report.
In light of these challenges and their profound repercussions, the report underscores the critical need to regulate the Afghan trade in accordance with internationally recognized standards and laws. Such measures are deemed essential for the economic revival of Pakistan, as they can help curb illicit practices, safeguard local industries, and ensure a fair and transparent trade environment