$5b Pak-Afghan trade target unattainable

KABUL (PAN): A research report suggests trade target of $5billion between Afghanistan and Pakistan set for the fiscal year 2015 is unlikely to be achieved, thanks to increasing Iranian exports into Afghan market.
The Pakistan-Afghanistan Joint Chamber of Commerce and Industry (PAJCCI) report said Afghan-Pak bilateral trade increased from $0.83 billion in 2007 to $2.38 billion in 2013, citing data compiled by Pakistan Bureau of Statistics and State Bank of Pakistan.
Afghanistan’s total exports are projected at $2.71 billion for the Afghan fiscal year ended December 2014. The report adds this is only a marginal improvement over $2.52 billion recorded in the 12 months ending March 2009.

Referring to the State Bank of Pakistan (SBP)’s data, the report further revealed total bilateral trade in the first quarter of FY 2013-14 fell by 15 percent year-on-year.
The fall in Pakistan’s exports is intriguing, when in fact Afghanistan’s total annual imports have been on the rise, it read.
Similarly, the total volume of bilateral trade, which in FY12 was recorded at $2.45 billion, stood at $2.38 billion.
Muhammad Ishaq, member of Khyber Pakhtunkhwa’s Board of Investment and Trade said it included the $2.3 billion transit trade component; otherwise, bilateral trade between the two countries has dropped to less than one billion dollar.
Pakistan’s exports to Afghanistan in FY12 stood at $2.25 billion but over the last five months it stood at id=”mce_marker”.46 billion, while imports from Afghanistan rose from $0.199 billion in FY12 to $0.917 billion during the first quarter of the current fiscal.
As cited by the PAJCCI report, Ishaq said one reason for decline in Pakistan’s exports to Afghanistan could be the rise in informal trade across the border.

A trade observer highlighted how Afghan markets are flooded with Pakistani textile products, such as cloth and readymade garments, but the same is not visible in official data.
PBS data reported Pakistani textile exports to Afghanistan stood at $28 million in FY12, only 1.2 per cent of total Pakistani exports to the country.
The other plausible reason, given for decline in Pakistan’s exports, is the increase of Iran’s exports to Afghanistan, due to which Pakistani exports to Afghanistan decrease in the last two years.
Although Pakistan had a bigger share in Afghanistan’s total trade, Iran’s trade with Afghanistan has increased notably in the last ten years. From id=”mce_marker”20 million in 2002-3 and $250 million in 2005, Iran’s exports to Afghanistan reached to id=”mce_marker”.18 billion.
Anecdotal evidence suggests that Iranian exports have started to eat into the share of Pakistani exports in Afghanistan

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