KARACHI: Vice President of Pakistan Businesses Forum, Ahmad Jawad said Central Asia through Afghanistan will be the potential hub of trade and investment for Pakistan if all settle well after US forces exit, as Pak-Afghan trade has the potential of $8 billion a year.
All the neighbours i.e. Pakistan, Iran, China, Central Asian States and Russia are mostly on the same page for the peaceful settlement in Afghanistan and for the better future in economic terms.
He said trade could be an important channel for accelerating growth in Afghanistan. A plausible trade-driven growth scenario for Afghanistan should promote economic and export diversification.
“Trade is believed to promote the efficient allocation of resources, allow a country to realize economies of scale and scope, facilitate the diffusion of knowledge, foster technological progress, and encourage competition in both domestic and international markets.”
For a while, development of mineral resources has been thought to be the best avenue to improve trade and growth for Afghanistan.
Similarly Afghanistan’s economy is dependent on Pakistan’s resources in all sectors of the economy through formal and informal channels. This provides a huge opportunity for economic cooperation.
Government of Pakistan can offer incentives to Afghani producers/businessmen for setting up businesses in the recently developed SEZs where they can produce goods and export back to Afghanistan.
Since such production activities are difficult in Afghanistan due to security concerns, Pakistan can take advantage of the potential investment resource availability in Afghanistan.
Furthermore, Pakistani currency is acceptable for trade and the language barriers are minimal, this area of corridor-cooperation has immense potential for both countries.
Also there is a much greater economic and a broader development potential which can be realized by strategic policies by both countries. This will not only help the region in developing more advanced economic base but would also result in peace and stability of the region. Areas where such potential exist include human capital, investment, trade in goods and services and policy coordination.
Jawad also said due to ups and downs in our foreign policy relationship, declining volume of Pakistani exports to Afghanistan is not only depriving the country of a major market for its products but also giving local exporters sleepless nights.
According to the State Bank of Pakistan (SBP), Pakistan’s exports to Afghanistan fell 5.5 per cent from $790 million to $746.3m during the first nine months of the last fiscal year.
In this regard China could play an important role in building a railway track from Pakistan to Jalalabad and private sector dialogue must be held among the Central Asian chambers of commerce, Jawad added.
Copyright Business Recorder, 2021