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7/30/2019 Busines Slides

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Afghanistan (1978-2012) An

Economic advantage or curse forPakistans Economy

Presented by:

Fahad Anwar


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Pakistan and Afghanistan share an immense

border known as Durand line of 2430 km

determined in 1893.

After Pakistans creation in 1947, Afghanistan

objected to its admission to the United

Nations and decided not to recognize Pakistanas the legitimate inheritor of the territorial

agreements reached with the British India.


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For intermittent periods between 1947 and

1973, Kabul extended support to Baluch andPashtun nationalists inside Pakistan and even

called for the creation of a new state called

Pashtunistan

.

Ever since the Soviet invasion of Afghanistan

in 1979, large numbers of Afghans have

sought refuge in Pakistan


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Afghanistan has long had a dependent

economic relationship with neighboringPakistan.

The Afghan Transit Trade Agreement (ATTA),allows Afghanistan to import goods duty free

through the port of Karachi is key to theirtrade.

Pakistan is the largest exporter to Afghanistan,

with around US$ 1.7 billion in exportsannually, which accounts for 36.8% of Afghanimports and 8.4% of Pakistans exports.


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Afghanistan is responsible for more than 90%

of the worlds illicit opium production, and33% of that product is smuggled across the

Pakistan-Afghanistan border.

From Afghanistan, narcotics are smuggled intoBaluchistan province, where they are then

trafficked to Iran and later the Middle East and

Europe.


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Some of the main items smuggled from

Afghanistan into Pakistan are drugs such as

opium, hashish, and heroin, as well as lumber,

precious stones, copper, automobiles andelectronics.

Pakistan, Iran, and Afghanistan have agreed to

coordinate border security in order to stop drugtraffickers, and they have also agreed to block the

transport of chemicals used to produce heroin.


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Pakistan finds itself in economic competition

with its regional rival Iran and India.

Pakistans monopoly over Afghanistans access

to sea was recently challenged with the

opening of the Iranian port of Chabahar and

the linking of it to the ring road in Afghanistan.


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MAJOR EXPORTS:

Opium, fruits and nuts, hand woven carpets, wool, cotton,

hides and pelts, precious and semi-precious gems.

MAJOR IMPORTS:

Capital goods, food and petroleum products, and most

consumer goods.


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Major items of export from Pakistan to Afghanistan (US$ Million)

Commodity Description 03-04 04-05 05-06 06-07 07-08

Petro & Petr. Products 126.617 311.333 442.88 313.92 477.14

Plastic & articles there of 92.17 78.932 112.28 79.59 120.97

Wheat Floor 91.151 97.282 138.38 98.09 149.09

Animal or Vegetable fats or oil 58.652 106.064 150.88 106.95 162.55

Iron & steel & its products 55.216 42.602 60.60 42.96 65.29

Major items of import from Pakistan to Afghanistan (US$ Million)

Commodity Description 03-04 04-05 05-06 06-07 07-08

Iron & Steel & its articles 5.976 20.024 12.051 19.06 28.62

Ed. Fruits, Nuts etc. 12.792 6.486 11.55 18.30 23.72

Edible Vegetable 6.238 2.829 7.182 11.430 17.57

Wood charcoal, wood & articles 5.495 1.955 3.04 4.57 9.42

Leather & Leather manufactures 0.770 0.908 1.511 2.28 4.71

Source: WTO Trade data base, World Development Indicators, Federal Bureau of Statistics.


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Impact on Pakistans Industry

It is a common phenomenon that whenever a war erupts on a large scale in any

country, its fallout is felt in its immediate neighboring countries as well.

Inflation rate increases from 2.5 to 18.9% till 2011.

Weaponization of Pakistani society started when US sent huge supply of AK47

rifles and other arms/ammunitions for Afghan Mujahedeen.

Though solid figures are not available, at least 53,000 Afghan workers using

Pakistani passports are reported to have been hired in the U.A.E..


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conclusion

Secure border , foreign policy and media can

play important role for Pakistan economic

advantage as a stable and secure Afghanistan,

developing economically, represents a benefitto Pakistans ailing economy, as it may provide

a growing market for Pakistani products.

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