KARACHI, April 9: Pakistan’s exports to Afghanistan rose to $422.5 million in July-February 2004-05, from $223.8 million in a year-ago period.

This nearly 89 per cent increase has raised hopes that the full year export earning from the neighbouring country may reach $600 million. The Export Promotion Bureau had set the initial target for exports to Afghanistan at $500 million. “But I am sure we will exceed the target,” said Minister of State and EPB Chairman Tariq Ikram when reached by Dawn over telephone.

He did not give his own estimate, but shared exporters’ view that exports to Kabul may reach $600 million during this fiscal year ending in June, up from $390 million in the last fiscal year.

Export data compiled by the EPB show that exports of a large number of items to the neighbouring land-locked country have risen substantially during the first eight months of the current fiscal year. “Notably, the exports of construction materials and petroleum products have shown great progress,” said Ikram citing regeneration of economic activity and reconstruction of infrastructure projects in Afghanistan as a key reason for this.

During July-February 2004-05, Pakistan exported $75 million worth of crude oil from petroleum and Bituminous minerals; $35 million worth of cement and $29 million worth of paints and varnishes. In the comparable period of the last fiscal year, exports of these items to Afghanistan had fetched $23 million, $17 million and $415,000 only.

Besides, as the war-torn country is limping back to normalcy with an elected government trying to establish its writ, demand for almost all items of daily use has increased in Afghanistan. And, Pakistan takes the lead in meeting this demand. According to an Asian Development Bank report, Afghanistan’s total imports during fiscal year 2004 (ending on March 20, 2005) were estimated at $3.4 billion.

The EPB data show that Pakistan exported a vast variety of items of industrial and household use to Kabul during the first eight months of this fiscal year. Export of animal or vegetable fats and oils, for example, fetched $37.7 million followed by sugar ($28.8m); tableware and other household articles ($19.7m); plastic goods ($17.8m); soyabean oil ($10.7m); pumps for liquids, liquid elevators ($10.1m); milk and cream ($10m).

With eight months’ exports to Afghanistan totalling $422.5 million, the country ranks sixth among Pakistan’s largest export destinations. On the top is the USA, followed by the UK; the UAE; Germany and Hong Kong.

Exports to these six countries totalled $4.711 billion, which was more than 53 per cent of the total exports of $8.849 billion during July-February 2004-05.

Individually, exports to the USA totalled $2.039 billion, followed by the UK ($721.2m), UAE ($657.2m), Germany($442.7m), Hong Kong $428.7m and Afghanistan ($422.5m).

The EPB chairman claims that growth in exports to Afghanistan is an outcome of the EPB strategy designed in 2001 aimed at increasing exports to Islamic countries — clubbed together as countries with which Pakistan has special relations.

He also says that the decision taken in this year’s trade policy of allowing Afghan importers to open letters of credit both in dollars as well as in Pakistani rupee has also played a key role in increasing exports to Kabul. “Besides, with Pakistani banks now operating in Kabul, trade facilitation has become a bit easier.”

“Previously we focussed only on border trade with Kabul with hardly three dozen parties based in Peshawar being active but now traders from Karachi, Lahore and several other cities have also established business contacts in Kabul and are exporting their goods there.”

In July-February 2004-05, Pakistan’s total exports stood at $8.49bn. Exports to Kabul at $422.5m constituted about five per cent of the total.