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Expectations from Karzai’s visit

August 19, 2013
- Illustration by Abro
- Illustration by Abro

Business circles desperately hope that the Nawaz Sharif government will succeed in presenting Afghan President Hamid Karzai a convincing case for economic and trade benefits of closer ties between the two neighbours.

However, knowledgeable people based in Peshawar do not expect a breakthrough on the political or economic front during his visit for a simple reason: lack of clarity on policies and insufficient preparedness by a government still in the phase of settling down to handle complicated trade negotiations.

“The trip may benefit Karzai but not bilateral relations in any significant measure,” said a senior bureaucrat in the foreign ministry informally.

Afghanistan is said to be one of the major export destinations for Pakistan. The formal trade volume between Pakistan and its landlocked eastern neighbour is about $2.5 billion annually, according to current official data. Informal trade is said to be close to $5 billion, according to people in the know of things.

During the closing months of the last PPP government, some proposals were tabled to improve bilateral trade ties. “There were suggestions to look at the possibility of a third trade route through Waziristan, besides Chaman and Torkham. The Pakistan Railway’s role was also discussed in the context of building a rail network in the war-ravaged country to facilitate cheaper movement of merchandise. The issue of insurance cover for traders and reservations of Pakistani businesses over Afghan transit trade agreement were also discussed.

“From whatever little I know, the situation has not changed over the past one year. So, there is no progress and there is nothing to report,” an insider in Islamabad told Dawn.

“Nearly all staff in the relevant ministries has been shuffled in the last two months. You cannot expect officers who have assumed assignments recently to do a job this difficult. The petty rivalries and lack of coordination between sister ministries in Islamabad adds to the conundrum,” commented an economist in Islamabad.

“In an inter-ministerial meeting held last Thursday in Islamabad to prepare for the commercial talks, the ministries of commerce and railways and the Federal Board of Revenue were invited, but the ministry of industries knew nothing about it,” it was learnt in confidence.

Shafqat Hussain Naghmi, the federal secretary of industries, confirmed over phone from Islamabad that he was not invited for the meeting. It appears that there is no agenda for industrial investment, and talks may be restricted to the issues in trade.

The leaders of the business community informed that the current government was keeping them in the loop over issues of economic diplomacy. They were called to Islamabad before Eid to a meeting attended by the top functionaries of the economic ministries. They confirmed that they will attend some meetings during President Karzai’s visit, which is scheduled to start from August 26.

“The commercial ties have been held hostage to political positioning by neighbours referred to as ‘inseparable brothers’ by President Karzai some time back. The loss of market for Pakistani products like cement, steel, pipes, etc. is attributed more to ironical anti-Pakistan bias in Kabul,” says Zubair Ahmed Malik, President of the Federation of Pakistan Chamber of Commerce and Industry.

He also held Pakistan partially responsible for growing hostility in a country that it supported at a high cost.

“It is a clear failure of our economic diplomacy. I find the mistrust in Afghanistan hurtful. We were friends during the difficult past three decades, but now, when the circumstances are changing for the better, we are painted as aliens out to disrupt the process of building peace,” he said.

With all the misunderstandings and the gulf, it is an undeniable fact that Afghanistan is closer to Pakistan than any of its other neighbours, both culturally and historically. Afghans wear clothes produced in Pakistan, eat food exported from Pakistan, come to Pakistan for medical care, and send their children to Pakistani colleges and universities. They even trade in Pakistani currency, besides their own currency and dollars. Many rich Afghans own businesses here and even maintain a second home in places like Quetta and Peshawar.

There is little denying the fact that the potential to deepen trade relationship is huge, and the need to bring the current level of economic integration onto the surface is urgent.

“The relationship is close enough to impact from labour to products to services sector in either of the two countries in case of adjustments at the macro economic level. The rebuilding opportunities in Afghanistan have attracted skilled workers of the Pashtoon belt of Pakistan to move to Kabul. It has actually created a situation of scarcity of construction workers in Khyber Pakhtunkhwa,” says an expert from Peshawar.

The changing scenario in Afghanistan has been felt even in Karachi, where the cost of unskilled construction workers has almost doubled over the last five years.

“It is for the political leadership on either side of the Durand Line to rise up to the challenge of finding workable solutions to free people of the region from the legacy of a difficult past, and give them a chance to build a future for themselves and their children,” commented an expert.