THAT the 39pc surge in Afghan transit cargoes through Pakistani ports and territory in one year coincides with Islamabad’s import restrictions to curb dollar outflows underlines both the extent of and the ease with which this facility is being abused to smuggle goods into this country.
It also shows how the Afghan transit trade has always been misused by traders of the two countries for smuggling. Reports suggest that transit cargoes are often diverted from ports directly to Pakistani markets before crossing the border.
New Customs data showing the number of containers in the Afghan trade soaring to 102,886 in FY23 from 74,316 the previous year is alarming. The dollar value of the trade, too, is assessed to have spiked to a staggering $6.7bn from $4bn a year earlier.
Cargo value for the first two months of the present fiscal stood at $1.14bn and the full-year projection is $6.8bn. The value of items prone to being smuggled under transit cargo is also up by 63pc to $3.7bn.
Smuggling is the bane of the Pakistani economy. It especially has a debilitating impact on the manufacturing industry, discouraging fresh investment, and resulting in large job and tax revenue losses.
In cases like Pakistan, the settlement of payments for illicit cross-border trade through the illegitimate hawala/ hundi network also impinges on much-needed remittance flows and often leads to capital flight.
It is heartening to note that the authorities have woken up to the challenge, launched an anti-smuggling drive, and tightened the Afghan transit trade regime, besides banning the import of goods prone to being smuggled under it.
But this campaign should not be confined to simply reinforcing border controls; it must be expanded to take action against those who stock and sell smuggled or illegally imported goods in their shops without fear of the law, or who under-invoice their imports.
It may bring the government under pressure, but it is the only way forward.
Published in Dawn, October 10th, 2023
