RECENTLY, an important development has seemingly gone unnoticed in Pakistan. With the construction of a 50km stretch of the Silk Road, extending from the Wakhan district in Afghanistan to the Chinese border, Afghanistan has successfully established a direct link with China, reducing the distance and lowering the cost of commercial trade between the two countries. The road was inaugurated by Afghanistan’s Ministry of Rural Rehabilitation and Development in September 2023, and since then, the two governments have been actively discussing the commencement of traffic through the Wakhan Corridor, which is a narrow strip of territory in northeastern Afghanistan, separating Tajikistan from Pakistan.

The road has the potential to impact Pakistan both positively and negatively. It may extend the China-Pakistan Economic Corridor (CPEC) from Pakistan to Tajikistan through Afghanistan, and link the landlocked Central Asian states with the ports in Karachi and Gwadar.

With the opening of the Corridor, a highway linkage between Tajikistan and Pakistan through Azad Jammu and Kashmir (AJK) could be established. This will create a significant opportunity for enhanced trade and economic activity in the region.

This route may facilitate the trade of minerals, textiles, agricultural products and manufactured goods.

If the CPEC does get extended through Afghanistan to Central Asia, it may further enhance Pakistan’s strategic position as a regional trade hub, increase connectivity with Central Asian markets, and boost economic growth.

Additionally, the corridor would provide Central Asian states with a shorter as well as more efficient route to access international markets via Gwadar, which is a strategically important port due to its location at the mouth of the Strait of Hormuz.

On the other hand, the newly placed arrangement may have negative impli- cations for Pakistan, especially in terms of the current Afghanistan transit trade mechanism.

Also, a direct access to China would enable Afghanistan to carry out its entire trade of over $1.3 billion with China, with Pakistan potentially experiencing a reduction in its geopolitical advantage and security leverage over Afghanistan.

For China, the opening of the Wakhan border would help extend its reach to diverse markets as part of the larger Belt and Road Initiative (BRI) even though security and cross-border terrorism will continue to be Beijing’s primary focus in this case.

China has already signed impressive multi-billion-dollar agreements for access to lithium deposits, and to develop Afghanistan’s largest copper deposit near Kabul. Besides, there are several projects on the ground in Badakhshan, Helmand, Herat, Kandahar and other regions.

After the opening of the trade route, all traffic originating from Afghanistan for China, either via sea or through the Karakoram Highway (KKH), will be diverted towards Wakhan. This in effect will mean that all cargo currently being transported through the KKH, as seen in the accompanying picture, will be diverted to Wakhan, depriving the KKH of a significant amount of traffic, and depriving the government of Pakistan of transit fees, levies and customs duties. Besides, Pakistani trucks might go out of business.

It is imperative for Islamabad to develop a comprehensive vision, mission, strategy as well as a plan focussing on the possible positives that may emerge, and for minimising the potentially negative impact it may have on the country’s trade.

Qamar Bashir
Islamabad

Published in Dawn, May 19th, 2024

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