PAKISTAN’S trade and industry has quietly capitalised on business opportunities offered by rebuilding Afghanistan’s economy funded by huge foreign aid.

The government, however, is seen by business to be active only in regional and global forums engaged with Afghanistan. Thus its footprint in social and physical infrastructure developments in that country is not as deep as many believe it could and should have been. Islamabad has not been able to provide impetus to local businessmen to have a stronger presence in the Afghan market.

On the contrary, other regional powers particularly India are more involved in Afghanistan’s development activities. According to official sources in Islamabad, Indian investment in Afghanistan currently at $3 billion far exceeds Pakistan’s $330 million.

However, in terms of trade and commerce Pakistan is ahead of others. Afghanistan is the third biggest trading partner of Pakistan with annual volume of trade above two billion dollars recorded last fiscal. The balance of trade is in favour of Pakistan by a wide margin as imports from the eastern neighbour is a meagre $350 million(2011).

The popularity of Pakistani consumer items in Kabul and rising spending capacity of the consumers has attracted a number of Pakistani and multinational companies to that country. Besides Nestle, Lever Bros, Coke and Pepsi, some local industries like producers of cement, pharmaceutical and food sectors are said to be gaining ground in the Afghan market.

Pakistani brands such as Shan, National, Lucky, Parkland, patent drugs etc are visible in all major Afghan cities. Recently a joint chamber of two countries has been set up to promote business links between the two neighbours.

“The impression that the private sector has taken a lead and the government has yet to focus on economic diplomacy to capitalise on the geographic, historical and cultural advantage is correct. Whereas Indians are pro-active in Afghanistan, their businesses have yet to take the war-torn country seriously as an investment destination”, a businessman who visits eastern neighbour on a regular basis told this scribe.

“Afghans dress in Pakistani fabric. They prefer Pakistani consumer items. They are most comfortable in making business deals with Pakistanis as compared to anyone else. We have natural advantage and would like to build on it”, Zubair Motiwala, President Pakistan-Afghan Joint Chamber of Commerce and Industry (PAJCCI), commented.

The US has prompted the creation of the joint chamber that was readily sanctioned by the two states. Khan Jan Alokzai, an Afghan businessman is co-president of the PAJCCI.

“ To enourage formal transactions, we have planned an information platform, a secretariat to facilitate match making between private businesses and an office in Kabul to help and guide interested investors from Pakistan”, Zubair told Dawn over telephone.

“Our counterparts in Afghanistan have sought Pakistan’s private investment in cement, construction material, textiles, ghee and edible oil and pharmaceutical sector”, he informed.

“Who can deny the ambitious investment activity of Indian government? If they won contracts in mining and other sectors, it’s good for them. Instead of pointing fingers we need to put our act together and outperform others in the market next door”, he added.

Some officials in the foreign ministry dismissed the perception about the government’s weak focus on economic dividends in Afghanistan’s reconstruction.

“PM is in Afghanistan with his team even today. Pakistan cannot afford to ignore any dimension of bilateral relationship. Our peace and prosperity is hinged on stability in Afghanistan. We understand the value of economic engagement and doing all we can to make it meaningful”, a senior government representative told this writer over telephone on Thursday last from Islamabad.

“Pakistan is planning a major economic event on Afghanistan before the year ends. We are active member of all forums and platforms that seek to develop and rebuild the war-ravaged country. We have given 3000 scholarships to Afghan students, conducted many training programmes, assisted them in institution-building and are willing to do whatever it takes to achieve peace. That is crucial for progress of our two countries”, he added.

Many businessmen identified a number of hurdles besides security challenges that discourage prospective Pakistani investors.

“The verification of credentials of businessman on the other side of Torkham boarder is the biggest problem for someone in Karachi or Lahore who wishes to expand his business to Afghanistan. The activity, therefore, has been limited to serve the Afghan market through distribution agents”, Karim Rammal, President Unicorn Consulting told Dawn. He entered Kabul through Asiatic Marketing Communications in 2009.

“People from Pakistan are working in collaborative model in Afghanistan and not joint ventures. Some companies are financing their distributors to set up plants there. I know Coke and Pepsi are putting plants there”, he informed.

“I do not trust the trading numbers quoted in official record. From what I know the actual trade or exports from Pakistan are at least double the official figures. The real challenge is to deal with widespread corruption and high insurance cost of putting up a manufacturing unit in Afghanistan”, another Pakistani businessman said.