PESHAWAR, July 15: Exports to Afghanistan can surpass the existing level of $1 billion if the Pakistan-funded Torkham-Jalalabad highway is completed soon and the export of products high in demand in the Afghan market is facilitated through effective policy measures at the federal government level, trade and business circles say.
Businessmen are of the view that Pakistani products had comparative advantage over those of its competitors in terms of capturing the Afghan market.
But Pakistan might witness this advantage slipping out of its hand because of increasing competition from Indian, Chinese and Iranian products which, according to the Peshawar-based businessmen, had already captured a considerable chunk of the growing consumer market in the war-torn country.
“We should capitalize on the advantage we have as Afghans, after having lived for 30 years in Pakistan, have developed a special taste for our products,” said Ghulam Sarwar Momand, former president of the Sarhad Chamber of Commerce and Industry (SCCI).
He said the government should take effective measures to curb the smuggling of poplar trees to Afghanistan. If the government’s agencies managed to rectify the situation, then the NWFP-based match factories would have a greater chance of strengthening their grip over the Afghan market.
“Because of poplar trees’ smuggling to Afghanistan, local match manufacturers are not left with much raw material, and therefore cannot meet the Afghan market’s demand side by side feeding the local market,” said Bakhtiar Ahmed, manager of a match manufacturing unit.
Mr Momand said that apart from the match manufacturing sector, the NWFP-based pharmaceutical manufacturers had good prospects of increasing their business with Afghanistan.
“The government should take measures to facilitate exports of medicines to Afghanistan for which the ministry of health would need to play a proactive role in facilitating the local manufacturers,” said Mr Momand.
Exports of medicines to Afghanistan via NWFP have recorded a substantial increase during the last two years. The exports of medicines to Afghanistan jumped to Rs192 million in 2004-05 from Rs104 million in 2003-04. In 2002-03, medicine exports via NWFP was worth a mere Rs25 million.
“We still have an opportunity to capture the medicine market in Afghanistan and counter the increasing presence of Indian and Iranian products by reducing transportation cost and giving incentives to the NWFP-based pharmaceutical sector,” said Mr Momand.
Zia-ul-Haq Sarhadi, a Peshawar-based freight dealer, urged the federal government to give subsidy on freight meant for Afghanistan.
“The Indian government has given duty drawback facility to its transporters dealing with Afghanistan that has reduced the transportation cost, giving a comparative advantage to its exporters to compete with products imported by Afghanistan from Pakistan and other countries of the region,” Mr Sarhadi said.
He said that Pakistani exporters were constrained to bear higher transportation cost than their competitors from India who, despite lacking access to Afghanistan through direct land routes, were paying much less than the cost met by the Peshawar-based exporters.