ISLAMABAD: Good days of bilateral trade between Pakistan and Afghanistan seem to be over now. This is evident from a consistent decline in mutual trade between the two countries in recent years. For example, in FY20 (from July 2019 to June 2020), bilateral trade between Pakistan and Afghanistan has further decreased, falling to around $1 billion. In FY20, Pakistan’s exports to the land-locked neighboring country have dropped to $888 million after nearly a decade, from $1.20 billion in the preceding financial year. Similarly, imports from Afghanistan have decreased to $121 million in FY20 from $170 million in FY19. Thus, in FY20 two countries’ mutual trade further dithered to $1.09 billion from 1.37 billion a year ago. Pakistan is the major loser of decline in trade with the neighboring country because imports from Afghanistan are less than 20 percent of exports from Pakistan.
Withdrawal of the foreign troops (the US and NATO soldiers) from Afghanistan from 2011-2021 has derailed two countries bilateral trade. In recent days, America, Europe and other countries have paced up troops pull out from Afghanistan ahead of the US deadline of Sept 2021. Meanwhile, in 2020, COVID-19 has also dampened mutual trade between the two nations. During pandemic, businessmen of both the countries could not continue trade as usual because of risks of spread of coronavirus.
According to the State Bank of Pakistan (SBP) data about two countries bilateral trade, in 2015-16, for the first time exports from Pakistan to Afghanistan surged to $1.43 billion, from nearly half a billion dollars about six years ago. In fact, deployment of the American and NATO troops in Afghanistan in the backdrop Sept 11, 2001, developments (attacks on the World Trade Center in New York and subsequent attacks against Taliban in Afghanistan), demand of consumer items in Afghanistan witnessed a steady growth from Pakistan.
According to the World Integrated Trade Solution (WITS), a subsidiary of the World Bank, vegetable, live animals, food products, including wheat and flour, fuels, especially diesel, were among the major exports to Afghanistan from Pakistan. Meanwhile, Pakistan’s leading imports from the land-locked country were vegetables, fresh and dry fruits, and carpets, etc.
After 9/11 developments, more than 140,000 US and NATO troops were deployed in Afghanistan. However, in 2011, American President Obama announced withdrawal of 10,000 troops and anther 23,000 troops left Afghanistan in 2012. This was the beginning of the process of gradual withdrawal of troops from Afghanistan.
Additionally, in the second week of April 2021, the new President of the United States Joe Biden has announced complete withdrawal of troops from the land-locked country by September 11, 2021. In the past few days the withdrawal of the US troops has been expedited while Bagram Airbase has been handed over to Afghan government. Diplomatically, complete foreign troops’ withdrawal from Afghanistan is being seen as a good development for Pakistan because the country is expected to witness minimum terrorist attacks directed from Afghanistan and infiltration of terrorists from the neighboring country. Nonetheless, in financial terms, this development would further dampen demand of Pakistani consumer items in Afghanistan in the years ahead. In this situation, Pakistan should expedite efforts to promote bilateral trade with Afghanistan.