REOPENING OF TURKHAM, CHAMAN PASSAGE WAYS AND ITS EFFECTS ON THE AFGHAN MARKETS
Despite being a landlocked country, Afghanistan is highly dependent on imported goods. Therefore, carries out its trade relations with the neighboring countries, especially Pakistan through land.
Apparently, Afghanistan has somewhat overcome the trade obstacles that are created for not have having border with sea, by establishing air corridors, especially via Chabahar port.
However, the coronavirus has severely affected the world economy recently. The virus has not only crippled the economies of developing countries, but has debilitated the economies of developed countries. In order to prevent the virus, almost all countries of the world have restricted or completely shut down travels abroad. In this regard, Afghanistan and Pakistan also considered similar precautions. Subsequently, the restrictions harshly effected the Afghan markets and the prices of basic goods peaked. Although the Afghan government strived to control the prices, but still seems abundantly high. On 20th Hamal, 2020, the Afghan government announced that the two key borders will reopen for trade. Here, we analyze the effects of Torkham, Chaman passageways reopening on the Afghan markets.
Borders Shut Down and Its Effect On Afghan Markets
During the video conference of SAARC countries on March 13, the Afghan president requested SAARC countries to uphold the borders open for the trade of basic goods. The request of the president was welcomed by Prime Minister Narendra Modi and Health Minister of Pakistan Zafar Mirza. Still, Pakistan closed Chaman and Turkham gates on 3rd and 16th March in order to prevent Covid-19 spread. Subsequently, the prices of basic goods significantly increased due to hoarding attempts in Afghanistan.
In order to avoid further probable increase in the prices, the Afghan president proclaimed to the people on 17th March that 24000 tons of wheat will be distributed from govt’s reserves to needy people. He further ordered the release of basic goods from northern ports without any penalty and tariff. He expressed his optimism the about the import of 7500 tons of wheat from India in the near future. In addition, the chamber of commerce and investment assured that the basic goods will be imported as usual, which consequently, reduced the fears of scarcity of basic goods among the people.
Since July, 2019 to January, 2020, exports of Pakistan to Afghanistan has reduced from 676.2 Million to 633.1 Million, which indicates 7% drop. The reduction points out that Afghanistan has discovered other ways out to replace trade with Pakistan. However, Afghanistan’s request from Pakistan to reopen the gates also shows that the country is as enthusiastic as usual to have trade relations with Pakistan and considers them mutually beneficial. This is due to the fact that the trade between both countries is not only economical for Afghanistan, but exports also benefits the economy of Pakistan, which is experiencing downturn since a while. As the international trades has decreased significantly worldwide, reopening of Turkham and Chaman passageways for trade will stabilize the markets and impressively reduce prices of goods. In addition, the reopening will play a constructive role in peace process and improve political links between both countries.
In 1965, Afghanistan and Pakistan signed the Afghanistan-Pakistan Transit Trade Agreement (APTTA), which was renewed in 2010. According to the agreement, Pakistan will allow Afghan trucks to access Wagah border of India through Pakistan. In return, Afghanistan will facilitate Pakistani trucks to reach out to Afghan markets.
During the first visit to Pakistan in 2014, President Mohammad Ashraf Ghani expressed that he hopes to have 5 Billion worth of trade with Pakistan. However, due to political distrusts, provision of obstacles for Afghan businessmen by Pakistan and repetitive closure of borders, caused millions dollars’ loss for Afghan traders. After some auxiliary actions and efforts, Afghan merchants showed lesser interest in tradewith Pakistan and the government also started to find other resolutions for trade. Subsequently, Afghanistan increased trade relations with India and Iran via Chabahar port, and Pakistan lost a huge portion of Afghan markets.
Conclusion
Opening of Turkham and Chaman Passageways for 3 days every week by Pakistan can lead to economic development and facilitate employment for both countries. Therefore, in order to overcome economic problems and combat the coronavirus, both countries are required to find and enable persistent and affective resolutions.
Trade relations between Pakistan and Afghanistan are greatly challenged by obstacle created on the border, especially on Pakistan’s side, where merchants are forced to pay heavy taxes. Therefore, according to reports, Pakistan’s exports to Afghanistan have decreased from 141.5 Million USD to 89.9 Million USD since last year.
Reopening of Turkham and Chaman gates can reduce demand and prices of basic goods in Afghanistan. Moreover, the reopening can facilitate an environment of trust between both countries and effectively connect the middle Asia and the southern Asia, which can consequently increase enthusiasm of countries in region for peace in Afghanistan.
For economic betterment, overcoming obstacles such as resolving visa problems, reducing taxes and tariffs and avoiding unexpected border shut downs can be effective to provide opportunities for the people of both countries, lead to economic prosperity, and establish comprehensively constructive relations during the current crisis.
The Afghan government should not presume the reopening of borders with Pakistan as a key to all problems, but considering the recommendation of António Guterres, Secretary General of UN, should strive to eliminate violence with the help of the international community and humanitarian organization. Additionally, compared to any other time, the government need to attract humanitarian aids of international communities during the current crisis.
References:
- https://www.india.com/news/india/saarc-video-conference-this-is-what-member-countries-said-about-tackling-coronavirus-3970972/
- https://www.geo.tv/latest/275184-coronavirus-pakistan-closes-afghan-border-crossing-at-chaman-for-one-week
- https://www.bbc.com/pashto/afghanistan-51921975
- https://www.thenews.com.pk/print/632519-pak-afghan-trade-slips-to-720-4mln-in-july-january
- https://www.usip.org/publications/2015/08/future-afghanistan-pakistan-trade-relations
- https://tribune.com.pk/story/996710/afghanistan-pakistan-open-key-economic-trade-talks/
- https://www.thenews.com.pk/print/632519-pak-afghan-trade-slips-to-720-4mln-in-july-january