Inauguration of Bannu-Ghulam Khan –Kabul Road: Prospects for Pak-Afghan Trade Cooperation
Maryam Naseer
Strong trade and economic cooperation between Afghanistan and Pakistan hold multiple promises for both countries and their people particularly in political, economic and socio-cultural domains. The most important of them are establishment of friendly relations and economic interdependence between both countries, and economic and social security for the conflict-hit people across the Durand Line. Nonetheless, a durable solution to the common security threats of militancy and religious extremism lies in evolving a joint approach to counter these threats.
Despite being a landlocked country, Afghanistan’s geostrategic location as a doorway to energy rich Central Asian Republics (CRAs) gives it immense importance in relation to prospective regional economic integration of South and Central Asian regions. But nature of relations between Pakistan and Afghanistan – muffled by an environment of mistrust – large spread insecurity and violence in both countries, and strained relations between Pakistan and India are some of the many factors that hinder intra- and inter-South Asian regional economic integration. They have also impeded progress on implementation of some of the regional and mutual trade pacts and agreements such as South Asian Free Trade Agreement (SAFTA), two gas pipelines to Pakistan and India from Iran and Turkmenistan, and recently signed Afghanistan-Pakistan Transit Trade Agreement (APTTA).
South Asian countries have however started to understand the benefit of regional trade and transit agreements. Bangladesh’s pitch for becoming a transit hub for India, Nepal and Bhutan is a shining example in changing attitudes in others countries of the region. Pakistan and Afghanistan have also started to realize role of bilateral and regional trade in socioeconomic development. The soaring energy needs of Indian and Chinese economies as well as energy crisis in Pakistan can be easily overcome, if normalization of trade and economic ties between Afghanistan and Pakistan takes place.
Although the bilateral trade between Afghanistan and Pakistan in the formal sector has improved in recent years yet most of the trade takes place in the informal sector, where the volume of clandestine business (smuggling or re-routing of Afghan transit trade goods) between the two countries is estimated to be more than 10 billion dollars. With regard to formal trade, against three million dollars in 2002, it increased to 492 million dollars in 2003-04 and climbed up to 1.63 billion dollars in 2005-06, but it witnessed a decline of almost 400 million dollars in 2006-07 because the Pakistani manufacturers have been losing out to mainly Iranian and Indian competitors. However, Pakistan has targeted to increase its exports to Afghanistan to two billion dollars by 2010-11.
In order to give a further boost and to formalize these trade relation a significant development took place in April 2011 when Pakistani Army Chief General Ashfaq Pervez Kiani inaugurated the 80-kilometer long road project worth PKR 4 billion ($48 million)—being undertaken by Frontier Woks Organization (FWO), a subsidiary of Pakistan army—from the northwestern Pakistani town of Bannu in Khyber Pakhtunkhwa (KPK) to Khost province in Afghanistan via Ghulam Khan area of North Waziristan Agency of the Federally Administered Tribal Areas of Pakistan (FATA). Bannu-Ghulam Khan highway will pass through Mir Ali, the headquarters of North Waziristan Agency, and Miranshah that will serve as central connecting points between Bannu in Pakistan to Kabul in Afghanistan where Ghulam Khan will link Khost, Gardez and Ghazni. The new road is considered as the third commercial and diplomatic road network after Torkhum highway in Khyber Agency in FATA and Chaman town in Balochistan. The construction of this road will provide central trade route between Afghanistan and Pakistan. Further it has been planned to link this route with Indus Highway to make it a major road communication network with Afghanistan.
The road is a part of quick impact projects (QIP), signed between the United Arab Emirates (UAE) and Pakistani Army on November 11, 2010—to improve livelihood opportunities and to initiate uplift schemes for development of militancy stricken areas of Swat and the Federally Administered Tribal Areas.
After successful completion of road construction, if it performs to its potential, it will not only decrease the travelling distance between Bannu and Kabul but will also reduce the traffic load on both Torkhum and Chaman border crossings in KPK and Balochistan respectively. Moreover, since the road has been built on plains of the Ghazni and Maidan Wardag provinces, unlike the zigzag mountainous road trails with their tortuous twists and turns on Torkhum and Chaman highways, this road link will ensure smooth passage to trade convoys to and from Afghanistan. The new road will also enable industrialists and traders from Punjab to easily dispatch products to consumer markets in Afghanistan and Central Asian republics.The road project will not only create multiple opportunities of trade but it will provide employment for approximately 2,000 locals. The project is expected to be completed in 18 months time but due to prevailing hostility and sporadic terrorist activities serious security concerns remain about feasibility as well as the utility of such a project which has to pass through conflict-hit areas throughout.
The construction of this road link brightens the potential prospects for the growth of close economic collaboration between Pakistan and Afghanistan. However some other steps are needed to speed up and strengthen the Pak-Afghan trade and economic ties.
With a view to give a boost to the trade in the formal sector, the governments of Pakistan and Afghanistan need to tackle their internal conflicts and security problems through joint and mutually agreed mechanisms, without which realization of these goals is impossible.
The best option, which also appears logical in the context of the on-going economic globalization process, is to establish a free trade zone between Khyber Pakhtunkhwa (KPK) in Pakistan and Afghanistan. This will greatly help the economies of KPK and Afghanistan while, at the same time, bring smuggling down to a negligible level.
The governments of both countries should facilitate and encourage the traders and business communities to hold cross-border displays and other marketing events by making the chambers of commerce active.
Security is the prime concern of traders and business class. The governments should evolve some mechanism for that by using their respective security apparatuses and also the local populations on both sides of the border.