Pakistan Eyes New Export Markets in Afghanistan, Central Asia
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Loading... - Chunhua Dong
- 30 Jul 2024
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Pakistan is looking to diversify its export markets by tapping into Afghanistan and the Central Asian Republics (CARs). This strategic shift aims to enhance trade potential despite facing political and logistical challenges.
Traditionally, Pakistan’s export destinations have been western economies, China, and the Gulf Cooperation Council (GCC) region. However, the focus is now expanding towards landlocked Central Asian countries and the South African region to diversify its export portfolio.
Data indicates a significant rise in Pakistan’s exports to the five Central Asian countries—Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. From July to February 2024, exports increased by 21.17 percent, reaching $158.07 million, up from $130.45 million during the same period the previous year.
Commerce Minister Jam Kamal Khan emphasized the importance of utilizing Pakistan’s natural resources, such as mining, minerals, agro-products, gems, and fisheries, to boost exports. He proposed opening new trade missions in regions with substantial trade potential to further this goal.
To fully realize the export potential to Afghanistan and the CARs, it is crucial to address the political and connectivity issues. Improved political relations and better logistical frameworks are key to facilitating smoother trade routes and operations.
Pakistan’s Strategic Position
Pakistan aims to position itself as a regional trade hub, leveraging its strategic geopolitical location to enhance its role in connecting the landlocked CARs with the rest of the world. Recent diplomatic engagements and economic activities between Pakistan and Central Asian states highlight this ambition. High-level meetings and investment talks with leaders from Uzbekistan, Azerbaijan, Tajikistan, and Turkmenistan are steps in this direction.
Trade with Afghanistan: Challenges and Opportunities
Afghanistan, being landlocked, relies heavily on Pakistan for transit and bilateral trade. However, strained political and diplomatic relations have hindered the development of formal trade routes. One significant issue is the logistics of ground transportation. Afghan restrictions prevent Pakistani transporters from directly carrying cargo to the CARs, necessitating partnerships with Afghan transporters. This has led to informal trade practices, with Pakistani exports often smuggled into the CARs via Afghan trucks.
Overcoming Logistical Hurdles
The logistical challenges, combined with expensive transportation costs, have prevented Pakistan from maximizing its potential in the Central Asian region compared to other regional competitors. To overcome these barriers, Pakistan needs to focus on improving transportation infrastructure and fostering stronger political ties with Afghanistan and the CARs.
By addressing political and connectivity challenges, leveraging its natural resources, and enhancing logistical frameworks, Pakistan can significantly increase its exports to Afghanistan and Central Asia. This strategic shift not only promises economic diversification but also positions Pakistan as a pivotal trade hub in the region.
