Factors like transportation, port infrastructure and customs as a facilitator of trade are also worth exploring. Presently, for regional connectivity along with transport corridors & port infrastructure, the role of government agencies especially Customs is very important.
Pakistan is importing and exporting goods to and from Afghanistan, Iran and China through land routes whereas trade with India has been closed. Only Afghanistan has been using the land of Pakistan for transit trade. China had shown keen interest to import goods through the port of Gwadar under CPEC and construct an oil transport corridor, linking the port city with Xinjiang, but there have been no headways so far. Pakistan’s seaports and land can be utilized for transit trade by Iran, China and India. There has been no such progress to date. However, for the Afghanistan Transit Trade, Pakistan Customs has put in place effective procedures and rules.
Customs procedures are continuously being improved to reduce dwell time, simplify regulatory mechanisms, and processes and ensure the integrity of the staff. The designated Customs station for the transit of goods is Karachi, Chaman, Ghulam Khan, Torkham, Sost and Wahga. The prevalent Customs procedure for the transport of transit goods is fully operational and working smoothly for many years. Improvements are constantly being made. As per prevalent procedure, Transit Cargo arrive from foreign destinations at Karachi or Port Qasim, unloaded, 20 per cent of which is scanned, sealed, reloaded on trucks fitted with a security tracking device and leaves the port area. The goods when reaching Torkham, Chaman or Ghulam Khan Customs station, the same formalities are repeated, the seals and tracking device are checked and the containers are cross-bordered. The system is working smoothly, which reveals that the number of containers that crossed into Afghanistan in the financial year 2021-22 has remained stable with the exception of recent Taliban rule.
Despite having immense potential with its population, market resilience, growth in the agriculture sector, and contribution to the world labour force, the ECO is unable to achieve its true potential.
Besides the transport of forward and reverse transit cargo of Afghanistan, Pakistan has also exported a few goods to Uzbekistan, which constitute the transit trade of Afghanistan. Mechanisms have been adopted and have evolved to ensure the safety of goods in transit. The tracker system has been outsourced to a private firm specialising in security. A tracker is placed on each vehicle carrying a container. The system is linked through satellites with central control rooms at various places in the country. The container’s movement can be checked live. There are four types of alerts, which are generated by the systems i.e., door alerts, unusual stoppage, deviation of the route, and tampering with the tracking device. Pakistan’s transit trade is restricted to only one country despite its regional trade connectivity potential being much greater than that.
Customs ports have congestion issues at Karachi and Port Qasim. Unlike commercial imports for Pakistan, where customs formalities are at times conducted outside port areas, all the formalities take place at the port area for the Afghanistan-bound cargoes. This results in choking, which sometimes becomes so serious that customs formalities have to be compromised by clearing the cargo at the minimum possible time. Similarly, there are port infrastructure issues at Gwadar, Torkham, Ghulam khan, Chaman and Wahga.
A program for the development of ports at Torkham, Chaman and Wahga also known as the Integrated Transit Trade Management system conceived and funded by Asian Development Bank (ADB) is underway, which focuses on the development of physical infrastructure and environment-compliant development. Similarly, work on Gwadar port development is also underway. And very soon, Gwader Airport is also going to be formally inaugurated and fully operationalized.
The road network for the transport of Cargo from Karachi to Afghanistan via KP and Baluchistan is reasonably good, which is fulfilling the needs of the cargo load. The roads, however, need to be upgraded if the time of transportation has to be decreased further. Especially, the new routes, which are being established under CPEC presently have a single-lane road network, which is improper for the movement of container traffic. Furthermore, the rail network is very important and needs to be upgraded.
Despite having immense potential with its population, market resilience, growth in the agriculture sector, and contribution to the world labour force, the ECO is unable to achieve its true potential for a number of reasons. ECO is focused inwards. Its aim is to trade amongst the member countries and not with the outward target markets. It is imperative to understand that any rail /road connectivity aimed at regional trade expansion will only be beneficial if the target markets are properly identified.
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Abdul Rauf studies at Jiangsu University of Science & Technology, China. He is interested in emerging technologies & Pan-Asian economies.Saud Bin Ahsen is a freelancer. He can be reached at [email protected].