Every country depends on trade with foreign countries to run its economy. Countries prefer to trade with neighbouring and regional countries as it reduces transit costs and provides an opportunity to improve bilateral relations.
The relations between Pakistan and Afghanistan have not been ideal since the US-backed government came to power in Afghanistan after the 9/11 tragedy. As a result, Afghan transit trade was severely affected for the past several years. The tense relations have led to a decline in imports and exports, as well as a decrease in foreign exchange. But now the situation in Afghanistan has changed drastically. The government of the Islamic Emirate in Afghanistan has a soft spot for Pakistan, providing ample opportunities for increasing trade.
The climate of animosity and rhetoric with Afghanistan is finally over and the new Afghan government has brought a message of peace and stability. If peace is established in Afghanistan, it will have a positive impact on both countries, and transit trade will increase manifold. In the current situation, Pakistan should take steps to increase trade with Afghanistan. It can not only export but also import many items which can save precious resources.
Along with the political changes in Afghanistan, we must also take advantage of the economic situation. The ramifications of political changes occur over time but the economic changes can have their effect quickly and help both countries improve their economies. Pakistan failed to take full advantage of the GSP Plus status received from the European Union in 2014-15. Pakistan could have increased exports by $1.5 to 2 billion but was unable to increase trade with Europe and missed out on the opportunity.
The increase in trade will not only stabilize the economy but also create employment opportunities. Pakistan has the ideal time and favorable conditions to reduce unemployment in the country.
Pakistan has a golden opportunity to manage its economy by promoting trade with Afghanistan after peace has been restored in the region.
The fear and apprehension in the minds of traders is a major obstacle in promoting trade with Afghanistan. Many businessmen believe that they could face dangers in doing business with Afghanistan. Thus, they are hesitant in making costly deals as they want to work in a risk-free environment to conduct business.
After years of political upheaval, we have seen a lot of positive developments since the new government took control in Afghanistan. The government of Pakistan should create an environment for risk-free business and persuade traders to conduct business. We cannot boost trade with Afghanistan until and unless out apprehensions are not addressed.