Crisis-ridden Afghanistan has been badly impacted by the economic, and political instability of Pakistan.
Apart from that issues such as repeated border closures and persistent tensions between the two sides over the Durand line have hampered trade inflows in Kabul.
“It is time for Kabul to come out of Islamabad’s grip as the latter only intends to exploit Afghan resources to boost its own trade and economy. A failing neighbour would indeed be a stumbling block for Kabul’s development and a country which is aspiring to meet at least the basic needs of its population in the immediate future, Afghan Diaspora Network reported
Afghanistan’s trade volumes, as well as economic empowerment, have been dependent on Pakistan for so many years. Due to this dependency, Kabul, which is already facing an economic crisis after the regime change in August last year, is now facing new difficulties on account of the fast deteriorating economic situation in Pakistan, Afghan Diaspora Network reported.
Pakistan’s political crisis has begun to hit its worsening economic situation turning the conditions very painful and pitiable. Citizens’ anger and frustrations are at it’s peak in the country. Inflation is skyrocketing while peoples’ purchasing power is fast declining.
The increasing size of the external debt servicing in each quarter indicates the government has been borrowing dollars at higher commercial rates to meet its foreign debt repayment obligations, the Afghan Diaspora Network reported.
Pakistan’s economy was badly managed over the last several decades and this is now being increasingly noticed internationally.
Following this, the ongoing situation is considered as Pakistan has run out of money.
Afghanistan is faced with both shortages of goods and foreign exchange, Pakistan’s policy objective is to compel Afghan traders to opt for Pakistani exports. Islamabad is trying to exploit Afghanistan’s economic difficulties to boost Pakistani exports and benefit its producers.
Reports say that port connectivity is the major issue in increasing Afghan trade.
However, Karachi port which provides connectivity to Afghan trade faces perpetual congestion. Though Pakistan offers its prestigious Gwadar Port route for Afghan trade, the port is currently underdeveloped and managed by the Chinese.
The Gwadar Port suffers from a number of difficulties like the inhospitable conditions of Baluchistan as well as harsh climate, besides shortages of water, power and other infrastructure. On top of it, the entire project is perceived as being beneficial only to China and to the Pakistani elite.
Pakistan’s clamping down on Afghanistan’s trade flows as well as repeated border closures is adversely affecting Kabul’s trade. Due to the unpredictability of Pakistani policy and difficulties in bilateral trade, Afghanistan is searching for alternative markets and routes to keep its foreign trade alive.