ISLAMABAD: July 29, 2022. Forex Dealers Association of Pakistan (FDAP) chairman, Malik Bostan Khan has said Pakistan is taking hit of $ over 2 billion in imports every month due to rising trend in the prices of petroleum products in global market and trade with Afghanistan in local currency .
Talking to NEWSMAN from Karachi by phone on Friday, Malik Bostan Khan, FDAP chairman, said he has proposed to Finance minister, Miftah Ismail to immediately stop trade with Afghanistan in local currency and substitute it with barter trade. He believes in the first step trade with Afghanistan will provide much- needed relief to Pakistan and strengthen its currency against US dollar.
Mr Malik said when Taliban took over in Afghanistan on August 16, 2020, Pakistan’s imports were hovering around $ 4 billion a month and the rupee value was 157 to a dollar and Pakistan’s forex reserves were $ 20 billion and now in July 2022 Pakistan is spending $ 7 billion on its imports and its forex reserves have fallen down to $ below 9 billion and its currency value has also gone down to Rs 240 to a $ dollar. Malik Bostan Khan argued that two factors–rising prices of petroleum products in global market and exports to Afghanistan have contributed in a big way to push Pakistan into a serious economic crisis and his proposal to allow exports to Afghanistan on barter trade basis can bring quick relief to Pakistan’s weakening economy.
” Afghanistan is not in a position to pay in US dollars for imports from Pakistan and keeping in mind the same problem i suggested to Miftah Ismail to substitute exports to Kabul with barter trade”, Bostan Khan asserted.
He said Pakistan is paying in US dollars for imports and then selling the same in local currency to Afghanistan and its one of the major reasons of rising demand of US currency in the local market.
In the given situation when Pakistan is in sluggish waters and finding difficult to sail through its on-going economic crisis it can not keep going for a trade of buying things in US dollarts and selling to Afghaqnistan in local currency .
Malik Bostan Khan’s proposal of barter trade with Afghanistan is a good idea . It can stop Pakistan bleeding immediately without having adverse affect on Kabul.
With coming in Taliban rule in Afghanistan its dependence on Pakistan has either increased or it has turned Kabul into a transit for supply of Pakistani products to the Central Asian Republic (CARs).
Pakistan’s official data suggested that Pakistan’s trade with Afghanistan in August 2020 when Taliban took over in Kabul was hovering around $ 4.5 billion and bilateral trade between Pakistan and Afghanistan was in US currency.
Then on the request of Taliban -led Afghanistan government, Pakistan allowed trade with Kabul in local currency and this one decision turned trade with Afghanistan into a nightmare .
Afghan traders import flour, cement, steel , lentils name anything from Pakistan in the local currency ( Pak rupee) and sell it to CARs in US dollars. The increase in size of imports to Afghanistan is self-explanatory. The official data showed that exports from Pakistan to Afghanistan has gone from $ 4.5 billion in August 2020 to $ 7.5 billion in June 2022.
Pakistan has always been a source of supplies for almost everything right from wheat flour to ghee to steel and cement and so on so forth. Pakistan takes Afghanistan as its dearest and closest brotherly Islamic county and both countries have unflinching relationship through a bond of cultural and religious relationship.
In no circumstances Pak-Afghan relationship can be ignored or even think to ignore by Pakistan. Being neighbour Islamic county, Afghanistan is dependent on Pakistan to meet its demands from edibles to trade. Under UN charter, Pakistan is also duty bound to facilitate landlocked Afghanistan for its all types of needs.
Pakistan thinks even beyond its duty in the case of Afghanistan and always stands fast to help that country in difficult times. Despite financial problems, Islamabad provides financial support to Kabul irrespective of having consideration who rules that country. It rushes out to help Kabul in the case of any natural disaster like earthquake or flooding.
For the sake of arguments, one can say and it cannot be denied that Pakistan is major beneficiary of around 40 million Afghan market, but at one stage when you are already in shabby waters and finding difficult to shore- off only additional burden of a straw can drown you in the middle of flood waters.
Pakistan’s decision to allow exports to Afghanistan in local currency literally turned the same straw and this black hole needs to be plugged off before it get too late.
Pakistan also need to plug off loopholes at Pak-Afghan border points to stop illegal trade between the two countries . Since these are testing times for Pakistan its agencies should ensure zero smuggling between Pakistan and Afghanistan .
