Trade with and via Afghanistan is the linchpin of PML-N policy
Question: How do you see the concept of regional connectivity and what is the vision of the PML-N government regarding the matter?
Khurram Dastgir: Regional connectivity is the key to fast economic development. Just take the example of the North American Free Trade Agreement (NAFTA) which was initially severely criticised by politicians in America.
However, within years of its implementation, the United States of America, Canada and Mexico benefitted enormously – thanks to the unprecedented boost in the intra-regional trade. However, South Asia has failed to increase regional trade.
We know that only a hundred years ago South Asia and South East Asia had the biggest route for international trade. Failure of resolution of political conflicts in South Asia has left the people of this region underdeveloped and backward.
Despite Pakistan’s strategic location, successive regimes have failed to benefit from our strength. Since we have three international ports, transit trade is the best option for Pakistan to benefit from in terms of economic development. The PML-N government has focused on enhancing trans-regional trade and this is also the linchpin of the economic and trade policies of Prime Minister Nawaz Sharif’s government.
Q: How do you view the political debate over CPEC? Do you think steps taken by your government have ensured provision of safeguards to the multi-billion dollar project?
KD: China Pakistan Economic Corridor (CPEC) would help Pakistan connect various nodes of intra-regional trade. This project is the first step towards translating the exceptional relations between China and Pakistan into expanding trade.
As far as CPEC safeguards are concerned, Prime Minister Nawaz Sharif has given full attention to ensure that all political parties remain committed to this national cause. We would make sure that successive governments in Pakistan remain committed to CPEC and hence two successive all parties conferences (APCs) were convened by the prime minister to ensure consensus among political parties over the matter.
The political questions being raised against CPEC reflect a parochial approach and narrow-minded vision. One must understand that CPEC is the backbone connecting Pakistan with the central Asia and East Asia region.
Q: Keeping in view improving relations with the Afghan government, what steps have been taken to increase trade with Afghanistan and other central Asian states?
KD: Afghanistan is a neighbour Pakistan has been supporting since decades. Trade with and via Afghanistan is the linchpin of our policy.
We are reviewing the Afghanistan Pakistan Transit Trade Agreement (APTTA) and opening of three border crossings for trade are being discussed. We are also in talks with Afghan government to include Tajikistan in the APTTA.
APTTA is being revised in light of the convention on the International Transport of Goods (TIR) to make the accord more appropriate for facilitating transit trade between the two countries.
The two sides have decided to organise a pilot run of Afghan trucks from Torkham and Chaman up to Wagah carrying Afghan exports to India and Pakistani trucks from Torkham and Chaman carrying Pakistani exports to Shir Khan Bandar (Tajikistan’s border).
Afghan trucks will be allowed to carry Pakistani exports to Afghanistan on their return journey. Similarly, Pakistani trucks will be allowed to carry Tajik and Central Asian export cargo on their return journey to Pakistan.
For the movement of trucks in the territory of the two countries, the Afghan side proposed finalising the bilateral transport agreement. Pakistan agreed to provide the draft agreement through diplomatic channels within one month.
We are also taking bold steps to reduce scanning at border ports at the request of the Afghan government. Last year, the scanning of trade material was reduced from 100 per cent to 20 per cent to help facilitate matters and put trade on a fast track. By the way, since the trade volumes are rising, in future 100 per cent scanning would also not be possible. So we decided to facilitate the Afghan trading community.
Another option we plan to offer to the landlocked countries in Central and South Asia is using Pakistani ports for trade. The way Afghanistan is benefitting from Pakistani ports, we are open to Nepal, Bhutan and other landlocked neighbours to benefit also.
We are also planning to establish a Land Ports Authority to integrate the trade routes. It would also help regulate trade through the seas.
The Asian Development Bank (ADB) has approved a $250 million loan for Pakistan to boost cross-border trade activity by reducing customs processing time for cargo and goods at three key border points of Chaman, Torkham, and Wagah borders.
Though we are in full facilitation mode towards Afghanistan, we are still suffering as the Afghan government is not reciprocating steps taken by Pakistan.
Another major breakthrough is that Pakistan, Afghanistan Kyrgyzstan and Tajikistan have signed an agreement for energy transit route for KASA 1000 project. Under the agreement, 1300 megawatts of electricity would be transmitted from Kyrgyzstan into Pakistan through Tajikistan and Afghanistan. Pakistan would be transmitted 1000 megawatts while Afghanistan would get 300 megawatts.
Another breakthrough has been made with regard to Turkmenistan, Afghanistan, Pakistan, India (TAPI) and the project is likely to be completed in 2019. TAPI’s economic benefits include generating employment along its route that has the capacity to enhance regional integration that would, over time, not only usher in an era of prosperity but also ease existing mistrust within the conflict-ridden South Asian region.
Hence, Pakistan is all set to emerge as a leader in regional connectivity. A regional free trade agreement is also the vision of Prime Minister Nawaz Sharif.
Q: How do you view demands from various quarters for a review in the visa regime to help boost foreign investment?
KD: The Pakistani government is considering easing the visa regime with its neighbours and other regional countries to ensure connectivity and free trade. Yes, there might be questions on the security mode of the country.
But I believe if we keep raising walls on our borders, we can’t grow economically and in terms of regional connectivity. We seriously need to liberalise the visa regime. If we are committed to turning into a trading-friendly economy, we need to review the visa regime.
Today, despite its strategic location, Pakistan is not a part of the global value chain. We need to review our trading mode to ensure that Pakistan’s ideal location is used for its advantage. Only a trade facilitating mode can attract foreign investment.
The target of Prime Minister Nawaz Sharif is to take the GDP growth rate to six per cent, while seven per cent would be ideal.
Other than facilitating the international and trans-regional trade, Pakistan also needs to raise the capacity of its workforce involved in border management and ports. But we don’t have the luxury of time so we need to raise capacity of our management on the go.
Q: How do you view Pakistan-India trade? Do you see this trade volume increasing anytime soon?
KD: Let me tell you frankly that Pakistan-India trade would not normalise until and unless our deep-rooted diplomatic issues are solved. But we have allowed Afghanistan to freely trade with India through the Karachi port. However, we have informed the Afghan government not to make bilateral cooperation conditional to trade with India.