Border Closures and Trade Paralysis
The border between Pakistan and Afghanistan has been largely closed for over three months, beginning in mid-October.
This prolonged closure, the longest in recent decades, has halted trade between the two nations and paralyzed a crucial transit route extending across Central Asia. Afghan truck drivers and traders, such as Anwar Zadran, remain stranded with goods near border crossings like Torkham, experiencing significant economic hardship.
Underlying Dispute
The border closures stem from a dispute regarding security and militancy. Pakistan has repeatedly stated that Afghanistan harbors militant groups, including the Tehreek-e-Taliban Pakistan (TTP), which Pakistan alleges carry out attacks on its soil. Afghanistan's Taliban government denies these accusations.
The situation escalated with cross-border firing in October, followed by an unsuccessful ceasefire and multiple rounds of failed peace talks in Istanbul, Doha, and Riyadh.
Pakistan's Prime Minister Shehbaz Sharif indicated that border closures were necessitated by the Taliban government's inability to commit to stopping militant operations from Afghanistan. Conversely, the Taliban government asserts that Pakistan uses border closures as a tool for economic and political pressure.
Economic Ramifications
The trade disruption has led to substantial financial losses. Traders in Peshawar, approximately 40 miles from the Torkham border, are exploring alternative export routes through China and Iran, though both options present challenges related to unclear policies, international sanctions, and political instability.
Shahid Hussain, a trader, estimated losses of around $400,000 from damaged and expired goods and has ceased employee salaries.
The closures affect not only goods moving between Pakistan and Afghanistan but also those destined for Afghanistan from other Asian countries, with some shipping containers stalled at Pakistan's Karachi port.
Naqibullah Safi, secretary general of the Pakistan-Afghanistan Joint Chamber of Commerce and Industry, reported minor price increases for essential goods like rice, medicine, and cooking oil in Afghanistan. Abdul Salam Jawad, Afghanistan's commerce ministry spokesperson, reported a $300 million decrease in Afghanistan's exports to Pakistan last year.
Pharmaceutical Sector Impact
Afghanistan, which relies on Pakistan for over 60% of its medicine, faces additional challenges after the Taliban government imposed a ban on Pakistani pharmaceuticals, citing quality concerns.
This ban, potentially ongoing even if borders reopen, affects Pakistan's yearly pharmaceutical exports to Afghanistan, valued at approximately $200 million.
Concerns have been raised about the potential waste of temperature-controlled medicines stuck in transit and the impact on patients requiring critical medications.
Attempts at Resolution
Business leaders from both countries have established a joint committee, conducting online meetings to assess the situation and advocate for border reopening.
However, their leverage is limited, as the Pakistani government's primary focus remains resolving security issues. Representatives from both sides acknowledge the severe impact on the private sector and the general populace.