Business
IEA discusses easing banking transactions with Kazakhstan
A delegation of the Islamic Emirate of Afghanistan (IEA) discussed facilitating international financial transactions with private banks on a recent trip to Kazakhstan in a bid to ease the Afghan banking sector’s isolation, the acting commerce minister said.
Nooruddin Azizi, acting Minister of Commerce and Industry, led a business delegation to Kazakhstan last week.
In addition to banking he discussed the possibility of preferential trade tariffs, telecommunications projects and transit routes, including for possible shipments of Russian oil to South Asia, he told Reuters in an interview on Wednesday.
“We had teams from Da Afghanistan Bank (Afghanistan’s central bank) and private banks in Kazakhstan, they discussed and are trying to find good ways to decrease the price of financial transactions … we don’t have any banking limitation with Kazakhstan,” he said.
Afghanistan’s banking sector has been hampered and international transactions severely limited since the IEA administration took over two years ago as foreign forces withdrew.
Some IEA leaders are subject to United Nations and United States sanctions. Many international banks have limited transactions with Afghan banks to reduce risk, economists and diplomats say, contributing to a stall in the financial system.
That has been exacerbated by the United States and other governments freezing Afghan central bank assets held abroad.
Azizi also said transactions that went ahead often incurred expensive fees, sometimes 5% of the transaction, which they hoped to reduce.
Fixing Afghanistan’s banking sector was a priority, he said, adding that there are no sanctions directly on banks. But he acknowledged international financial institutions were not easily facilitating transactions.
“It is the preference of some banks that they don’t want to deal with Afghanistan, they might think the trade volume is low, but for us it is very important,” he said.
The United States has issued exemptions to sanctions for humanitarian operations and at times helped facilitate specific transactions, such as an Afghan central bank payment to European companies to buy fresh bank notes.
But traders and international agencies say normal banking has not been restored, hampering the economy and causing headaches for traders and aid programs.
The United Nations, which uses billions of dollars a year to fund humanitarian operations, has to fly in pallets of cash in physical shipments to Kabul.
Deputy Prime Minister for Administrative Affairs Abdul Salam Hanafi says Afghanistan has the potential to become one of the most important industrial centers in the region.
Speaking at the opening ceremony of the national and international expo on the occasion of Industry Week, Hanafi said that the growth of industry lays the foundation for the growth of other economic sectors and that the Islamic Emirate fully supports domestic production in the country.
“Afghanistan has important and rich factors for industrial production, which can become one of the important industrial centers in the region. The growth of industry will be the basis for the growth of other economic sectors, especially agriculture,” said Hanafi.
Acting Minister of Industry and Commerce, Nooruddin Azizi, added that the IEA has programs in the fields of industry development and support for the private sector that will make Afghanistan self-sufficient.
Azizi stated that Afghanistan’s industrial sector is currently progressing and the quality of export goods has also improved.
Some investors said at the ceremony that after the return of the IEA, the country’s exports have increased and the number of manufacturing companies has also increased.
This expo is open to visitors for seven days, and industrial products are showcased in 450 booths.
Women in business also attended the meeting.
Afghanistan and Pakistan have agreed on the issuance of a temporary admission document for transporters of commercial goods, Afghanistan’s Ministry of Transport and Aviation announced on Sunday.
The ministry said in an announcement that truck drivers and their assistants carrying commercial goods from Afghanistan and Pakistan must have this document with them at the crossings.
Based on the announcement, the document will be issued to Afghans at the Pakistani embassy in Kabul and its consulate in Kandahar.
For Pakistanis, the document is distributed at the office of the Afghanistan transport attaché in Peshawar and Quetta.
The Ministry of Transportation and Aviation asked owners and drivers of trucks to submit the required documents to their respective transportation companies by June 1.
The ministry warned that after June 1, trucks cannot travel between the two countries without having the temporary admission document.
Pakistani officials have announced that consultations are underway with stakeholders on preferential trade agreements with Afghanistan and Azerbaijan.
According to Dawn newspaper, the issue was announced on Friday in a meeting on trade chaired by Pakistan’s Prime Minister Shahbaz Sharif.
In the meeting, the strict monitoring of Afghan Transit Trade was also emphasized.
Pakistani officials have not provided further details on preferential trade with Afghanistan and Azerbaijan.
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