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ADB report states 70% of Afghan transit trade diverted through Iran
The Asian Development Bank (ADB) said in a recent report that although Afghanistan has traditionally relied on Pakistan as a gateway to international shipping routes, recent trends indicate that 70 percent of Afghan transit trade is now diverted through Iran.
The ADB’s Corridor Performance Measurement and Monitoring (CPMM) Annual Report 2019, published this week, stated that Pakistan is still facing challenges in terms of removing barriers for road transport.
This shift away from Pakistan has been driven by lower costs from foreign ports and more attractive security deposit and detention tariffs for transit containers from shipping lines that operate at Iran’s seaports.
The report stated that in addition, diesel fuel in Iran ($0.06 per liter) is significantly less expensive than in Pakistan ($0.86 per liter), which provides an additional edge in terms of cost competitiveness.
Also, in the absence of a formal agreement with Pakistan, shippers and carriers face uncertainty in transit procedures, it added.
The report further stated that the CPMM trade facilitation indicator (TFIs) reported longer average border-crossing time, although relatively unchanged average border-crossing cost.
Total average transport cost showed an improvement, but both measures of speeds showed that trucks did not move as fast compared to 2018. The average border-crossing time between Afghanistan and Pakistan increased to 38.2 hours.
The time to cross Chaman was 60.1 hours, ranked as the most time-consuming border crossing point in 2019.
Peshawar took 45.8 hours and ranked the third most time-consuming, the report stated.
These samples were estimated from commercial shipments carrying goods destined for Afghanistan as well as Central Asia.
Following the approval of its National Transport Policy in 2018, Pakistan embarked on a series of reforms and initiatives to address structural inefficiencies and impediments, to increase exports through lowering cost and lead time of transportation.
The report recommended the implementation of the national single-window system and port community system (PCS) to reduce cargo dwell time in seaports.
It said better parking area design and queuing systems could improve efficiency and speed up border crossing.
Pakistan does not yet have a domestic regulation on the international carriage of goods on road, which is a fundamental condition to implement the Carriage of Goods by Road (CMR).
The report also stated that greater adoption of freight on rail and inland waterways would reduce freight costs and boost low-unit value exports such as agricultural produce.
Afghanistan and Pakistan have however reactivated talks on the Afghanistan–Pakistan Transit Trade Agreement 2010, which aims to attract transit from Central Asia to seaports south of Pakistan, the report stated.
Nooruddin Azizi, Acting Minister of Industry and Commerce, met with Russia’s Deputy Prime Minister Alexei Overchuk to discuss trade and investment, it was announced on Friday.
Sergey Pavlov, General Director of Russian Railways, and Dmitry Zverev, Deputy Minister of Transport of Russia, were also present in the meeting, the Ministry of Industry and Commerce said in a statement.
According to the statement, the two sides discussed increasing the volume of trade, preferential tariff for Afghan goods, Russian investment in mines and water dams in Afghanistan, and Afghanistan’s role in the International North–South Transport Corridor.
They also discussed about reducing the cost of transportation through the Russian railway, removing the export tax on basic materials, arranging the trip of the delegation to the ports of Astrakhan and Makhachkala, and holding a trade connectivity conference and an expo of Afghan products in Moscow.
Azizi met with the Russian deputy PM on the sidelines of the Kazan Forum – the 15th International Economic Forum of Russia and the Islamic World.
He also met with representatives of a number of Tatarstan and Russia companies and encouraged them to invest in Afghanistan.
The Ministry of Commerce and Industry said Thursday acting minister Nooruddin Azizi met with the leader of Russia’s autonomous republic of Tatarstan, Rustam Nurgaliyevich Minnikhanov, on the sidelines of a meeting in Kazan.
According to the ministry, Azizi met with Minnikhanov on the sidelines of the Kazan Forum – the 15th International Economic Forum of Russia and the Islamic World.
The two officials discussed bilateral trade relations, the establishment of the Russian Trade House in Afghanistan, the visit of Minnikhanov to Kabul, investment in electricity production, water transfer, mining, cultural and economic cooperation and other matters.
This annual meeting is held by Russia and the 14th round of this meeting was also held in the same country last year.
The main goal of the forum is to strengthen trade and economic, scientific and technical, social and cultural ties between Russian regions and the countries of Organisation of Islamic Cooperation (OIC), as well as to promote the development of the Islamic financial system institutions in Russia.
The National Statistics and Information Authority (NSIA) said on Wednesday that last year, the value of exports totaled $1.79 billion while imports totaled $8.57 billion.
According to NSIA, fruits accounted for the largest share of export items last year, totaling over $645 million.
Medicinal plants, minerals and vegetables were the next top three items respectively to be exported.
Meanwhile, petroleum and oil accounted for the largest portion of imported goods, totaling over $1.37 billion.
Another large portion of the total amount imported went to machinery, vehicles and parts. This totaled over $1.15 billion, followed by textiles, metals and metal products.
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