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Millions in US dollars smuggled into Afghanistan from Pakistan daily

Millions of dollars are being smuggled into Afghanistan from Pakistan every day, providing some support for the fragile economy.
Muhammad Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan, told Bloomberg that traders and smugglers bring as much as $5 million across the border daily, which more than covers the as much as $17 million that Afghanistan’s central bank injects into the market each week.
The illicit cash flows show how the Islamic Emirate of Afghanistan (IEA) is evading sanctions after their 2021 takeover of the country, Bloomberg reported.
For Pakistan, however, it’s contributing to the depletion of foreign reserves and adding to the downward pressure on the rupee as the currency tumbles to record lows and the economy teeters on the edge of collapse.
“Currency is being smuggled without any doubt,” Paracha told Bloomberg. “This has become quite a lucrative business.”
“Afghanistan has about a $10 to $15 million requirement on a daily basis,” said Khurram Schehzad, chief executive officer at Alpha Beta Core Solutions Pvt Ltd., a financial consultancy in Karachi. Half of this is estimated to come from Pakistan, he said.
Da Afghanistan Bank, the country’s central bank, has enough dollars in reserve to support the economy, the bank’s spokesman Haseeb Noori told Bloomberg.
However, some of it comes from the UN, which has been providing about $40 million in humanitarian aid each week since late 2021.
This cash is transported by air to Kabul each week and much of it then needs to be converted into afghani after it arrives. So even though the aid doesn’t directly benefit the IEA, the dollars ultimately end up in the central bank’s coffers, Bloomberg reported, adding that the UN wasn’t immediately available to comment.
According to the report, the afghani has gained about 5.6% against the US dollar over the past year through Monday, one of the strongest performances of any currency in the world.
This while Pakistan’s rupee has lost about 37% against the US currency over the same period, one of the largest declines. It fell about 10% in one day in late January, the biggest drop in at least two decades, as the crisis-stricken government relaxed its grip over the exchange rate in a bid to win much-needed loans from the IMF, Bloomberg reported.
However, according to Bloomberg, the smuggling of US dollars into Afghanistan really took off in the middle of last year after Afghanistan increased coal exports to Pakistan.
In addition, it has been boosted by the IEA’s ban on the use of Pakistan’s rupee as legal tender in Afghanistan, which forces exporters to trade in dollars and bring the US currency back to the country, the officials told Bloomberg.
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Lebanon and Afghanistan named unhappiest countries in the world

According to the annual World Happiness Report, Afghanistan (ranked 137) and Lebanon (ranked 136) are the two unhappiest countries.
The report includes six key factors to help explain variation in happiness levels, namely social support, income, health, freedom, generosity, and absence of corruption.
According to the survey, Finland remained in the top position for the sixth year, followed by Denmark, Iceland, Israel, and the Netherlands. In contrast, Afghanistan and Lebanon remained the unhappiest countries, preceded by Sierra Leone, Zimbabwe, and Congo.
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1401 In Review: Diplomacy a focal point for Afghanistan

The Islamic Emirate of Afghanistan (IEA) has made extensive efforts on the diplomatic front to open a new chapter in political relations with the world in the past 12 months.
Although these efforts have not yet led to any country officially recognizing the IEA government, the Islamic Emirate’s flag has been raised at a few foreign missions in the region.
Russia, China, Turkey, Iran, Pakistan, Uzbekistan, Turkmenistan, Kazakhstan, Qatar and the United Arab Emirates have allowed the IEA to post its diplomats to the embassies of Afghanistan.
The messages of almost all of Afghanistan’s neighbors, except for Tajikistan, in the field of fighting terrorism, human rights and sovereignty, have been comprehensive, which have been described as largely aligned with the interests of the United States.
In the past twelve months, the political representations of European countries in Afghanistan have continued to operate only for the purpose of coordinating humanitarian aid.
India meanwhile also has a technical team to coordinate humanitarian aid in Afghanistan.
Foreign Minister Amir Khan Muttaqi has said that the Islamic Emirate respects the interests of other countries and in return asks them to have similar interactions with the IEA.
This goal has been expressed many times by Mullah Abdul Ghani Baradar, Deputy Prime Minister of Economy. He has said the IEA has a balanced and economy-oriented foreign policy and wants to have friendly relations with all the countries of the world.
Over the past 12 months, the countries of the region and the world also hosted meetings for Afghanistan, but almost no representative of the Islamic Emirate was present at most of these gatherings.
At the joint meeting of the Organization for Security and Cooperation in Europe held in Tashkent at the end of this solar year, the Minister of Foreign Affairs of Uzbekistan suggested the establishment of an international negotiating group to carry on negotiations with the IEA.
Russian President’s Special Envoy to Afghanistan Zamir Kabulov also made similar statements and emphasized that Afghanistan should not be in political isolation on the world stage.
Questions have however been raised as to why the world, especially the US and Western countries, did not have a clear and specific strategy for Afghanistan in the past year, and why countries did not deal with Afghanistan through multilateral diplomacy.
“Some of our neighboring countries have interactions based on their own interests in the framework of “de facto” relations, the countries of the world wanted to interact at the beginning, and according to one of the ambassadors of the European countries, the world’s interaction with the Taliban (Islamic Emirate) is going in a negative way,” said Aziz Bariz, an international relations analyst.
Meanwhile, the Islamic Emirate hopes that in the new solar year, it will be able to further strengthen its relations and political ties with the countries of the region and the world, and as a result, achieve positive interactions with the world and establish friendly relations with international legitimacy.
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IEA’s supreme leader orders torching of drugs

In a new decree, the supreme leader of the Islamic Emirate of Afghanistan Hibatullah Akhundzada ordered all drugs and drug paraphernalia to be burned, according to a statement published by the Administrative Office.
Based on the decree, the drug dealers and producers will be punished and the tools and equipment used in the production of drugs should be destroyed.
According to the decree, the joint board of the Ministries of Interior and Public Health and the Directorate of General Intelligence has been tasked with burning drugs and equipment used in drug production in public in the presence of the relevant court.
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