Prolonged border closure with Afghanistan worsens Pakistan's economic crisis

Karachi [Pakistan], November 30 (ANI): The ongoing closure of the Pakistan-Afghanistan border since October 11 has dealt a severe blow to Pakistan's trade, manufacturing, and export sectors, worsening the country's already fragile economic situation.

The standoff has not only halted two-way trade but also triggered shortages, price hikes, and production disruptions across key industries that depend on Afghan routes for imports and exports, as reported by Dawn.

According to Dawn, the cement industry has been among the hardest hit. Imports of Afghan coal and exports of cement to Afghanistan have completely stopped, forcing manufacturers in northern Pakistan to rely on costlier coal imports from South Africa, Indonesia, and Mozambique.

The price of Darra (local) coal has jumped from Pakistani currency (PKR) 30,000-32,000 to PKR 42,000-45,000 per tonne, while Afghan coal, previously available at PKR 30,000-38,000, has vanished from the market. Firms like Cherat, Fauji, and Maple Leaf Cement are facing significant financial setbacks, as exports to Afghanistan accounted for a notable share of their revenues.

The pharmaceutical sector, too, is suffering from the shutdown's effects. Kaiser Waheed, former chairman of the Pakistan Pharmaceutical Manufacturers Association, stated that Pakistan exports medicines worth USD 187 million annually to Afghanistan, while the actual volume, including informal trade, is nearly three times higher. With border routes blocked, exporters have large consignments stranded at factories, while some drugs cannot be diverted to local markets as they are not registered for sale in Pakistan.

The Searle Pakistan has already estimated a potential PKR 2 billion loss if the situation continues, as cited by Dawn.

Trade paralysis has extended to agricultural goods as well. Pakistan's USD 150 million fruit and vegetable exports to Afghanistan and Central Asian states have nearly come to a halt, with many consignments dumped or destroyed.

Prices of imported fruits like pomegranates and grapes have doubled after supplies from Afghanistan dried up. With over 9,000 containers stuck at ports and border points, business leaders have described the situation as alarming, as reported by Dawn. (ANI)

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