Border trade zone
With agriculture sparse on both sides of the Durand Line that divides Pakistan and Afghanistan and with zero manufacturing capacity, the inhabitants of the area cannot even eke out a meagre existence. For every 100 able-bodied men, there are only five or six available jobs. With almost nothing else to fuel the local economy, the only work for the male population that lives astride the borders is to be a hired gun, mostly for the highest paymaster. Often, this is the only means of earning a livelihood whether it be for the purpose of smuggling, as part of the tribal militia, paramilitary forces, or the Taliban.
It doesn’t take a genius to figure out that economic initiatives must be given preference if peace is to be restored on both sides of the border. Of the more than three million Pathan construction workers whose sweat and blood went into the concrete of infrastructure projects in the Middle East in the 1970s and during part of the 80s, more than 40 percent came from Fata and adjacent borders areas. A fertile recruiting ground for the Mujahideen, once the Middle East spigot of foreign remittances was turned off and the Afghan War started, this area became a logistics launch pad for operations in support of Mujahideen operations across the border.
Heavily weighted in favour of Afghanistan – to our detriment – the recently signed Afghan Transit Trade Agreement (ATTA) is a ridiculous document which needs phasing out and then eventually stopped. The only exception to transit trade must be the Afghan government’s official imports of essentials; they must pay adequate transit fees to cater for the wear and tear of our roads and railways.
Promised setting up by the US as far back as 2006, the proposed “Reconstruction Opportunity Zones” (ROZs) is an attempt to correct the economic imbalance but is really just a patchwork solution that cannot function practically on the ground. The ROZ concept is interlinked with the US economy – because of opposition from vested lobbies the legislation has already failed twice in the US Congress. In the proposed Border Trade Zone (BTZ) concept, US (and international) donor aid is only required for the development of roads and communications. The BTZ is thus Pakistan-centric rather than taking away something from the US economy. If the proposed ROZs continue to remain inactive indefinitely what options are we left with for a long-term solution to alleviate the poverty of the people of Fata?
A contiguous BTZ must be the economic force-multiplier for transforming the lives of the people of the tribal areas. Instead of earmarking small areas as ROZs, all of Fata and other border districts adjoining Pakistan and Afghanistan should be designated as a BTZ, a free inland dry port along the pattern of Dubai Free Ports.
Within the BTZ there must be designated hubs that feed into the smugglers’ routes into Afghanistan. These hubs must be developed like Export Processing Zones where intending entrepreneurs have ready infrastructure to move into by turning a key and an electric switch. The BTZ must source not only Afghan transit goods but Central Independent States’ (CIS) exports and imports as well. Instead of using Karachi and Qasim Ports, this transit trade must exclusively use the ports of Gwadar and Pasni. This will help develop Balochistan also.
An unofficial BTZ supports the illegal contraband smuggling regime for the benefit of locals on both sides of the Durand Line. What is needed is to regulate smuggling into a legal system that eliminates graft and illegal gratification going presently into the pockets of corrupt customs and border guards.
Some 25 percent to 35 percent of the US$2.06 billion value documented Afghan transit trade via Pakistan ends up as profit for the smuggling mafia on the border. Afghanistan must import all its non-Pakistan origin imports transiting via Pakistan by buying it from the BTZ. The service charges and related employment opportunities will transform the lives of the border people.
The focal point must be to make Pakistan’s Fata the hub of all logistics of Afghanistan and Central Asia via Pakistan, bringing with it the Afghan border contraband mafia into Pakistan’s tax system. All goods should only be bought by Afghan traders from companies that are registered in the BTZ area. This measure will eliminate re-smuggling of the goods imported under the ATTA back to Pakistan. A tax-free product may be exported to other parts of the world by encouraging investment inside the BTZ in Pakistan; this reduces the cost of the product because of cheap labour and duty free imports and exports and also provides job opportunities for locals.
While improvement is required, almost 60 percent of the communications are already in place and operational. Infrastructure is one of the key elements for the success of the proposed BTZ concept. The US can assist in the proposed BTZ by investing not more than US$10 billion for improving existing roads. Security is another key element that will have to be the principal responsibility of the Pakistani state. The draconian laws of the Frontier Crimes Regulation (FCR) will have to be abolished and Fata will have to be established as a province with full provincial status.
Both Pakistan and Afghanistan constitute the strategic heartland of world politics; the US has major strategic stakes in the region. The US can gain major economic as well as strategic advantages from trade with India, China and the CIS but only if Afghanistan and Pakistan are stable. The border areas of Pakistan and Afghanistan are presently a strategic calamity for the US, but with a relatively small investment this can become a great strategic opportunity.
The Peoples Republic of China (PRC) visualises Pakistan as one of the two main strategic transit zones (the other is already functioning through Myanmar). Pakistan is vital for the Sinkiang Trade Zone as well as all strategic mineral imports to China from Afghanistan (Ainak Copper Mining Complex is already owned by China) as well as Balochistan, specifically the Saindak Copper Complex, and possibly Reko Diq. It may be possible to have a cross exchange of goods between the East and the West using the BTZ as a hub that will benefit Afghanistan as well as the CIS countries on one hand and China on the other.
With their livelihood guaranteed, the tribals will have a vested interest in protecting the means of their income by keeping peace on both sides of the Durand Line. Special security company licenses must only be sanctioned for Fata business concerns. With factories and shopping centres coming up, schools, colleges and hospitals, will naturally follow. The aim must be to eliminate the prevalent economic deprivation that breeds anarchy. With a vested interest in keeping peace in Afghanistan, the West must make a joint effort with Pakistan to club together economic initiatives with political and military ones. Instead of spending billions of dollars fighting a war without end, why not spend a fraction of that creating jobs and reinvigorating the economy?
Far more importantly, the BTZ will act as a base for development in Afghanistan and transform a population that historically comprises predators who live off goods and people transiting through their country into a viable vibrant country with an economy not perennially dependant on others.
It doesn’t take a genius to figure out that economic initiatives must be given preference if peace is to be restored on both sides of the border. Of the more than three million Pathan construction workers whose sweat and blood went into the concrete of infrastructure projects in the Middle East in the 1970s and during part of the 80s, more than 40 percent came from Fata and adjacent borders areas. A fertile recruiting ground for the Mujahideen, once the Middle East spigot of foreign remittances was turned off and the Afghan War started, this area became a logistics launch pad for operations in support of Mujahideen operations across the border.
Heavily weighted in favour of Afghanistan – to our detriment – the recently signed Afghan Transit Trade Agreement (ATTA) is a ridiculous document which needs phasing out and then eventually stopped. The only exception to transit trade must be the Afghan government’s official imports of essentials; they must pay adequate transit fees to cater for the wear and tear of our roads and railways.
Promised setting up by the US as far back as 2006, the proposed “Reconstruction Opportunity Zones” (ROZs) is an attempt to correct the economic imbalance but is really just a patchwork solution that cannot function practically on the ground. The ROZ concept is interlinked with the US economy – because of opposition from vested lobbies the legislation has already failed twice in the US Congress. In the proposed Border Trade Zone (BTZ) concept, US (and international) donor aid is only required for the development of roads and communications. The BTZ is thus Pakistan-centric rather than taking away something from the US economy. If the proposed ROZs continue to remain inactive indefinitely what options are we left with for a long-term solution to alleviate the poverty of the people of Fata?
A contiguous BTZ must be the economic force-multiplier for transforming the lives of the people of the tribal areas. Instead of earmarking small areas as ROZs, all of Fata and other border districts adjoining Pakistan and Afghanistan should be designated as a BTZ, a free inland dry port along the pattern of Dubai Free Ports.
Within the BTZ there must be designated hubs that feed into the smugglers’ routes into Afghanistan. These hubs must be developed like Export Processing Zones where intending entrepreneurs have ready infrastructure to move into by turning a key and an electric switch. The BTZ must source not only Afghan transit goods but Central Independent States’ (CIS) exports and imports as well. Instead of using Karachi and Qasim Ports, this transit trade must exclusively use the ports of Gwadar and Pasni. This will help develop Balochistan also.
An unofficial BTZ supports the illegal contraband smuggling regime for the benefit of locals on both sides of the Durand Line. What is needed is to regulate smuggling into a legal system that eliminates graft and illegal gratification going presently into the pockets of corrupt customs and border guards.
Some 25 percent to 35 percent of the US$2.06 billion value documented Afghan transit trade via Pakistan ends up as profit for the smuggling mafia on the border. Afghanistan must import all its non-Pakistan origin imports transiting via Pakistan by buying it from the BTZ. The service charges and related employment opportunities will transform the lives of the border people.
The focal point must be to make Pakistan’s Fata the hub of all logistics of Afghanistan and Central Asia via Pakistan, bringing with it the Afghan border contraband mafia into Pakistan’s tax system. All goods should only be bought by Afghan traders from companies that are registered in the BTZ area. This measure will eliminate re-smuggling of the goods imported under the ATTA back to Pakistan. A tax-free product may be exported to other parts of the world by encouraging investment inside the BTZ in Pakistan; this reduces the cost of the product because of cheap labour and duty free imports and exports and also provides job opportunities for locals.
While improvement is required, almost 60 percent of the communications are already in place and operational. Infrastructure is one of the key elements for the success of the proposed BTZ concept. The US can assist in the proposed BTZ by investing not more than US$10 billion for improving existing roads. Security is another key element that will have to be the principal responsibility of the Pakistani state. The draconian laws of the Frontier Crimes Regulation (FCR) will have to be abolished and Fata will have to be established as a province with full provincial status.
Both Pakistan and Afghanistan constitute the strategic heartland of world politics; the US has major strategic stakes in the region. The US can gain major economic as well as strategic advantages from trade with India, China and the CIS but only if Afghanistan and Pakistan are stable. The border areas of Pakistan and Afghanistan are presently a strategic calamity for the US, but with a relatively small investment this can become a great strategic opportunity.
The Peoples Republic of China (PRC) visualises Pakistan as one of the two main strategic transit zones (the other is already functioning through Myanmar). Pakistan is vital for the Sinkiang Trade Zone as well as all strategic mineral imports to China from Afghanistan (Ainak Copper Mining Complex is already owned by China) as well as Balochistan, specifically the Saindak Copper Complex, and possibly Reko Diq. It may be possible to have a cross exchange of goods between the East and the West using the BTZ as a hub that will benefit Afghanistan as well as the CIS countries on one hand and China on the other.
With their livelihood guaranteed, the tribals will have a vested interest in protecting the means of their income by keeping peace on both sides of the Durand Line. Special security company licenses must only be sanctioned for Fata business concerns. With factories and shopping centres coming up, schools, colleges and hospitals, will naturally follow. The aim must be to eliminate the prevalent economic deprivation that breeds anarchy. With a vested interest in keeping peace in Afghanistan, the West must make a joint effort with Pakistan to club together economic initiatives with political and military ones. Instead of spending billions of dollars fighting a war without end, why not spend a fraction of that creating jobs and reinvigorating the economy?
Far more importantly, the BTZ will act as a base for development in Afghanistan and transform a population that historically comprises predators who live off goods and people transiting through their country into a viable vibrant country with an economy not perennially dependant on others.
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