Asian.Century
ELITE MEMBER
- Joined
- Nov 1, 2010
- Messages
- 10,754
- Reaction score
- -2
- Country
- Location
First time shortest route Gwadar Deep Sea Port Opens for Afghanistan Transit Trade | Afghani Goods & Services Sea Transport Route | Big Boost to Afghanistan Economy
Pakistan begins transit trade to Afghanistan via Gwadar port for First Time | Afghanistan Economy uplift boost
Pakistan’s commerce ministry operationalised the Gwadar Port for Afghan transit trade on Friday, marking a first in sea trade between the two countries.
The trade business has commenced under the Afghanistan-Pakistan Transit Trade Agreement-2010 (APTTA), authorities at the ministry informed.
In a series of tweets, Advisor to Prime Minister on Commerce and Investment Abdul Razzak Dawood shared that a ship carrying 16,000 metric tonnes of urea and fertiliser for Afghanistan had arrived in Gwadar, beginning a new chapter of trade via sea route from the Gwadar Port to Afghanistan.
The adviser further added that it was for the first time that the fertiliser will be locally packed. He claimed that directives had also been issued to offer jobs and livelihoods to local labourers only.
The labourers are were said to engage in the packing of fertilisers, loading and offloading of the items in trucks.
Apart from fertilisers, Afghanistan will be granted permission for the transit trade of sugar and wheat from Gwadar, while trucks carrying fully sealed consignments will only be allowed to go to the neighboring country.
While this maybe a first in sea trade for the two countries, both Pakistan and Afghanistan have been engaged in continued trade transit through land routes as global trade activities witnessed a lull amid the pandemic.
Besides the movement of cargo, the two countries have also seen active repatriation of their citizens from the shared borders at Chaman and Torkham.
For the first time, Pakistan has begun transit trade to Afghanistan via sea route using the Gwadar Port, the commerce ministry informed on Friday.
“The cargo ship SIBULK TRADITION has berthed at Gwadar, carrying 16000 tonnes of urea for Transit to Afghanistan. This is a first and marks the beginning of a new era in Pakistan's trade by sea," informed Advisor to Prime Minister on Commerce and Investment Abdul Razak Dawood in a series of tweets.
The SAPM added that for the first time, fertilizer bagging will be done locally instead of foreign ports. “Urea will be bagged and shipped on trucks to Afghanistan at Gwadar, which will generate employment for the locals."
“Instructions have already been passed to allocate all labour jobs to local population," he added.
Analysis
Amidst the daily grind of grim news relating to Covid-19 infections and deaths has come one welcome development, showing that life goes on.
The news relates to the federal government’s decision to open the Gwadar Port for Afghan Transit Trade. This is a very positive development for several reasons. To begin with, it will enhance capacity utilization of the port. However, the accrual of full benefits of this decision will need a number of allied measures to develop Gwadar’s comparative advantage vis-a-vis Karachi.
There are two routes for Afghan transit goods: Karachi-Quetta-Chaman-Kandahar and Karachi-Peshawar-Torkham-Jalalabad. Relatively, Gwadar can be more viable for the former destination.
The distance from Karachi to Quetta and from Gwadar to Quetta is 690 kms and 915 kms, respectively. In the event, transporters would be reluctant to use a route that is longer by 225 km. Additionally, the Gwadar-Quetta route passes through somewhat desolate terrain and offers few facilities for rest and meals compared to the Karachi-Quetta route. Security will also be an overriding concern.
Gwadar can overcome the above relative handicaps and enhance its economic viability significantly if a direct route is created between Gwadar and the city of Sangin in the southern Helmand province of Afghanistan. The 1,800 kms route is proposed to run south to north from Gwadar to Nokundi in Chagai district and onward to Sangin. The route will pass through Turbat and Panjgur and curve around the Hamun-e-Mashkel seasonal lake.
Sangin, across the Pakistan-Afghanistan border, is a junction town on the highway that connects to Kandahar 150 kms to the east, to Herat 500 kms north-west via Farah, and to Mazar-e-Sharif another 750 kms to the north. The highway network is recently built and reported to be of excellent quality. The Gwadar-Sangin section will open a third route for Afghan transit trade and lead to the development of Sangin as a major commercial centre to the benefit of southern and south-western Afghanistan.
The benefits to Balochistan and Pakistan will also be manifold. Expanded economic activity in southern Afghanistan will benefit the population of north-western Balochistan via greater trade opportunities and also generate opportunities for the development of Turbat and Panjgur. Gwadar will offer a shorter and faster route from the Saindak and Rikodik copper mines; thereby, further enhancing capacity utilization of Gwadar port.
A major benefit will be to curb the smuggling that Afghan transit trade has spawned, to the immense detriment of Pakistan’s manufacturing sector. Either some of the goods are off-loaded before reaching Afghanistan or they are recycled back to Pakistan. The Gwadar-Sangin route will be at a distance from the markets of Karachi, Lahore, Islamabad and Peshawar and the higher cost of transporting the off-loaded goods will rein in some of the economic incentive to smuggle.
The benefits of the Gwadar-Sangin route will be further enhanced if a railway line is laid along the track. Admittedly, railways are highly capital-cost intensive and the volume of traffic may not justify the monetary rates of return for the particular section. That, however, would be the conclusion of a narrow financial cost-benefit analysis. A broader socio-economic feasibility study is likely to produce a different result.
Relative to road transport, the railway will reduce the time cost of transporting goods to and from Gwadar and Sangin and from the Saindak and Rikodik mines. And railways use one-third less fuel per kilometer of tonnage compared to road transport; thereby, saving foreign exchange.
More specifically, a railway will be instrumental in containing smuggling. A truck can be half emptied while the driver and staff make a shortstop for tea or a meal. A train does not make unscheduled stops; and if it does, it can be monitored via satellite. Flow back of goods to markets in Pakistan will be uneconomical on account of the cost imposed by distance. The net beneficiaries will be Pakistan’s industries.
The security and political benefits need to be taken into account as well. The expansion of economic activity across western Balochistan and across southern Afghanistan will create jobs and raise incomes in both countries, reducing deprivation and disparities. After all, bombarding the area with jobs instead of with drones and gunfire is a more secure method of curbing insurgencies.
The writer was economic adviser to the chief minister Balochistan and also has experience of working in Afghanistan.
Pakistan begins transit trade to Afghanistan via Gwadar port for First Time | Afghanistan Economy uplift boost
Pakistan’s commerce ministry operationalised the Gwadar Port for Afghan transit trade on Friday, marking a first in sea trade between the two countries.
The trade business has commenced under the Afghanistan-Pakistan Transit Trade Agreement-2010 (APTTA), authorities at the ministry informed.
In a series of tweets, Advisor to Prime Minister on Commerce and Investment Abdul Razzak Dawood shared that a ship carrying 16,000 metric tonnes of urea and fertiliser for Afghanistan had arrived in Gwadar, beginning a new chapter of trade via sea route from the Gwadar Port to Afghanistan.
The adviser further added that it was for the first time that the fertiliser will be locally packed. He claimed that directives had also been issued to offer jobs and livelihoods to local labourers only.
The labourers are were said to engage in the packing of fertilisers, loading and offloading of the items in trucks.
Apart from fertilisers, Afghanistan will be granted permission for the transit trade of sugar and wheat from Gwadar, while trucks carrying fully sealed consignments will only be allowed to go to the neighboring country.
While this maybe a first in sea trade for the two countries, both Pakistan and Afghanistan have been engaged in continued trade transit through land routes as global trade activities witnessed a lull amid the pandemic.
Besides the movement of cargo, the two countries have also seen active repatriation of their citizens from the shared borders at Chaman and Torkham.
For the first time, Pakistan has begun transit trade to Afghanistan via sea route using the Gwadar Port, the commerce ministry informed on Friday.
“The cargo ship SIBULK TRADITION has berthed at Gwadar, carrying 16000 tonnes of urea for Transit to Afghanistan. This is a first and marks the beginning of a new era in Pakistan's trade by sea," informed Advisor to Prime Minister on Commerce and Investment Abdul Razak Dawood in a series of tweets.
The SAPM added that for the first time, fertilizer bagging will be done locally instead of foreign ports. “Urea will be bagged and shipped on trucks to Afghanistan at Gwadar, which will generate employment for the locals."
“Instructions have already been passed to allocate all labour jobs to local population," he added.
Analysis
Amidst the daily grind of grim news relating to Covid-19 infections and deaths has come one welcome development, showing that life goes on.
The news relates to the federal government’s decision to open the Gwadar Port for Afghan Transit Trade. This is a very positive development for several reasons. To begin with, it will enhance capacity utilization of the port. However, the accrual of full benefits of this decision will need a number of allied measures to develop Gwadar’s comparative advantage vis-a-vis Karachi.
There are two routes for Afghan transit goods: Karachi-Quetta-Chaman-Kandahar and Karachi-Peshawar-Torkham-Jalalabad. Relatively, Gwadar can be more viable for the former destination.
The distance from Karachi to Quetta and from Gwadar to Quetta is 690 kms and 915 kms, respectively. In the event, transporters would be reluctant to use a route that is longer by 225 km. Additionally, the Gwadar-Quetta route passes through somewhat desolate terrain and offers few facilities for rest and meals compared to the Karachi-Quetta route. Security will also be an overriding concern.
Gwadar can overcome the above relative handicaps and enhance its economic viability significantly if a direct route is created between Gwadar and the city of Sangin in the southern Helmand province of Afghanistan. The 1,800 kms route is proposed to run south to north from Gwadar to Nokundi in Chagai district and onward to Sangin. The route will pass through Turbat and Panjgur and curve around the Hamun-e-Mashkel seasonal lake.
Sangin, across the Pakistan-Afghanistan border, is a junction town on the highway that connects to Kandahar 150 kms to the east, to Herat 500 kms north-west via Farah, and to Mazar-e-Sharif another 750 kms to the north. The highway network is recently built and reported to be of excellent quality. The Gwadar-Sangin section will open a third route for Afghan transit trade and lead to the development of Sangin as a major commercial centre to the benefit of southern and south-western Afghanistan.
The benefits to Balochistan and Pakistan will also be manifold. Expanded economic activity in southern Afghanistan will benefit the population of north-western Balochistan via greater trade opportunities and also generate opportunities for the development of Turbat and Panjgur. Gwadar will offer a shorter and faster route from the Saindak and Rikodik copper mines; thereby, further enhancing capacity utilization of Gwadar port.
A major benefit will be to curb the smuggling that Afghan transit trade has spawned, to the immense detriment of Pakistan’s manufacturing sector. Either some of the goods are off-loaded before reaching Afghanistan or they are recycled back to Pakistan. The Gwadar-Sangin route will be at a distance from the markets of Karachi, Lahore, Islamabad and Peshawar and the higher cost of transporting the off-loaded goods will rein in some of the economic incentive to smuggle.
The benefits of the Gwadar-Sangin route will be further enhanced if a railway line is laid along the track. Admittedly, railways are highly capital-cost intensive and the volume of traffic may not justify the monetary rates of return for the particular section. That, however, would be the conclusion of a narrow financial cost-benefit analysis. A broader socio-economic feasibility study is likely to produce a different result.
Relative to road transport, the railway will reduce the time cost of transporting goods to and from Gwadar and Sangin and from the Saindak and Rikodik mines. And railways use one-third less fuel per kilometer of tonnage compared to road transport; thereby, saving foreign exchange.
More specifically, a railway will be instrumental in containing smuggling. A truck can be half emptied while the driver and staff make a shortstop for tea or a meal. A train does not make unscheduled stops; and if it does, it can be monitored via satellite. Flow back of goods to markets in Pakistan will be uneconomical on account of the cost imposed by distance. The net beneficiaries will be Pakistan’s industries.
The security and political benefits need to be taken into account as well. The expansion of economic activity across western Balochistan and across southern Afghanistan will create jobs and raise incomes in both countries, reducing deprivation and disparities. After all, bombarding the area with jobs instead of with drones and gunfire is a more secure method of curbing insurgencies.
The writer was economic adviser to the chief minister Balochistan and also has experience of working in Afghanistan.
Last edited:
