The Supreme Court was informed that the national kitty was being deprived of Rs5 to 6 billion per month due to undocumented economy at the Torkham border, Bara and the hawala/hundi market. A report submitted by Additional Advocate General of Khyber Pakhtunkhwa Omer Farouk Adam, a member of the four-man commission appointed by the Supreme Court on Aug 21 to check illegal border crossing into Pakistan from Torkham, claimed that the ready to use SIMs were bought through Torkham and used at Torkham once and then during a terrorist attack on the Army Public School in Peshawar on Dec 16 last year. It said stakeholders – both the government departments/officials and non-state actors who profit from the loopholes – continued to fight for status quo at Torkham border to the detriment of the people of Pakistan. Getting quantitative estimates of undocumented economic activity is notoriously difficult, but what ought to be readily acceptable to everyone is the large size of undocumented cross-border economic activity taking place along at least three of Pakistan’s four borders.According to an estimate produced a few years ago, the size of the undocumented trade at Torkham, and other crossing points in its vicinity, was $2.5bn per year.Today, those involved with drawing up that estimate say the figure could be larger than $4.5bn. Likewise with India, where an estimate drawn up by researchers at the Sustainable Development Policy Institute a few years ago put the size of the informal trade close to $1.7bn (the formal documented trade was $1.9bn).Today, that figure, according to the authors of that report, would be much larger due in part to a hike in GST and custom duties in the last budget on precisely those items that are the mainstay of this informal trade. A very similar picture exists on informal trade with Iran. Clearly, burgeoning regional trade flows are pushing very hard against the myriad obstacles in their path. These obstacles include infrastructure deficiencies, a policy framework that is stacked against freer trade with our neighbouring countries, and security-related considerations.
In short, Pakistan’s neglect of its overland trade potential with its neighbours over the years has pushed the burgeoning trade energies into the margins. In this situation, trade continues but without the accompanying benefits to the state of using business relations to build better ties and to reap a revenue windfall in the process.
This is a rather sad reflection on the harm that short-sighted thinking can do. Viewing our neighbours through a lens that is dominated by geopolitical considerations is giving us the worst of both worlds.It is depriving us of the benefits that closer economic ties can bring to the country, while pushing trade energies into a domain where racketeers thrive and the state is little more than a hapless spectator to a chaotic and uncontrolled expansion in undocumented cross-border trade.
pk.shafaqna.com
