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“We get 10 per cent of the benefits from the contract, and Pakistan gets 90 percent of
the benefits,” he said.
Afghanistan is the largest buyer of Pakistan goods ranging from food items to
construction materials, worth $4 billion a year, Shams added.
Islamabad says Afghanistan is the country’s third biggest market, although it put trade at
$1.45 billion for the 11 months from July 2009. The difference may be due to smuggling.
Uneasy partners
The trade deal should provide a significant new outlet for Afghan goods as the Kabul
government and its foreign partners struggle to rebuild an economy crippled by decades
of war.
India is a relatively short truck journey away and in 2003 signed a preferential trade
agreement with Kabul, one of only two such bilateral deals Delhi has agreed.
A strengthening insurgency and weak infrastructure have meant Afghans are still heavily
dependent on foreign aid.
Unemployment runs at around 40 percent, and economists and businessmen say lack of
jobs makes it easier for militants to recruit fighters to their ranks, so creating businesses
and finding markets for Afghan goods is an urgent concern.
But landlocked Afghanistan is dependent on its neighbours for access to markets, and its
small manufacturing base means it also relies on them for imports.
This has created widespread resentment of the grip Pakistan in particular has on the
country’s economy. This comes on top of the common perception that Islamabad has
contributed to decades of violence and insecurity by supporting insurgent groups.
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