Karachi, January 13, 2022 (PPI-OT):Zubair Motiwala; Chairman PAJCCI called upon Mr. Abdul Razzaq Dawood, Advisor to Prime Minister on Commerce and Investment for deliberating upon issues of business community of Pakistan and Afghanistan. Chairman PAJCCI shared the activities and initiatives of PAJCCI in raising the voice of business community of both sides, providing insights to both governments and bringing issues on the table with objective of beneficial and long-term resolution.
He shared the on-going obstacles in trade activities and their impact on long term trade and economic relationship with Afghanistan resulting in revenue loss, socio-economic effects on people living on borders, widening trade gap especially exports, loss of livelihood increasing hardships for people and unrest in border areas.
He apprised the Advisor on high impact issues like developing a formal mechanism for barter trade, facilitating trade in PKR, withdrawal of Cash on Counter facility, requirement of advance payments, reluctance of correspondence banks to accept third party payment in case of Afghanistan and the congestion at border resulting due to delayed checking and payment issues raised due to SBP’s change in policy.
He added that at present Afghanistan has no operational banking nor they have USD reserves, traders cannot bring more than PKR 10,000 while crossing borders hence advance and cash payments cannot be made, consignment values are way higher than allowable limit of cash carrying. In case payments to be made in USD, traders will eventually buy them in Pakistan hence impacting Pakistan’s foreign reserves and USD crunch in local market.
Business community understands the requirements of international laws with respect to FATF however international community is well aware of Afghan situation hence trading in PKR is the only way to continue trading, reducing humanitarian crisis and safeguarding Pakistan’s interest in the region. Zubair Motiwala suggested to set up bank counters at borders so payments can be made at the spot without delaying shipments and creating congestion.
He also appreciated the Government’s approval to carry out PKR trade for perishable items however requested to add meat, poultry and pharmaceuticals in the same category. He sought Advisor’s intervention in resolving the core issue of cash on counter facility withdrawal by State Bank of Pakistan. Afghanistan having financial crisis, lack of banking structure and seized foreign exchange cannot survive under such stern regime.
Trade between Pakistan and Afghanistan is governed by EIF and E-Form. Banks issue E-Form only after receiving advance payments. To issue EIF banks require documents including NLC weight slips (which are only possible when shipment has arrived at the border); thus, delaying shipments unnecessarily for one or two days. Currently banks are not issuing EIF for any kind of trade with Afghanistan.
He informed that most recently USA has agreed to release funds for Afghanistan and UN has also appealed to world community in this regard hence Pakistan can play its role by reforming and bringing measures which are beneficial for both sides and at the same time correspond to international community actions especially in view of ongoing humanitarian crises.
PAJCCI Afghan Chapter has already convinced their government to develop mechanism for barter trade and will support all related chambers working with PAJCCI to trade equally in Afghanistan. Both sides also need to work out long term policy to allow easy movement of trucks in each other’s countries while taking in to account the security and safety protocols.
PAJCCI has already suggested traders profile development and maintenance based on their performance history to support the Government of Pakistan. Advisor appreciated the insights and initiatives of PAJCCI and agreed to the suggestions of banking counters at border and updated that within a week momentum on this regard will be seen.
He also updated that trade in PKR is currently allowed in perishables and poultry has been added, further pharmaceuticals and rice are already in consideration and soon policy updates will be shared in this context.
However, he stated that SBP has issued notification in line with instructions from Ministry of Finance and PAJCCI may discuss the cash on counter facility. He assured that Government will take up these matters internally and where necessary with Afghan government.
He informed that announcement of certain steps will be made next week to facilitate trade and economic activity with Afghanistan. Zubair Motiwala thanked Mr. Abdul Razzaq Dawood for his time and interest in resolving the issues of business community and assured that PAJCCI will continue to contribute towards strengthening of national economy.
Honorable Adviser mentioned that Pakistan Government has shared list of 40 items with Afghanistan side on which response is still awaited. Motiwala discussed the same with Consul General Afghanistan and sought his facilitation in this matter on urgent basis.
For more information, contact:
Pakistan Afghanistan Joint Chamber of Commerce and Industry (PAJCCI)
Tel: +92-21-99218024-7
Fax: +92-21-99218028
Email: info@pajcci.com
Website: http://www.pajcci.com/