Tag Archives: Trade

Pakistan and Afghanistan Work to “End the Blame Game” and Increase Trade Ties

The Afghan-Pakistan border. (Photo: EPA)

The Afghan-Pakistan border. (Photo: EPA)

Afghanistan, being a landlocked country, depends on its trading route with neighboring Pakistan to get its exports to world markets. However, these two countries have an unstable political relationship.

Due to increase in political instability between the two countries in the last couple of months, Pakistan’s top foreign policy adviser Sartaj Aziz paid a visit to Afghanistan in order to reduce the ongoing friction between the two countries.

The foreign affairs adviser to the prime minister visited the Afghan capital Kabul on September 4 for a regional economic conference and also held meetings with the president, foreign minister and national security adviser.

In his statement on state television about his meeting with Ghani, he said,  “The main thing that the both side agreed upon was to restore trust, end the blame game against each other and create a positive atmosphere.”

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The Real Problem for Intra-African Trade

Photo: BBC / AFP

Photo: BBC / AFP

This post is continuation of a previous article on regional integration in Africa.

Reducing tariffs is a great start for increasing trade within Africa, but important non-tariff barriers (NTBs) must also be reduced in order to boost trade both within and outside of the continent. In fact, the United Nations Economic Commission for Africa found the costs of NTBs in 2010 were higher than the costs of tariffs. The African Development Bank notes that, “while tariffs have progressively fallen, the key challenge to intra-African trade is non-tariff barriers that stifle the movement of goods, services and people across borders.”

What sort of non-tariff barriers exist in Africa? Infrastructure across the continent is poor, discouraging the movement of goods and people. Less than a quarter of roads are paved, and those are often filled with potholes. It’s not uncommon for airfare with a layover in Europe or Asia to be cheaper than direct intra-continental flights. Meanwhile, seaports are crumbling and rail connection is paltry.

“Thick borders” are also an issue, created by burdensome administrative procedures for clearing goods for import and export. Lines of trucks at the border lead to waits measured in days due to excessive bureaucratic red tape and burdensome administrative procedures. A report by Transparency International (TI) and TradeMark East Africa (TMEA) found that drivers at Rwanda-Tanzania customs stations spent an average of 72 hours obtaining customs clearance. World Bank economist Paul Brenton found that a truck serving supermarkets across a Southern Africa border may need to carry up to 1600 documents to comply with different countries’ requirements for permits, licenses, and other required paperwork.

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Can Regional Integration Help Africa Reach Its Economic Potential?

Headquarters of the South African Development Community in Gaborone, Botswana. (Photo: Wikimedia Commons)

Headquarters of the South African Development Community in Gaborone, Botswana. (Photo: Wikimedia Commons)

Much of the discussion at last year’s landmark U.S.-Africa Leaders Summit in Washington, DC, focused on transatlantic trade and investment between the U.S. and African countries – for example, the need to renew the African Growth and Opportunity Act, which aims to promote trade with the U.S. by removing tariffs on a number of African exports. Another theme that was prevalent throughout the summit, however, was the need to open up borders, reduce barriers, and increase trade between African nations.

It’s becoming quite common to talk about the rise of Africa and the potential return on investment in a continent often compared, demographically and economically, to countries like China and India. In fact, even developing sub-Saharan Africa is slightly richer than India on a per capita basis, and the continent as a whole has a larger GDP. The economic potential of Africa’s billion people, as both workers and consumers, is only beginning to be tapped.

These statistics are accurate and encouraging, but they can also be slightly misleading. Africa is not a single country, like China or India. It is 54 different countries with 54 different sets of borders and laws creating 54 fragmented, often tiny markets. Doing business in China or India means over a billion people as potential customers or employees. But there is no equivalent “African market.” Investing in Cameroon does not give you much access to Algeria or Zimbabwe, or any country in between. High tariffs, bureaucratic red tape at the borders, and poor infrastructure all make it hard for goods, capital, and workers to move freely through the continent.

Undeniable progress has been made in regards to tariffs, with the establishment of regional trade blocs such as the Southern African Development Community (SADC), Economic Community of West African States (ECOWAS), and the East African Community (EAC). Yet there is still much that needs to be done to unite the continent and also to integrate it with the rest of the world.

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Reports Show Weak Progress on Economic Reform in Pakistan

The World Economic Forum lists a weak judiciary as one of the issues holding back economic reform in Pakistan. (Photo: Pakistan Today)

The World Economic Forum lists a weakening judiciary as one of the issues holding back economic reform in Pakistan. (Photo: Pakistan Today)

In Pakistan, the process of economic reforms has been painfully slow – a fact underlined by stalled or slipping progress on several international indices. On the World Bank’s 2015 Doing Business, Pakistan fell from 107th out of 185 countries to 128th. The World Economic Forum’s Global Competitiveness Index brought Pakistan down to 129th in 2014-15 from 124th in 2012-13. And the Fraser’s Institute report kept Pakistan at 124th out of 167 countries — the same spot it earned in 2013.

The World Economic Forum published its Global Competitiveness report this week, showing similarly weak progress. Three large South Asia Countries were ranked – India at 55th, Bangladesh at 107th and Pakistan at 126th. As compared to the last report, India jumped 16 places, Bangladesh by 5 and Pakistan slipped by one.

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Could Armenia Be One of the Biggest Beneficiaries of the Iran Nuclear Deal?

Iran-Armenia border crossing. (Photo: Press TV)

Iran-Armenia border crossing. (Photo: Press TV)

By Ann Mette Sander Nielsen

The much-analyzed nuclear deal with Iran to lift international sanctions is, if approved, expected to have a substantial impact on the Iranian economy by enabling the country to increase its oil and gas exports and by creating new possibilities for foreign direct investment (FDI). Many observers hope that the deal will allow for increased interaction with multinational companies and could help build more constructive relations between Iran and the international community.

However, one aspect of the story has not been widely covered: how the nuclear deal could have a massive economic and social impact on the region at large, including Central Asia and South Caucasus. One country which could make considerable gains from the nuclear deal is Armenia, which shares a border with Iran.

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The Trillion-Dollar Question: Financing the Sustainable Development Goals


After years of consultation, discussion, and debate, the sustainable development goals (SDGs) that will guide development efforts for the foreseeable future are close to becoming a reality — meaning a global commitment to end poverty in all its forms everywhere and eliminating extreme poverty entirely by 2030. But one crucial question remains: how to pay for it all?

The Financing for Development (FfD) conference met in Addis Ababa, Ethiopia earlier this month to try to reach an agreement on the right mix of development aid, taxes, loans, trade, and private investment to pay for the ambitious agenda set out in the SDGs, building on the failures and successes of the previous Monterrey Consensus and Doha Declaration.

Following the FfD conference, the Center for International Private Enterprise’s (CIPE) convened a panel of experts to reflect on the new SDG financing framework and outline important steps leading up to the summit in September where 193 heads of state will converge to ratify the goals.

Hosted by CIPE Executive Director John D. Sullivan, the panel featured Trevor Davies of KPMG, Christopher Jurgens of the United States Agency for International Development (USAID), Louise Kantrow of the International Chamber of Commerce (ICC), Kamran M. Khan of Millennium Challenge Corporation (MCC), and Sarah Thorn of Walmart.

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Good Governance in Pakistan is Crucial for Greater Trade

Despite new export opportunities, Pakistan's textile factories are shutting down due to energy shortages. (Photo: Dawn)

Despite new export opportunities, Pakistan’s textile factories are shutting down due to energy shortages. (Photo: Dawn)

Huma Sattar was a CIPE-Atlas Corps Think Tank LINKS Fellow at the Heritage Foundation

Successive governments in Pakistan have shown profound interest in increasing trade with the rest of the world by pursuing various trade and investment agreements. From a significant Free Trade Agreement (FTA) with China signed in 2006 which will soon enter its second phase, to a trade and transit agreement with Afghanistan, as well as several free or preferential trade agreements with Malaysia, Indonesia, and Sri Lanka, Pakistan is also negotiating possibilities of trade agreements and cooperation with Turkey, Thailand, and the ASEAN region. The country is also part of the regional trade agreement South Asian Free Trade Area (SAFTA) together with India, Bangladesh, Afghanistan, Nepal, and other South Asian countries. Though the agreement is not yet fully operational, it is a source of much discourse and tremendous unrealized potential for all countries involved.

Pakistan’s trade has increased overall, going from $24 billion in 2003 to $72 billion in 2014, and opening Pakistan’s markets may be a positive indicator of some improvements in Pakistan’s economy.  From importing primarily oil and fuel products, Pakistan is now also importing machinery, electrical and electronic equipment, and industrial inputs. The industrial sector, particularly large scale manufacturing, witnessed a growth of about five percent in fiscal year 2014.

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