SYNOPSIS 1. 2.

Title: Author: Pakistan Afghanistan Transit Trade Transit Transport Issues Sp 2011 / PhD EM / 001 Mohammad Imran

3. Background of Problem. Owing to geographic and other related attributes, landlocked developing countries are confronted with a range of special constraints that inhibit their full participation in the globalization process. Even within transit countries, the pace of development in areas remote from the coast has been slower as the distance from the sea increases. For the landlocked countries, problems of distance are substantially compounded by the need to cross international borders and by the inability to regulate the through transport process. As a result, the delivered costs of imports are higher, exports less competitive and attraction for foreign direct investment reduced. 4. Hypothesis. The study results will highligh the fact that a corridor approach is needed in identifying and dealing with non-physical bottlenecks. Along a transit corridor, the development of infrastructure is subject to competing priorities at the national level. Pakistan being a transit country has to balance the needs of Afghanistan and its own local infrastructure development goals in allocating funds for a particular transport corridor. National trade and transport facilitation committees can serve as forums for bringing different stakeholders together. A methodolgy for balancing cost and time matrix will result in evoloving the correct approach towards better mangement of the issues involoved. 5. Development of Paper a. b. c. d. e. Intorduction. Transport issues in Afghanistan and Pakistan. Development of model to resolve the grey areas. Summary of findings. Recommendations for action plan and transit cooperation.

Pakistan Afghanistan Transit Trade Transit Transport Issues

Introduction 1. Economic development in the South / Central Asian regions and emerging opportunities for interregional trade are stimulating new directions of trade which are creating a demand for landlocked countries to become land-linking countries and provide important transit services to their transit neighbors. In this regard, both landlocked and neighboring transit countries can benefit from actions taken to increase the efficiency of transit transport. 2. Owing to geographic and other related attributes, Afghanistan is confronted with a range of special constraints which inhibits its full participation in the globalization process. Afghanistan being a landlocked country is disadvantaged by its lack of territorial access to sea as well as distance from it. Pakistan in spite of being a transit country for Afghanistan, the pace of development in areas remote from the coast has been slower as the distance from the sea increases. Problems of distance for Afghanistan are substantially compounded by the need to cross international borders and by the inability to regulate the through transport process. Resultantly, the delivered costs of imports are higher, exports less competitive and attraction for foreign direct investment reduced. 3. Due to lack of territorial access to seaports and the prohibitive cost of airfreight, Afghanistan has to rely on transportation of goods by land through one or more neighboring countries. Efficient availability of transit transport is therefore crucial for Afghanistan to offset the additional costs incurred which make imports more expensive and render exports less competitive. Overview of Afghan Economy 4. With an official per capita gross domestic product (GDP) of only US $ 207 and 70 percent of its population living in poverty (defined as an income of less than US $ 2 per day), Afghanistan is one of the worlds poorest countries. Its recent history has been dominated by struggles against the effects of 20 years of isolation and civil war; in fact, nominal per capita income has increased by less than 1 percent per year on average over the past 27 years. 5. Since 2001, Afghanistan has worked to establish civil stability and is committed to prudent macroeconomic management and market-oriented reforms that will improve the economic environment and economic performance. While growth has been strong since 2001, much of it has been fueled by donor-financed reconstruction and a boom in agriculture due to the end of a protracted drought. In the coming years Afghanistan must look to the private sector to fuel sustainable growth.