Business
Pakistan discussing expansion of CPEC to Afghanistan
Pakistan has discussed Afghanistan joining the multibillion-dollar China-Pakistan Economic Corridor (CPEC) infrastructure project, the Pakistani ambassador to the country said on Monday.
“Regional connectivity is an important element of our discussion with Afghan leadership and our way forward for our economic interaction with Afghanistan,” said Mansoor Ahmad Khan, Pakistan’s envoy to Kabul, in an interview with Reuters.
“This important project – China Pakistan Economic Corridor … provides good opportunities, good potential for providing infrastructure and energy connectivity between Afghanistan and Pakistan … (and) also connecting South Asia to the Central Asian region.”
CPEC is a central part of the Belt and Road Initiative, under which Beijing has pledged over $60 billion for infrastructure projects in Pakistan, much of it in the form of loans.
Khan said that discussions had been held with the Islamic Emirate of Afghanistan (IEA) on this and other ways to develop the country’s economy.
“I think there has been deep interest in terms of developing economic connectivity of Afghanistan with Pakistan through CPEC and with other neighbouring countries including Iran, China, Central Asian countries.”
In recent days representatives from Pakistan, China and Russia have held meetings with IEA officials. Khan said security and economic development were the two main topics under discussion and that these countries expected to continue to consult as a group and meet with the IEA officials going forward.
Since the IEA took over Afghanistan on August 15, the country has been plunged into economic crisis as the nation’s international assistance has been largely cut off. Billions of dollars in central bank assets held abroad have also been frozen, which has put pressure on the banking system and prevented most transactions involving U.S. dollars, which Khan said was also hampering trade.
Khan said that Pakistan was also trying to work with the international community to ease international restrictions on the banking system and several executives from Pakistani financial institutions with a presence in Afghanistan had visited Kabul in recent days to see if the situation could be improved should international limits end.
The United States and other Western nations are reluctant to provide the IEA with funds until they provides assurances that they will uphold human rights, and in particular the rights of women.
Pakistan, which shares a border with Afghanistan and hosts millions of Afghan refugees from decades of conflict, is concerned about the economic crisis hitting its neighbour. Its prime minister, Imran Khan, and other officials have urged the international community not to isolate the IEA administration, saying aid should be provided to prevent economic collapse and a wave of refugees.
Pakistan has had deep ties with the IEA and has been accused of supporting the group as it battled the U.S.-backed government in Kabul for 20 years – charges denied by Islamabad.
However, Pakistan has not yet formally recognised the IEA-led administration and Khan, the Pakistani ambassador, told Reuters that “the issues of formal recognition will come later as Pakistan is part of the international community.”
Business
Ministry of commerce allocates land for oil refineries
Acting Minister of Industry and Commerce Nooruddin Azizi, said in a meeting with oil refinery officials that as soon as they are ready to invest, the ministry will establish an oil and gas industrial park.
In this meeting, refinery officials discussed problems regarding the Qashqari oil field and agreed that land should be provided. They said oil extracted from Qashqari needed to be refined through the standard process.
Azizi, while announcing the cooperation and support of the Islamic Emirate and especially the Ministry of Commerce and Industry for the private sector of the country, said: “A joint proposal should be arranged and submitted to this ministry for the land of the refineries, and also if the officials of the refineries are ready to invest in the area of Dara-e-Hairatan, an oil and gas industrial park will be created and the land will be placed under their control.”
Azizi emphasized the need to increase the capacity of existing refineries and the quality of oil, shared the decision of the High Economic Commission regarding the establishment of a large refinery.
Business
Pakistan’s Federal Secretary of Commerce invited to visit Kabul
Acting Minister of Industry and Commerce, Nooruddin Azizi, has invited Pakistan’s Federal Secretary of Commerce Mohammad Khurram Agha to visit Kabul.
In a virtual meeting, the two sides discussed the progress made in the last two and a half years in the country, the increase in trade between the two countries, solving problems and removing trade and transit barriers.
They also discussed the need for more facilities, establishing close relations between the governments and private sectors of the two countries and boosting regional cooperation, the Ministry of Industry and Commerce said in a statement Monday.
Business
Headline inflation in Afghanistan down to -10.2% in January: World Bank
In January 2024, headline inflation experienced a significant downturn, reaching -10.2 percent on a year-on-year basis, the World Bank said in a report.
This substantial drop was largely due to a sharp decline in prices across both food and non-food categories, the report said.
Moreover, core inflation, which strips out the typically volatile food and energy sectors, also fell into negative territory, posting a rate of -6.5 percent on year-on-year basis.
“This ongoing core deflation reflects a troubling inability of both private and public sectors to stimulate sufficient demand. While this period of falling prices may offer temporary financial relief to the most vulnerable households by reducing the cost of living, it can also harm the broader macroeconomy,” the World Bank said.
According to the bank, Afghanistan’s exports contracted by 5 percent on year-on-year basis to $140.5 million in January 2024, down from $148.1 million the previous January.
Food exports to India jumped by 22 percent, compared to an 18 percent decline in Pakistan. Pakistan and India continued to be the top export destinations, claiming 45 percent and 34 percent of the total exports in January 2024, respectively.
The 2023 growth trend in imports extended into January 2024, hitting $830 million, up 37 percent from $600 million in January 2023.
According to the report, in 2023, the afghani (AFN) saw a significant 27 percent appreciation against the US dollar, buoyed by the influx of around $1.8 billion in UN cash shipments and an estimated $2 billion in remittances.
Revenues have been below the Islamic Emirate of Afghanistan’s (IEA) target during the first eleven months of FY2024, with border taxes underperforming despite a surge in imports.
Over the eleven-month span of FY2024, from March 22, 2023, to February 21, 2024, Afghanistan’s revenue collection reached AFN 189 billion, narrowly missing the target by 2 percent but marking a 5.6 percent increase from the previous fiscal year, the report said.
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