Khyber Pass Economic Corridor to pave way for improved Pak-Afghan trade

PESHAWAR -- A planned four-lane expressway from Peshawar to the border post of Torkham is expected to improve trade between Pakistan and Afghanistan, curbed by years of militancy and terrorism.

The Khyber Pass Economic Corridor (KPEC) Project, whose $482 million (Rs. 67.1 billion) cost the World Bank is mostly financing, is in its final stages of planning and will span 48km.

The project has a closing date of June 28, 2024, according to the World Bank website.

The expressway "will benefit traders in Pakistan, Afghanistan and the Central Asian republics", Adja Mansora, a senior private sector specialist at the World Bank, told business leaders of Khyber Pakhtunkhwa (KP) during her visit to the Sarhad Chamber of Commerce and Industry (SCCI) in Peshawar January 21.

The objective of KPEC is to expand economic activity between Pakistan and Afghanistan by improving regional connectivity and promoting private sector development, Mansora said.

Terrorism's impact on trade

The project has two components including construction of the four-lane expressway and development of the area through construction of economic zones, a commercial area, a truck terminal and a warehouse facility, she added.

The business community of Pakistan and Afghanistan is hailing the planned project in hopes that the dwindling trade between the two countries will gain momentum and that a new era of economic stability will dawn in the region, which has reeled from a decades-long wave of militancy and terrorism.

"The project will have a far-reaching impact on the economy of the region because it has the potential not only of improving trade relations between Pakistan and Afghanistan, but of reviving the historic trade link between Central Asia and South Asia," Faiz Ahmad Faizi, president of the SCCI, told Pakistan Forward.

The economy of western Pakistan comprising KP and the former Federally Administered Tribal Areas is dependent on trade with Afghanistan and Central Asia, he said, adding the road project will infuse new life in Pak-Afghan trade.

Annual trade between Pakistan and Afghanistan has decreased in the past few years, falling from $2.5 billion to less than $1 billion, Faizi said.

"To boost the Khyber Pakhtunkhwa economy, we have to improve trade links with Afghanistan and the Central Asian republics," Taimur Jhagra, KP finance minister, told Pakistan Forward.

'Far-reaching impact'

KP Chief Minister Mahmood Khan understands the importance of this trade link and has issued directives for round-the-clock operation of the Pak-Afghan border crossing at Torkham, said Taimur.

The planning stage of KPEC is almost complete and will be sent to the chief minister for final approval, Jhagra said.

"While we realise the geo-economic importance of KPEC, our utmost efforts are focused on early approval of this project because it will have far-reaching impact on Pak-Afghan trade besides expanding the commercial link to Dushanbe, Tajikistan, he added.

The project is vital to improving business and relations in the region, agreed Shahid Hussain, a Peshawar-based exporter of cement and sugar to Afghanistan.

"Such projects can change lifestyles by bringing progress and development in the region," he told Pakistan Forward. KPEC will not only improve Pakistani-Afghan relations but will stimulate business between the two countries, a benefit to both sides of the border, Shahid said.

Haji Zalmey, an Afghan businessman and president of a traders' union in Jalalabad, Afghanistan, shared Shahid's optimism.

"Improving trade links will definitely have a good government-to-government impact and improve people-to-people relations between Pakistan and Afghanistan," Zalmey told Pakistan Forward. He wholeheartedly welcomes the new project, expressing hope it would revive Pak-Afghan trade and improve communication between the two countries.

Given the trade potential, restoring the centuries-old trade link among Pakistan, Afghanistan and the Central Asian republics will be of benefit to everyone in the region, he added.