Currency Smuggling to Afghanistan: State drive to bust cartels is as dangerous as minesweeping

DND Thought CenterCurrency Smuggling to Afghanistan: State drive to bust cartels is as dangerous...

By Agha Iqrar Haroon

It was mid-July of the year 2022 when money exchangers in the country raised alarms that US$ smuggling to Afghanistan had broken all previous records. Since border management is done by paramilitary forces, the issue of cross-border smuggling has always been a sensitive one to be discussed at the national level.

   

By the end of the year 2022, rice and wheat associations started raising the issue that there was no Pakistan-Afghanistan border virtually exist and meat, sugar, rice, wheat, and vegetables were going to Afghanistan unchecked. In December 2022, Chairman of Forex Association Malik Bostan could not stop himself and he started holding talks with the media.

On December 27, 2022, Malik Bostan addressed a press conference and claimed businesses in Pakistan would not survive if smuggling was not stopped and stated that the situation had eroded Pakistan’s foreign exchange reserves and the exchange rate had been destroyed by smuggling and fake imports of dollars and government (PDM) was not taking any actions against smugglers.

Whenever Pakistan tries to control heavy smuggling, the Taliban’s border security creates a war-like situation at border checkposts and even attacks Pakistani forces. It looks like smuggling is covered by the Afghan interim government with a commitment to let Pakistan dry with edibles

He gave data that one US dollar was available for Rs155 Pakistan’s rupees in August 2021 when the Taliban took over Afghanistan and Pakistan’s foreign reserves were at $22 billion but exceptionally high currency smuggling had eroded Pakistan’s reserves. Another factor that caused havoc with Pakistan’s forex market is state permission that anybody going to Afghanistan can take $1,000 per day and around 15,000 persons cross the Pak-Afghan border every day therefore legally 15 million dollars are used to cross each day from Pakistan to Afghanistan.

The previous PDM government despite having knowledge of everything kept shy to control the heavy smuggling of currency and edibles to Afghanistan, resulting in constant pilferage of currency as well as sugar, wheat, edible oil, rice, and meat products

The most interesting part of the smuggling saga is the change of laws since the Taliban took over Afghanistan. The interim Taliban government changed the rules of the game and decided to trade in the US dollar instead of in Pak currency although Pakistan-Afghanistan trade had been going through Pak currency for the last 44 years. Taliban ordered that keeping more than 0.5m Pakistani rupee would be prohibited in Kabul and any person found with such amount of Pak currency would be tried under the anti-money laundering laws.

Sources in Karachi port claim that in the first quarter of the year 2022, around 15,000 containers left Pakistan without paying import duties. The number of containers was much higher than the year 2021’s figure of 3,000 containers in the same quarter.

Since land-locked Afghanistan buys over 80 percent edible from Pakistan, the pressure on sugar, wheat, rice, oil, meat, and vegetables is enormous and directly hits Pakistan’s import bill because Pakistan buys several items from abroad like edible oil (and sometimes sugar and wheat) and half of the stock goes to Afghanistan.

Meanwhile, whenever Pakistan tries to control heavy smuggling, the Taliban’s border security creates a war-like situation at border checkposts and even attacks Pakistani forces. It looks like smuggling is covered by the Afghan interim government with a commitment to let Pakistan dry with edibles. Unfortunately, the previous PDM government despite having knowledge of everything kept shy to control the heavy smuggling of currency and edibles to Afghanistan, resulting in constant pilferage of currency as well as sugar, wheat, edible oil, rice, and meat products.

The constant price hike of edibles has sent a loud and clear message to everybody that Pakistan cannot survive while saving Afghan brothers with such conditions that have been accepted as normal in Pakistan. Since the interim government took over the charge, it is not shying from sharing realities with the public that were considered taboo to be discussed in the past. Additionally, the proactive role of Chief of Pakistan Army COAS Gen. Asim Munir to take the country out of the danger zone resulted in his meetings with businessmen and traders in Karachi and Lahore. Such meetings sent a loud and clear message to everybody that he is open to listening to harsh realities (as border smuggling is not possible without the help of paramilitary forces) and he wants to fix boat holes with whatever is available. COAS, as well as interim Prime Minister Kakar, understand that Pakistan cannot keep giving priority to Afghanistan at the cost of the survival of Pakistan therefore, the Interim government has initiated a large-scale crackdown against the smuggling of dollars, edibles, and necessary items and at the same time have decided to bust organized crimes and crackdown cartels involved in these activities.

It is a fact that collective wisdom is needed to smash the mafia’s control over the country’s economy, consequently, the interim government is deliberating with all stakeholders to identify government officials who are facilitators and patrons of cartels and mafias. I believe once the data is collected, a prolonged crackdown against them is now written on the wall.

Within the interim system, deliberations are underway for major policy reforms in the fields of supply chain, commodity management, and currency businesses to transform the entire structure to mitigate the mafia’s strong grip on economic activities.

Since smuggling cannot be controlled without robust monitoring systems at Land, Sea, and Airports therefore vigilant coordination is being upgraded so no illegal movement of goods/ currency will be permitted.

COAS Gen Asim Munir has already shown his resolve and commitment to go after the smuggling cartels and illegal smuggling activities to salvage the Pakistani economy. According to available information, COAS Gen Asim Munir expressed his views in his meetings with businessmen and traders that every Pakistan is a soldier of the country because soldiers do not mean only those who fight in weaponry wars rather whoever protects the motherland is a soldier and anybody who has knowledge/information about mafias must support efforts being made by the government and law enforcement agencies to go after the cartels, hoarders, smuggling gangs and those officials who facilitate these illegal activities must be a collective move.

I hope the Interim government will keep focusing on minesweeping because every path that leads to the prosperity of the country has been heavily mined by culprits working within the system and their financial interests are so huge that they would resist until their heads are not rolled down.

Whoever blinks his eyes first — will give his head

Let not the sun go down and the darkness come, until I cast down headlong the citadel of Priam in flames, and burn his gates with blazing fire, and tear to rags the shirt upon Hectors breast! May many of his men fall about him prone in the dust and bite the earth!

Homer

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