ECC allows export of another 14 items to Afghanistan against rupee

ISLAMABAD: In what appears to be another major development, the federal government on Friday allowed export of another 14 items to Afghanistan in rupees via land routes owing to the non-availability of tradable currency through banking channels.

The decision was taken at a meeting of the Economic Coordination Committee (ECC) of the cabinet, presided over by Finance Minister Shaukat Tarin, in the wake of a drastic decline in exports to Afghanistan.

The decision will also help the Taliban-led regime continue import of essential food items from Pakistan until the West recognised their government. The ECC said the decision was taken in view of the food crisis and prevailing situation in Afghanistan.

Since the Taliban takeover of Kabul, Pakistan has taken several measures, including a drastic reduction in duty on imports of vegetables and fruits from Afghanistan. In this connection, the ECC also exempted 45 per cent duty on import of chilghoza from Afghanistan.

Decision taken in view of food crisis, prevailing situation in war-torn country

The items allowed by the ECC for exports in local currency to Afghanistan are rice, fish and fish products, poultry, meat and products, sugar confectionery and bakery products, fruit, nuts and other edible parts of plants, oilcake and other solid residues, vegetable materials and vegetable waste, salt, cement, pharmaceuticals, matches, textile and textile articles, building stone and surgical instruments.

Currently, exports of fruits and vegetables, dairy products and meat are allowed in Pakistan currency.

Exports from Pakistan to Afghanistan have declined from $517.24 million in the first half year of FY21 to $328.25m during July-December of FY22.

In 2002, the then government of president Pervez Musharraf had decided to facilitate exporters and get more market for Pakistani products in Afghanistan. As a result, SRO-31 of 2002 was issued to allow exports against Pakistani rupee. Exports to Afghanistan stood at $386.67m in 2002-03.

As a result of that decision, Pakistan’s exports to Afghanistan rose to $2.5bn in 2014-15. Statistic of exports proceeds suggest that Afghanistan has emerged as the second-largest export destination for Pakistan after the United States. However, this facility was later discontinued on pressure from external and internal sides.

On Friday, the ECC allowed removal of 45pc regulatory duty on the import of chilghoza from Afghanistan to encourage legal import of unprocessed chilghoza for its processing in the country for export. The decision will also be instrumental in creation of jobs in the far-flung areas of border regions of Khyber Pakhtunkhwa and economically backward areas of Balochistan.

The ECC also enhanced the quota limit for export of samples to $25,000 or 0.1pc of actual export proceeds during the last financial year in US dollar per exporter per annum. In this regard, the relevant paras of the Export Policy Order 2020 were amended.

The ECC approved a proposal for engaging the services of third party to carry out monitoring and evaluation functions of the Kamyab Pakistan Programme (KPP).

Pakistan Poverty Alleviation Fund was engaged for monitoring and evaluation of KPP. However, PPAF has not been able to undertake this responsibility due to its legal status.

The ECC approved a compensation package of $11.6 million as a goodwill gesture for the affected Chinese nationals of Dasu hydropower project incident. The summary was submitted by the water resources ministry and the ECC approved the compensation package on the plea of considering the depth of Pakistan’s relationship with China.

The ECC, after a detailed deliberation, allowed the operations of SNGPL-based plants — Fatima Fertiliser (Sheikhupura plant) and Agritech — for further two months (February-March) at gas rate of Rs839 per MMBTU. The approval given on a summary moved by the industries and production ministry to meet the requirement of urea fertiliser for the remaining Rabi season.

The meeting approved a summary tabled by the information technology and telecommunication ministry for constitution of an advisory committee headed by the finance minister for the release of IMT/5G spectrum. The ministry also presented a draft policy directive of the Pakistan Telecommunication (Reorganisation) Act 1996 for renewal of cellular licence of Pakistan Mobile Communication Limited (PMCL/Jazz).

The ECC discussed and approved the Finance Division’s summary for resolving the issue of reversal of Foreign Commonwealth and Development Office’s (FCDO) unspent grant funds under amendment to MoU (memorandum of understanding) with a proposal to establish a new Credit Guarantee Company having 56pc shareholding of FCDO through Karandaaz (unspent funds) and 44pc shareholding of the government of Pakistan, with mandate of issuance of credit guarantees against financing in the SME (small & medium enterprises) sector.

Published in Dawn, January 22nd, 2022

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