What is state failure? See my conceptualisation of state failure on the right flank below.

Thursday, September 27, 2007

The spillover of flour, tomatoes and basically anything edible

The MStFB Spillover Monitor Report Series No. 12
IPS News has a very interesting article on a spill-over effect of the fighting in southern and eastern Afghanistan. There is a general food shortage in the area, and whatever that is going there goes there from Pakistan, no surprise: from the tribal frontier areas. The Pakistani flour industry is happy to capitalise on this, as the latter couple of years were not very good for them. That is an industry behind which there is a class of 350 flourmill owners, and they wouldn't miss out on the opportunity that the current difference in the price of a kilogram of flour between Pakistan and Afghanistan offers. The same goes for those in the poultry business. And those trading in rice. And in tomatoes. Anything edible, you name it.
The result in Pakistan is a price hike of all these consumer goods, mostly in the northwestern areas. That means the price difference is melting somewhat, but of course it may not melt away completely. And the problem is that together with the price difference diminishing, the difference in the availability of food is also diminishing (the former a symptom of the latter).
Now, back whenever the diverse and rather fragmented company of armed Afghan men, forced under the Taliban's umbrella in careless analysis at times, was busy attacking World Food Programme convoys, for example along the southern part of the Afghan highway ring, some people were speculating that their main aim was causing resentment as much as possible, which would then work against ISAF indirectly. But what I'm citing above tells me that they are more likely in fact just protecting informal trade, or more exactly are working to make it profitable, one possibility being that they themselves profit from it, too (the other is that they are just robbing stuff opportunistically, especially given the incentive of the food shortage for doing that). Resentment against ISAF is the cream on the cake for them if they are interested in it at all (and not the cake itself). That view seems to be held by e.g. Rick Corsino (WFP-Afghanistan), too, who says here that "My own view is that the attackers are primarily thieves more than those with political motivations."
Getting back to the impact of all this, IPS' Ashfaq Yusufzai reports: " Even fruits, which used to be imported by Pakistan from Afghanistan till 1990, are now brought in clandestinely from Pakistan. "The price of grapes, pomegranates, oranges, mangoes, apples and bananas besides all kinds of vegetables has increased because of smuggling," said a vegetable dealer (in Pakistan - P.M.). "
Another good IPS piece discusses more generally the informal trade as such. The official volume of trade between Pakistan and Afghanistan is below two billion dollars, while it is estimated that informally it is rather around ten billion. Official trade figures reckon with the export of edibles as worth 397.393 million dollars, and that itself is of course an estimate reality exceeds. Part of all the informal trade has to do with the Afghan Transit Trade Agreement (ATTA), which exempts goods imported by Afghanistan via Pakistani ports from customs duties. That arrangement is supposed to protect Afghanistan's rights as a landlocked country in the UN system (originates from 1965), and its result is that it generates a lot of smuggling. Goods imported to Afghanistan the official way come out the informal way. That's adventurous (checkpoints and informal "duties" along the way) but profitable, apparently. Tolerating this gravitates a lot of money into officials' pockets both in Afghansitan and in Pakistan. And tolerating the scheme is also a way for Pakistan to subsidise Pashtun areas on both sides of the border. It provides an opportunity for the masses of Afghan refugees living in Pakistan, too, who have adopted more and more transnational lives as a result of the last couple of decades' historical twists.

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