Business
A border that weakens state, how Pakistan can fix it | The Express Tribune
Move is part of plan to secure Durand Line which remains bone of contention. PHOTO: INP
ISLAMABAD:
In the unforgiving geography of South and Central Asia, Pakistan’s western frontier with Afghanistan has long been a paradox — a line of insecurity that could have been a corridor of opportunity.
For decades, the 2,600-kilometre Durand Line has carried the weight of unresolved politics, cross-border militancy, and economic leakage. Yet today, amid regional realignments and shifting trade routes, this fragile border demands not only fortification but transformation — from a porous passage into a gateway of sovereignty.
Pakistan’s western border has historically been more open than managed — a legacy of tribal linkages, historical mistrust, and administrative neglect. This looseness has exacted a heavy toll. The unrestricted movement of people and goods has drained Pakistan’s fiscal capacity, undermined law enforcement, and allowed illicit trade in currency, fuel, narcotics, and commodities to flourish.
Estimates suggest that informal trade across the Pakistan-Afghanistan frontier exceeds $2.5 billion annually, while formal bilateral trade has sharply declined from nearly $2.7 billion in 2012 to less than $1.2 billion today. The fall has coincided with a surge in smuggling of food commodities including staples such as wheat flour, Basmati rice, sugar, vegetables, ghee, fertiliser, and petroleum products, which not only distorts domestic prices, often leading to food inflation, but also deprives the exchequer of billions in duties, when goods are smuggled into Pakistan.
Every truckload of untaxed goods crossing the frontier is a silent strike against Pakistan’s industries and economic sovereignty. It widens the fiscal deficit, feeds inflation, and erodes confidence in the state’s ability to regulate its borders.
From buffer zone to economic corridor
The Taliban-led Afghan government’s recent statements, particularly those of Deputy Prime Minister Mullah Abdul Ghani Baradar, highlight Kabul’s willingness to expand trade ties beyond Pakistan — with China, India, Iran, and the Central Asian Republics. This shift, combined with the development of Afghanistan’s rail connectivity with China via Uzbekistan, threatens to marginalise Pakistan’s traditional role as Afghanistan’s main transit route to the sea.
In 2023-24, Afghanistan’s total trade volume through Pakistan under the Afghan Transit Trade Agreement (ATTA) fell to $1.8 billion, a steep decline from $4 billion in earlier years. Pakistan’s exports to Afghanistan — primarily pharmaceuticals, cement, food items, and textiles – have also dropped by nearly 60% in a decade. India, Iran, and Central Asian states have filled the vacuum through alternative corridors.
Yet, this loss is reversible, if Pakistan redefines its western border not as a line of division but as an axis of connectivity. With effective border management, joint economic zones, and customs integration, the Durand Line can become a regulated trade corridor that boosts formal commerce, raises revenue, and stabilises the frontier region.
Security through economy, not exclusion
Pakistan’s instinctive response to border volatility has often been enhancing security – fences, patrols, and closures. While border fencing remains essential, especially against cross-border terrorism, it must now evolve into a “smart border” model that integrates surveillance with trade facilitation.
Border regions thrive not on barbed wire alone but on balanced economic ecosystems. Chaman, Torkham, and Ghulam Khan could be developed as Special Border Economic Zones (SBEZs) under joint administration, where regulated trade replaces smuggling and legal movement replaces illegal crossings.
In such zones, both countries could benefit from shared customs terminals, bonded warehouses, and simplified transit procedures. The model already exists in other regions — from Iran’s border markets with Turkmenistan to China’s integrated economic enclaves with Asean nations.
Who suffers if trade ends?
The reality is that Pakistan and Afghanistan are economically interdependent despite political friction. Afghanistan depends on Pakistan for food security, energy supplies, and medical products. Nearly 70% of Afghanistan’s essential pharmaceuticals and over half of its processed food imports come from Pakistan.
If trade halts, Pakistan’s exporters — particularly small and medium industries in Peshawar, Faisalabad, and Karachi — would lose a natural market of nearly 40 million consumers. But Afghanistan would suffer more severely, as it lacks alternative land routes for many basic imports and continues to face chronic shortages of fuel, wheat, and medicine.
For Pakistan, cutting trade ties or imposing broad restrictions would mean losing not just a market but also influence — at a time when regional powers are vying to shape Kabul’s orientation. Economic disengagement creates a vacuum that others are ready to fill.
The fate of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline also hinges on a stable, cooperative frontier. The 1,800- kilometre project — envisioned to bring 33 billion cubic metres of gas annually to South Asia — cannot proceed without security and mutual trust along the Pakistan-Afghanistan corridor.
Similarly, Pakistan’s dream of accessing the Central Asian Republics (CARs) via Afghanistan depends on open, predictable transit routes. If Pakistan closes its border or continues treating it solely as a security barrier, it risks being bypassed by alternative corridors under China’s Belt and Road Initiative (BRI), such as the China-Kyrgyzstan-Uzbekistan railway and the Iran-Afghanistan-China corridor.
Reclaiming sovereignty through regulation
The paradox of Pakistan’s border management is that too much informality has weakened sovereignty. True sovereignty lies not in isolation but in control — the ability to monitor, tax, and regulate what crosses one’s frontiers.
The government’s recent decision to curb smuggling through digital scanning, centralised customs monitoring, and inter-agency coordination is a step forward. However, lasting success requires a unified Border Management Authority, empowered to coordinate intelligence, trade, and law enforcement across all agencies.
Moreover, Pakistan must digitise and modernise customs infrastructure, link ports with dry ports in Quetta and Peshawar, and deploy blockchain-based systems for transit tracking. Every legitimate consignment must be traceable; every illegal one interceptable.
A gateway, not a wall
The choice before Pakistan is stark: continue letting its western border bleed through informal trade and insecurity, or turn it into a gateway of controlled prosperity. A border that once symbolised division could instead become the frontline of Pakistan’s economic revival — connecting South Asia to Central Asia, and the Arabian Sea to the steppes beyond the Amu Darya.
To draw the line, Pakistan must first redefine it — not as a barrier but as a boundary of purpose, where sovereignty, security, and commerce converge.
The writer is a former vice president of KCCI, commodities and international trade expert
Business
Rupee falls to all-time low of 92.05 against dollar as oil surge, foreign outflows rattle markets – The Times of India
The Indian rupee weakened sharply on Wednesday, slipping to a record closing low of 92.05 against the US dollar as soaring crude oil prices and global risk aversion linked to the Iran crisis weighed heavily on the domestic currency.The rupee depreciated by 56 paise during the session, pressured by rising energy costs, foreign fund outflows and broad-based weakness in domestic equities, PTI reported.At the interbank foreign exchange market, the rupee opened at 92.05 and slid further to an intraday record low of 92.35 against the greenback. It eventually ended the session at 92.05, marking its lowest-ever closing level.The domestic forex market remained shut on Tuesday due to the Holi holiday. On Monday, the rupee had already fallen 41 paise to settle at 91.49 against the US dollar.Forex traders said the global risk-off mood triggered by the US-Iran conflict strengthened the dollar and intensified pressure on emerging market currencies, including the rupee.Foreign investors sold equities worth Rs 8,752.65 crore on a net basis on Wednesday, according to exchange data, further weighing on the currency.“A sharp escalation in Middle East conflict and the consequent spike in oil prices have reduced investor risk appetite. Higher oil prices increase inflation concerns and fiscal pressure on India (a major oil importer), leading to selling in bonds and rising yields,” said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.Meanwhile, the dollar index, which measures the greenback against a basket of six currencies, was trading 0.23 per cent lower at 98.82.“The dollar index crossed 98 levels comfortably on the risk-off situation prevailing all around the globe with stocks and bond markets getting hit badly, along with Gold and Silver, with predominance of the dollar,” Bhansali said.Brent crude, the global oil benchmark, was trading 1.29 per cent higher at USD 82.46 per barrel in futures trade, as supply concerns intensified after US attacks on Iran and Tehran’s retaliatory actions raised fears over energy flows through the Strait of Hormuz.Dilip Parmar, Research Analyst at HDFC Securities, said, “The Indian rupee recorded its steepest two-session decline since May 2025, as soaring energy prices intensified fears of persistent inflation and a widening trade deficit.This prevailing risk-off sentiment, coupled with high energy costs, is expected to keep the currency under pressure in the near term. Investors are closely monitoring the longevity of the Middle East conflict, as a prolonged standoff would likely drive up the import cost of energy and precious metals while hindering export growth.”According to Parmar, the spot USDINR pair faces immediate resistance at 92.60, while key support is seen at 91.80.On the domestic equity market front, the BSE Sensex dropped 1,122.66 points to close at 79,116.19, while the NSE Nifty declined 385.20 points to settle at 24,480.50.
Business
Trump sides with crypto firms in trillion-dollar battle with banks over stablecoin yield
US President Donald Trump boards Air Force One before departing Palm Beach International Airport in West Palm Beach, Florida, on March 1, 2026, on his way back to Washington, DC.
Mandel Ngan | Afp | Getty Images
President Donald Trump has thrown his support behind crypto firms in their high-stakes battle with U.S. banks over whether they can offer interest-like returns on stablecoins.
Trump, in a social media post late Tuesday, ratcheted up pressure on banks to relent on the stablecoin yield issue.
That’s the key point of contention holding up passage in Congress of the Clarity Act, which is a companion bill to the Genius Act approved last year, setting up a framework for regulated stablecoins.
“The Genius Act is being threatened and undermined by the Banks, and that is unacceptable,” Trump said in his post. “They need to make a good deal with the Crypto Industry because that’s what’s in best interest of the American People.”
Coinbase shares surged as much as 13% in early trading Wednesday, while shares of JPMorgan Chase and Bank of America fell less than 1%.
While Trump’s decision to back the crypto industry could sway members of his Republican Party in the GOP-led Congress, it’s unclear whether his support is enough to ensure the bill’s passage. The move also raises fresh questions over potential conflict of interests, as the president and his family have reportedly generated hundreds of millions of dollars in wealth from interests in firms including the crypto platform World Liberty Financial.
The dispute between the industries centers on whether crypto firms like Coinbase can offer yields on stablecoins. While crypto companies see it as a consumer-friendly innovation that will let people earn money on their idle funds, banks have warned that the competing product could siphon trillions of dollars from their industry.
$6.6 trillion threat?
Executives from JPMorgan and Bank of America, the two largest American lenders by assets, have cited a Treasury study that indicated that banks could lose up to $6.6 trillion in deposits if stablecoins offered a yield.
That could destabilize some banks, especially smaller ones, and remove a source of funding for loans to businesses across the country.
Allowing the less-regulated crypto industry to behave like quasi-banks could heighten systemic risk, banks argue. Crypto firms say that the risks are contained and that stablecoins backed by Treasuries will boost demand for U.S. debt.
“It can’t be, you have these people doing one thing without any regulation, and these people doing another,” JPMorgan CEO Jamie Dimon told CNBC’s Leslie Picker on Monday. “If you do that, the public will pay. It will get bad.”
In recent months, the president has hosted a series of White House meetings between the two sides in hopes of brokering a deal, but the banks haven’t relented, according to people with knowledge of the gatherings.
Now, he is explicitly putting his weight behind crypto.
“Americans should earn money on their money,” Trump said in the post. “This industry cannot be taken from the People of America when it is so close to becoming truly successful.”
‘Full of s–t’
That phrasing is similar to language that Coinbase CEO Brian Armstrong has used in interviews. Coinbase is the largest U.S. crypto platform and provides yield to members through what critics in the banking industry call a “loophole” in current regulations.
Armstrong, seen by banks as their main adversary in this dispute, met with Trump at the White House shortly before the president’s social media post Tuesday, according to a person with knowledge of the meeting. That detail was reported earlier by Politico.
Both banks and crypto firms have reasons to support passage of the Clarity Act, but it’s unclear whether that will happen, given the disagreement. Earlier this year, Trump attempted to pressure banks to cap credit card interest rates, but the industry had enough support among both Republicans and Democrats to ward off that threat.
Tensions between Armstrong and banking CEOs have climbed since the Coinbase CEO publicly called out banks for their opposition to stablecoin yields.
In January, Dimon reportedly told Armstrong he was “full of s–t” during a chance interaction at the World Economic Forum in Davos, Switzerland.
Business
Reeves to stress commitment to end windfall tax in talks with North Sea bosses
Rachel Reeves will reaffirm her commitment to “end” the windfall tax on North Sea oil and gas as she meets energy bosses.
The Chancellor is set to discuss the gas and oil prices sent soaring by the Middle East war in talks with firms including BP, TotalEnergies and Serica.
Ms Reeves came under pressure ahead of the Downing Street talks from Scottish First Minister John Swinney to axe the charge, which is officially known as the energy profits levy.
Introduced by the Tory government in the wake of the war in Ukraine – which sparked a sharp rise in energy prices – the charge was brought in to claw back some of these unexpected profits for the Treasury.
The Prime Minister’s spokesman told reporters: “The Chancellor will convene a meeting with industry leaders from oil and gas firms today… including BP, TotalEnergies and Serica.
“And they’ll discuss the ongoing volatility in the oil and gas prices due to the conflict in the Middle East.
“The Chancellor will make clear that she remains committed to end the energy profits levy and replace it with a more permanent and predictable regime.
“She’ll be reaffirming her commitment to support jobs and investment in the industry and look at ways to protect everyday people from the downstream impact of these costs.”
Earlier, Mr Swinney again insisted it was “utterly essential” that the UK Government scrapped the windfall tax, which he said was impacting upon investment in the North Sea and costing jobs.
He said the current “uncertainty over energy supplies” as a result of the conflict in the Middle East was now a “material consideration” for the scrapping of the charge – which is officially known as the energy profits levy.
Speaking during a visit to Inverness, Mr Swinney said he had hoped the Chancellor would use Tuesday’s spring statement to axe it.
When that did not happen, Holyrood’s Finance Secretary Shona Robison said Ms Reeves must use Wednesday’s meeting with North Sea industry leaders to “announce an end to this tax on Scotland’s energy”.
Mr Swinney meanwhile insisted: “Now that we have the conflict in the Middle East I think it is utterly essential that the energy profits levy is removed.
“I had hoped it would be removed yesterday in the spring statement. It hasn’t been but the Chancellor is meeting the industry today.
“And I hope that results in the removal of the energy profits levy.”
Mr Swinney, speaking to the Press Association, added: “I’ve been saying to the UK Government for some time that the energy profits levy should be removed because it is hampering investment in the North Sea oil and gas sector, which is resulting in a loss of employment at a much faster rate than we anticipated.”
With the conflict in the Middle East leading to “uncertainty over energy supplies in the period to come” the First Minister said that was now a “material consideration in whether the energy profits levy should be maintained”.
He insisted however: “I don’t think there is a case for it and it should be removed.”
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