Export Competitiveness of Afghanistan with Pakistan: An Economic Evaluation

Abstract

The main objective of this study is to analyze the export competitiveness of Afghanistan with Pakistan due to Afghanistan-Pakistan volume and dynamics of trade. The methodology employed is revealed symmetric comparative advantage index (RSCA) in order to gauge export competitiveness. Based on the rank the results are classified into four categories: highest revealed symmetric comparative advantage (HRSCA), highest revealed symmetric comparative disadvantage (HRSCD), marginal revealed symmetric comparative advantage (MRSCA) and marginal revealed symmetric comparative disadvantage (MRSCD). Out of 71 commodities traded between Afghanistan and Pakistan at three-digit level of SITC (Rev 3) classification Afghanistan enjoys HRSCA in 5 commodities, HRSCD in 42 commodities, MRSCA in 10 commodities and MRSCD in 14 commodities. The results suggest that Afghanistan has highest and marginal comparative disadvantage in more than half of these commodities (78.8 per cent) exported to Pakistan. Afghanistan can improve its market share for Lime, cement, fabrica. constr. mat. (excluding glass, clay), (661), Dyeing & tanning extracts, synth. tanning materials (532), Wood in the rough or roughly squared (247) and Animal or veg. oils & fats, processed, n.e.s.; mixt. (431) in Pakistan. Afghanistan has to adopt special strategies to improve the competitiveness of those commodities that fall in marginal comparative advantage and disadvantage. To increase the volume of cross border trading, political and diplomatic channels are required among the countries