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Latency of Afghanistan-SAARC Merchandise Trade Relation: An Economic Evaluation

Ms. Khatera Sadiqi, Dr. Nassir Ul Haq Wani

Volume 1 Issue 2 | Apr 2018

DOI: 10.31841/KJEMS.2021.82

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Focusing on the analysis of South Asia Association for Regional Co-operation (SAARC) trade, the study

attempts to analyze the merchandise trade performance of Afghanistan with SAARC region by employing the

RCA, RID and TII over a time period of nine years from 2008-2016. A brief analysis of trade baskets of SAARC

countries shows that trade of Afghanistan relies heavily on the SAARC countries especially on the imports

from India and Pakistan. The growing intensity of trade between Afghanistan and Bangladesh, India, Pakistan

and Srilanka reflects an alteration in the trade scenario of SAARC region. With every passing year from 2008-

2016, the trend intensity has amplified, thus confirming the growing trade relations among the economies. On

the evaluation of RCA and RID of Afghanistan against Bangladesh, India, Pakistan and Srilanka, the export

and import baskets are less relatively diversified for Afghanistan. Afghan economy is still an agricultural

driven economy and the analysis of SAARC region’s, through revealed comparative advantage index, finds

that Afghanistan has trade comparative advantage in agricultural commodities and the manufacturing base is

missing. The study makes a set of implications that given its overriding size, human resources, and aspirations

for a global role; Afghanistan will have to take on a disproportionately larger responsibility for endorsing

regional cooperation in South Asia. Adjoining governments will have to respond confidently to Afghan initiatives

for successful regional incorporation in South Asia.