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Express Tribune
04-05-2025
- Business
- Express Tribune
Trillions lost to smuggling
Listen to article A new study has found that smuggling costs Pakistan's economy an astounding Rs3.4 trillion in losses, which is about 3.5% of GDP. The figure also represents about 26% of the government's tax revenue target for the ongoing fiscal year, meaning that the economy could, on paper, be put on track for success 'simply' by ending smuggling. Unfortunately, ending smuggling is anything but simple. Even wealthy countries with well-documented economic systems often struggle to keep smuggling at low, nuisance levels. Meanwhile, Pakistan and its massive informal economy — estimated to be about one-third of the economy - are ripe for smugglers, especially those taking advantage of Afghan Transit Trade, which alone is credited with causing over Rs1 billion in annual losses, according to a report by the Policy Research Institute of Market Economy. But smuggling is not just about government losses — the illegal trade can greatly impact the quality of prices available in the local market, while also discouraging the establishment and growth of local production. This leads to the loss of potential jobs and long-term growth potential which, in turn, compounds efforts to fund improvements in health, education and other social services and infrastructure. The proliferation of smuggled goods also opens the door for counterfeiting, which is of grave concern in areas such as medicine, where almost half of some categories of drugs are allegedly counterfeit. It is, therefore, unsurprising that Pakistan's subpar showing on the 2025 Illicit Trade Index — the worst in the region — also couples with a finding that we are generally among the worst economic performers among all developing economies. While improving enforcement is not a total solution, it is a start. The government should also look into improving the archaic customs and shipping port infrastructure. Better risk profiling and scanning of containers would go a long way in cracking down on smuggling, as it would help keep the goods from ever entering the local market. The harder part of discouraging smuggling is encouraging a societal attitude shift to reject smuggled goods altogether.
Time of India
02-05-2025
- Business
- Time of India
Pakistan ranks 101 in global Illicit Trade Index 2025, faces annual loss of Rs 751 billion
Pakistan's struggle with illicit trade has resulted in a significant annual revenue loss of Rs 751 billion, according to the 2025 Illicit Trade Index. Ranked 101 out of 158 countries, Pakistan faces vulnerabilities in internal trade networks and sector-specific compliance. The report highlights the need for deeper reforms within the country's regulatory and enforcement systems. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Pakistan has been ranked 101 out of 158 countries in the 2025 Illicit Trade Index, raising serious concerns about its economic environment and ability to attract investment, according to a report by The News country's struggle with illegal trade is resulting in an alarming annual revenue loss of Rs 751 billion, with the tobacco sector alone accounting for Rs 300 billion of this findings were presented in a new report titled "Pakistan's Battle Against Illicit Trade: An Analysis of Challenges and Pathways to Resilience," released jointly by the Policy Research Institute of Market Economy (PRIME) and the Transnational Alliance to Combat Illicit Trade (TRACIT) on report highlights five key sectors driving these losses: Tobacco (Rs 300 billion), petroleum products like petrol and diesel (Rs 270 billion), tires and lubricants (Rs 106 billion), pharmaceuticals (Rs 60-65 billion), and tea (Rs 10 billion).Pakistan scored 44.5 on the Illicit Trade Index, falling below the global average of performance across six dimensions of the Index can be gauged by the highest score observed in Trade, Customs and Borders (75.4), indicating relatively strong border controls and customs management mechanisms. However, Supply Chain Intermediaries (25.9) and Sectoral Illicit Trade Indicators (29.3) score notably low, pointing to serious vulnerabilities in internal trade networks and sector-specific compliance. Moreover, moderate scores in Taxation and Economic Environment (47.3), Regulatory Framework and Enforcement (46.4) and Criminal Enablers of Illicit Trade (42.7) suggest systemic weaknesses in policy implementation and enforcement capacity, The News International the findings suggest that while Pakistan is making some progress at the borders, much deeper reforms are needed within the country's internal trade, regulatory, and enforcement systems to curb illicit trade and support sustainable economic development.
