Economic Constraints and Tragedy of Afghan - MyAssignmenthelp.com

Question: Discuss about the Economic Constraints and Tragedy of Afghan. Answer: Brief overview of the trade history of the chosen countries Spain can be considered to be the fourth largest economy in the Eurozone which has a GDP of 1.1 trillion (Vives, Jaime and Vicens). The economy of the aforementioned country grew by 3.2 percent which is the only witnessed positive annual growth rate since the year 2007. Spain is the 17th largest export economies of the world. As recorded in the year 2016 Spains import were calculated to be 299 billion dollars. The net worth of the exports of the country was calculated to be 275 billion dollars. The top exports of Spain include Vehicle parts, Refined Petroleum, Delivery Trucks and Cars. According to the Harmonized System of classification its top imports were Petroleum Gas, Crude petroleum and packaged medicaments. Afghanistans Economy has improved significantly in the past decade due to investment of billions of dollars by international assistants and expatriates of Afghanistan. The nation has witnessed political stability and reliability after the fall of the Taliban Regime (Ge, Ying, et al). It is due to this that the country has received more financial assistance from its investors and expatriates. The GDP of the nation is 64.8 billion dollars with an exchange rate of 18.4 billion dollars. The countrys main export partners are Tajikistan, India and Pakistan. While its chief import partners are China, India, United States and Turkmenistan. The export items of the country include Afghan Rugs, wool, gemstone, hides and fruits. While its top import items include machinery, textiles, petroleum, food and capital goods. Social, political and economic overview of the chosen nations Social and political overview of Spain: Spain is a constitutional monarchy which stands on a parliamentary democracy. Political Power in Spain is decentralised. Due to this the communities have a legislative fiscal and executive autonomy which facilitates trade. It can be said that after hitting six years of recession period Spain started recovering in the latter half of 2013. It can be stated that the socio political events that have taken place in Spain have had serious consequences on its economy and trade. The financial crisis faced by Spain in the year 2008 was viewed as a consequence of the decision of the Prime minister of Spain to bring forward the general election which was supposed to happen in March 2012 but was brought forward to November 2011. It can be stated that the financial and economic crisis faced by Spain exposed weakness in the Spanish society and Economy. Economic overview Spain: The economy of Spain strengthened remarkably by the year 2016. It can also be mentioned that Spain experienced a growth rate of3% of the Gross Domestic Product (Cohn and Theodore). The economic growth experienced by Spain was supported by deflation, job creation, lowering of oil prices, fall in the value of Euro, reforms related to implementation of policies and increased domestic demand. Growth rate of the Spanish economy exceeded 3.2% of the expectation in the year 2016. It can be said that the unemployment rate in Spain has fallen but it still remains quite high compared to other European nations. The greatest source of income for the nation still remains to be Tourism as Spain is the third most popular tourist destination after France and the United States. The tertiary sector of tourism employs 75% of the population in Spain and contributes to two thirds of the Gross Domestic product. Agriculture contributes to 2.5% of the GDP of Spain. Social and Political Overview of Afghanistan: The country Afghanistan has witnessed slow economic recovery since the fall of the Taliban regime. Afghanistan has always witnessed political instability which has had an adverse impact on the society and trade. The primary reason for the slow economic recovery is the political insecurity which adversely affects the consumer and investment demand. Economic Overview of Afghanistan: It can be said that poverty rate has increased in Afghanistan since the international troops were withdrawn from Afghanistan in the year 2011 (Berdal, Mats). It has also resulted in decline of economic growth. Afghanistan has faced numerous political challenges due to the increased insurgency. The World Bank has initiated a programmatic approach to provide financial support to Afghanistan National Peace and Development Framework. Orography of the nations The Meseta Central is a plateau located at the heat of peninsula of Spain. The plateau is rimmed by mountain ranges which slope to the west gently. The Sismeta Central act as the dorsal spine of the Meseta Central dividing into two northern and Southern regions (Gutirrez, Francisco, and Mateo Gutirrez). The mountains of Sismeta Central which extend westward to Portugal exhibit glacial features. However the aforementioned mountain ranges do not create any barriers for transportation and allows railroad and road transportation to the northeast regions and northwest regions. It can be mentioned that the mountain ranges bordering Meseta Central are Cordillera, Cantbrica and Sistema Ibrico. Pyrenees mountain range lie to the northeast of Meseta Central and Sistema Penibtico lie to the south east of Meseta Central. The country Afghanistan is a landlocked country which is located between south and Central Asia. The Hindu Kush mountain ranges run from northeast to south west of the country and divide the same into three major regions. They are: Central Highlands, South-western plateau and the northern plains (Doebrich, Jeff). It can be said that the Hindu Kush mountain range is the tallest mountain range in Afghanistan. The highest point in the Hindu Kush mountain range is Noshak which has an elevation of 7492 metres. Important passes include Khyber Pass that connects Pakistan and Afghanistan, Slanag and Kushan passes andUnai Pass. The Wakham Corridor which lies to the northeast of the nation is located between the Hindu Kush and Pamir mountains. The Wakham Corridor leads to the Wakhjir Pass. Infrastructure of Trade of the chosen nations Trade Infrastructure of Spain: Road: Spain has a network of motorway and dual carriage way of fourteen thousand kilometres. The network of roads in Spain has been constantly renovated to enhance trade. It can be said that the infrastructure of Spain is well equipped and well developed to handle international business demand (Bensassi, Sami, et al). It can be said Spain has established good transportation links to all the main cities. Maritime and Air: There are over 53 sea ports and more than 47 airports in Spain. Therefore maritime and air trade is given equal preference as land trade. Rail The capital of Spain has good train connectivity to all the major cities of Spain. It can be said that Spain currently has the network of 15000 kilometres of high speed rail transportation service (Bertomu-Snchez, Salvador, and Estache). Private enterprises have been created after the liberalization of the freight sector, which aim to transport goods by railway. Madrid and Barcelona are considered to be the major transportation hubs of the country. Infrastructure of Afghanistan It is to be mentioned that Afghanistan has achieved some improvements in Infrastructure since the year 2002 due to the investments made by the foreign investors and expatriates. However, there are still some gaps which need to be filled to improve the overall infrastructure of the country. Some of the main constraints acting as hindrances to trade are: poor transport connectivity, incomplete regulatory reforms and trade policy, human skill constraints, political instability and security conflicts and lack of funding for maintenance of existing infrastructure (Hussain, Ishrat, and Muhammad Athar Ilahi) Road Afghanistan mainly conducts trade by land routes which pass through other countries like Russia and Pakistan due to lack of proper infrastructure. It can also be stated that since. It has to depend on a sovereign country for its cargo to reach international shipping markets. Air Infrastructure of Afghanistan remains constrained to this date. India and Afghanistan have jointly formed an air corridor to carry on Air trade and by pass the Pakistan Trade route. Maritime Countries that do not have direct access to sea coasts and maritime trade face many challenges in realizing the potential gains of the nation. Since Afghanistan is a land locked country it faces a major disadvantage while trading with other countries as it cannot engage in direct maritime trade. However, India and Afghanistan have entered in a port agreement in order to develop the strategic port, Chabahar in Iran. The aim of the agreement is to build a transport-trade corridor between three countries. Export and Import Value of the Chosen Nations The total value of goods and commodities exported by Spain was calculated to be 281,777 million U.S. Dollars. The Total value of the goods and commodities imported to Spain was calculated to be 302,529 million U.S Dollars as recorded in the year 2016 (wits.worldbank.org 2015). It can be said that Spain had imported 4516 products to 230 countries while it imported 4566 products from 228 countries. The top five items exported by Spain included Automobiles with diesel engines, Automobiles with reciprocating piston engine, petroleum oils and medicaments of mixed and unmixed products. The primary items that Spain imported were petroleum oils, motor vehicle parts, crude petroleum, medicaments and Automobiles with diesel engines. Afghanistan is the 104th largest export economy among all the countries of the world. As estimated in 2016 Afghanistan had exported goods and commodities worth 482 million dollars and imported goods and commodities worth 3.77 billion dollars which resulted in a negative trade balance of 3.299 billion dollars. The primary items exported by Afghanistan are Vegetable Saps, tropical fruits, Carpets that are knotted and Grapes. However its top imports include inedible fats, petroleum gas, ornamental trimmings and wheat flours (wits.worldbank.org 2015). Trade routes of the chosen countries As mentioned before Spain has well developed trade infrastructure. It has an elaborate network of roadways which connects all the cities of Spain which are well maintained (Viravan, Amnuay). The country also has many important seaports and airports which help facilitate trade. The important sea ports that handle the most annual traffic of ocean freight are: the seaport of Barcelona, the seaport of Valencia, Bilbao Algeciras, Madrid and Zaragoza. It can be mentioned that the seaports are technologically well equipped and capable of handling million of tons of cargo. It can be mentioned that Madrid and Zaragoza are dry ports which serve as the distribution point for gods arriving to Spain by sea routes. The dry port of Madrid has links to the other ports of Barcelona, Valencia and Bilbao. Transportation of freight by Airways is also possible as Spain has many international airports. However, transportation of freight by air poses some limitations regarding the volume and weight of the cargo. As stated before Afghanistan faces some limitations while trading with other countries since it mainly has to depend on land routes as it is a land locked country. It can be said that Afghanistan has to depend on Pakistan for moving the freight to other countries (Khan Miankhel, Adil). Pakistan acts a transit route for the goods arriving in and going out of Afghanistan. However due to political unrest and tension between Pakistan and United States, Afghan businessman has suffered huge losses as Pakistan had blocked supply routes. The other trade route passes through Russia, Kazakhstan, Uzbekistan and Tajikistan. This trade route is called the North Distribution Network. This trade route involves road rail and air routes. It can be said that though the transit route through Pakistan is less expensive, the North Distribution Network is far more reliable. The third trade route passes through Iran. It can be said that Iran has been encouraging Afghan business with a view to relocate the international offices to Iran from Saudi Arabia and United Arab Emirates. It is to be stated that India and Iran are developing a highway and rail road systems which will connect the port of Afghanistan. The time frame for import and export Spain, as a developed country is considered as the 17th largest export economy in the world. The process of importing and exporting is generally too long and increases the risk of perishable goods. A Summary Declaration that is filed once the items are presented to the customs officials covers the goods imported and exported from EU (Napshin, Stuart and Brouthers). The goods are usually imported and exported in the firm of shipping. The time taken in the process of import and export are a little lengthy. Such a time frame results in loss if the goods shipped are perishable. Perishable goods are referred to the food products that must be used within a period of short time. On the other hand, Afghanistan is a delivery country that imports goods in 5-8 days with the help of standard shipments. There are certain items that are banned from import to Afghanistan. For exporting items from Afghanistan, transit permission is essential for shipment transiting through Pakistan. Afghanistan exports goods like fruits, nuts, wool and afghan rugs and it imports goods like machinery and other capital goods (Phillips and C). However, the flow of import and export to Afghanistan is a also a time taking process. The Afghan Customs Department collects tariffs on all the imported and goods that are exported from Afghanistan. The time consumption is too much in case of perishable goods. The constraints of the transport The process of import and export takes place with the help of shipping. Other than this, goods are exported and imported by road and flights. Truckloads of goods are exported and imported to other countries by the most popular transport routes. Therefore, in the process of transportation by roads, there are a few hurdles, which they face (Escanciano, Carmen and Santos-Vijande). There are high chances of the trucks to get high jacked. There may be problems or corruption in the custom procedure. When there is a scenario of high-jacking, the company faces tremendous loss as it loses all the goods. Goods imported, exported by cars or trucks is time consuming, and hence it delays the entire procedure of importing and exporting. Road blockage can also be reason for the delayed transportation. Afghanistan being a developing country faces serious safety issues while importing and exporting goods. The goods are transported in flights, ships and by roads. International flights of Afghanistan that are operated by airlines from countries meet the safety standards. Therefore, they face more trouble while transporting the goods. Since there are safety issues, the airplanes or trucks might get high-jacked. The roads not being well constructed also acts as a constraint of transport (Bandeira and Moniz). The customs regulations and procedures in Afghanistan are not consistent. Since, the country is not developed it faces such issues transportation problems. When the goods are shipped, the procedure of export and import is not smooth if there is lack of port personnel. Documentation required for import and export Spain has a documentation procedure for import and export. The official model for written declarations is the Single Administrative document. Spain does not enforce any quota on products that are manufactured in the United States. Import documents are essential. Without licenses, goods will not be allowed to be imported and exported from Spain. Importers have to apply for import licenses at the Register of Spains Secretariat of Commerce at any of the regional offices (Anthony). The license if granted is valid for six months and it can also be extended. It is standardized and not difficult to obtain. Regulations also establish fines for delaying the custom procedure. Therefore, goods that are shipped to Spanish customs area without proper import documentations may result in substantial charges. In Afghanistan, every imported and exported products must submit a declaration of customs and other shipment documentation like the original bill of lading and packing list. The documentation is carried out at the Custom Post in Afghanistan (Gaur, D and Jasmin). The documents that are usually required are the original bill of lading stating the full name and address of the Importer in Afghanistan, declaring the goods in transit to Afghanistan, to show the nominated agents as the Notify Party. The original invoice and the packing list should state the net weight, quantity and dimension of each packet of the goods in transit to Afghanistan. The original proforma invoice must be duly signed and attested by Ministry of Commerce in Afghanistan. Obtaining these documents are easily available. The delivery of the goods generally takes 7-8 days from Afghanistan. Trade Facilitation roadmap Trade facilitation refers to a vast area and activities such as transportation, business efficiency and government regulations and controls. In order to obtain trade facilities all the agencies at the border must be involved. Spain, being the developed country is the fifth largest economy in the European Union and it is still growing in the euro zone. Spain and UK are known as the major trading partners (Wilhelmsson). The World Trade Organization (WTO) is set up as a forum for trade negotiations, setting of rules and resolution of trade disputes with the member countries. Issues are usually discussed in the WTO trade facilities. The basic of objectives of Trade Facilitation Strategy are to reduce the cost of export, to establish a National Single Window for Exports and to reduce the number of days that are needed to reduce. In Afghanistan, the transit transport system can be improved. The safety measures should also be developed in such a developing country. With technological developments, companies must manufacture larger and faster road vehicles for importing and exporting goods with the help of road transit. Infrastructure must be maintained. These trade facilities if improved will result in speedy delivery of goods across the world (Sahai and Laxmi). Safety measures must reduce the chances of high jacking. Port facilities and services should be provided. Transit cargo constitutes a small proportion of cargo throughout in the ports of the developing countries. Port transit must remove the hurdle of industrial strike to make the procedure of import and export smooth. Prioritization of the different areas for improvement Spain is a developed country but it still needs development and improvement. During importing and exporting goods, they must improve the process of communication among the importers and the exporters. The documentation process should be made clear. The ways of importing and exporting the goods should be made faster by developing faster vehicles. The faster the products or goods reach, the happier the customers (Jorge et al.). Spain must strengthen the Union ensuring closer and better ties with other regions that have been marginal to the EC. The Trade facilitation solution must solve the problems of the landlocked countries. The Custom Reform must strengthen the trade facilitation in Afghanistan. The human resource management in the Afghan Customs Department should develop and improve more. Higher sustainable employment must also be developed for better economic growth. Afghanistan is open for international trade and tends to provide more opportunities to the people and grow faster (Bosch, Francesc and Aguado). Afghanistan can receive more benefit from its international trade opportunities than it does at the present. Afghanistans export base is generally narrowed and hence it should be widened. Facilitation Trade agreement draft between poor nation and wealthier nation Developed countries require help to implement the provisions of the members of the World Trade organization who have introduced the Trade Facilitation Agreement. The Trade Facilitation Agreement is a draft made between the poor nation and the wealthier nation. The Facility performs as a focal point for implementation (Thomas and Nguyen). Spain is the wealthier nation here that facilitates the agreement of trade. International organizations are set up to form the facilitation trade agreement. Afghanistan, a developing country is assisted by the Trade facilitation Agreement Facility. It is therefore, treated as a poor nation (Constantine). It evaluates their ability to implement the Trade Facilities Agreement by selecting provisions of the Agreement. The agreement of draft is prepared to protect the nations in the process of exporting and importing goods. 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