However, prices – and thus business – are likely to normalize now that the two sides have inked an agreement to reopen routes, which are used to transport 70 percent of non-lethal NATO supplies into Afghanistan.
“Good days are back,” says a smiling Kaka, who wears a traditional Pashtun turban, his hair in long strands.
How Pakistan's black market economy works
Figures about the actual size of Pakistan’s black market or underground economy vary, but the Federal Board of Revenue said this week that it had grown to more than half the size of the formal economy, according to a researcher. Karachi-based economist Shahid Hassan Siddiqui says that more than 50 percent of Pakistan’s total economy depends on the black market.
“Pakistan is one of a very few countries where government actually facilitates black economy through laws, which has brought the country’s tax to GDP ratio lowest in the world,” says Dr. Siddiqui.
According to intelligence sources, almost 70 percent to 75 percent of US-made weapons in Pakistan make their way into the black market through Afghan smugglers who buy these weapons from Afghan soldiers and policemen. The remaining 25 percent of illegal items are sold by different local militant groups who also use the NATO supply routes to transport them.
Coordinated attacks on NATO convoys within Pakistan by militant groups feed the black markets.
Security analysts believe that in many cases militants and crew members of NATO containers have a close nexus.
“Militants, in many cases, get away with military-related equipment before burning the containers, and leave non-military related commodities, like food stuff, soft drinks, mineral-water bottles, office equipment, spare parts of vehicles, boots, jackets, cigarettes, etc., for the crew members, who later sell them in the black market,” says Ikram Sehgal, a Karachi-based security analyst.