As we know that Tajikistan President Emomali Rahmon is due in Pakistan today (December 14) on a two-day official visit, the business fraternity attach special significance to this visit as they say that it will open new opportunities for Pak-Tajik trade in the changing economic scenario at international level.

Though the main objective of the visit is to promote bilateral relations but trade promotion too is on the agenda between the two countries. Various multiple bilateral accords including business agreements and memoranda of understanding are planned on the occasion. In fact, the main agreement is said to  be a transit trade accord that was approved by the cabinet few days ago with a view to diversifying the trade ties  in the wake of growing geo-economic partnership. As a matter of fact, both are brotherly countries, having a lot of common grounds like historical, cultural and religious ties between the two people. Since Pakistan has been attacking great importance to enhancing trade with Central Asian countries, this visit of the Tajik President is being viewed with great importance.

The Wakhan corridor has been giving access to our country to the CIS countries and hence  trade can be promoted in real sense of the world with the Central Asian countries. In this backdrop the new bilateral trade maneuvers with Tajikistan and other CIS countries is a good augury.

Earlier this year, Preferential Trade Agreement (PTA) between Pakistan and Uzbekistan was finalized to enhance the exports capacity to Central Asian States from the Textile, Food, IT and Pharmaceuticals sectors and will also help establish working relationships with these states.  The focus on regional trade is a welcome augury and financial experts are of the view that with concerted efforts, a strong economic bloc could be established between Pakistan and neighboring Afghanistan and the five Central Asian economies, and subsequently enabling  us to penetrate  European markets as well. Financial experts have underscored the need for furthering strengthening the trade with neighborising country which will also provide job opportunities to dwellers of the border areas like those in Balochistan province which lacks such opportunities.

Afghanistan, Iran, Turkey and the Central Asian states have emerged to be top destinations for Pak good in recent months as exports to these countries have risen to $938 million in the first quarter of current fiscal year as compared to that of corresponding period last year. The govt attributes this success to efforts which focused on enhancing regional connectivity. As a matter of fact, our trade with regional countries except China, has historically remained far below its potential. The increasing trend in regional exports during the last few months will have positive impact for country’s foreign exchange, jobs, and productivity growth which have registered a decline during the pandemic. The purpose to say is that much more needs to be done to secure a sustainable growth. There are still various factors that are hindering our exports growth and a mere focus on regional connectivity will not ensure a sustainable growth in the long run. For long term and balanced trade, the govt needs to focus on efforts to remove obstacles in the way of increasing exports. Analysts say that the key factors that are hindering exports are high taxes and tariff rates, low availability of long-term financing for companies to enhance the base of export capacity, insufficient provision of market intelligence facilities for exporters, and last but not the least the low productivity of  our companies and businesses. One way to do is to develop infrastructures and upgrading the road conditions, providing telecommunication facilities and establishing banking channels at vital points in the areas bordering the neighbor countries to facilitate the traders.

A connecting land route from Afghanistan to Central Asia would provide an effective and cheap alternative to Pakistan as compared to routes via Iran or China, The reginal facility which earns Pakistan billions in export revenue through exports to reginal markets must be the focus of attention. The various benefits which this trade with regional countries offer is the low transport cost,  low tariffs,  scheme guarantee include the generous tariff.  And as such0 we must make the most of this facility and broaden the scope of our exports which is need of the hour in these testing economic times.

At the same time Pakistan must use its diplomatic channels to continue to be the beneficiary of this facility.  There is no denying that shares  of  central Asian states is on the rise in our exports  but  that can increase by manifold as there still remains a huge untapped potential in the markets of the  neighbouring economies.  It can not only ensure rise in our exports but can also help control our import bill which has also enhanced substantially in during the pandemic and in post pandemic scenario. Analysts say that an import market of over two trillion US dollar is awaiting us on our borders, of which we have been utilising just a meagre share of 0.19%. They say that a penetrating push in the potential markets of the neighboring economies is need of the hour. For instance they say that exports to Afghanistan have been on a continuous downward slope since 2011 due to the volatile security situation in war torn Afghanistan and decreasing demand in the wake of  withdrawal  of international troops together with the recent turmoil in Afghanistan has further impeding our trade with Afghanistan. On the other hand, the sanctions on Iran for over a decade have adversely affected Pak-Iran trade, however optimism is in the air as one sees a rapprochement in US-Iran ties. In the north, CPEC is ray of hope as it will provide great opportunity to enhancing exports to Chinese market. Moreover, the regional trade can also help increase transit trade and the free moments of transport may usher in a new era of economic prosperity in the region. As per available reports, there as many as 350 million markets of Pakistan and Central Asian countries as also Afghanistan which can play a vital role in world trade. Business communities of  these economies should support such moves as it will open up new trade venues and opportunities.

However, this plan needs all out efforts and it is herculean task.  Pakistan’s economic can also be partly blamed on low trade volume with regional states including its neighbor except for China with whom we have a PTA. There is a greater need for exploring new venue in regional trade as Pakistan trade with regional economies has been very low during the past decade. However, the positive development is that regional trade has registered a 35 per cent increase in the current year but the capacity is much more and it can be further enhanced.

Published in The Daily National Courier, December, 14 2022

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