EDITORIAL: Things are moving quickly indeed in and around the Gulf. The Pakistani prime minister and Iranian president inaugurating the first of six border markets, a deal to supply electricity to Gwadar and talks of a possible FTA (Free Trade Agreement) down the road would’ve been almost unthinkable just one year ago. Hopefully, Pak-Iran cooperation will grow to become a big part of the positive changes sweeping across the entire region. So far, Pakistan has been able to develop decent trade relations with only one of its neighbours, which makes the progress with Iran even more welcome.
The Mand-Pishin border market is an interesting and innovative initiative. It will invite locals on both sides to engage in productive and profitable commerce where previously only smuggling provided sustenance. It will, in addition to expanding the real economy and shrinking the black economy, also provide a conducive environment for bulkier trade in future as individuals and businesses make contacts and build networks across the border, setting the stage for expanding bilateral trade to around $5 billion every year, as PM Shahbaz Sharif proudly announced after inaugurating the market.
Besides, setting up markets is the best way to organically develop neglected societies. PM Sharif’s optimism that the marketplace will trigger financial growth in surrounding areas as well was not misplaced. “The market would provide a thriving platform for increasing cross-border trade, fostering economic growth, and opening up new avenues of opportunity for local businesses,” he rightly said.
Yet the most important take-away from the border meeting was the joint announcement that “we are going to finalise a free trade agreement on priority basis”. It’s this sort of economic/financial diplomacy that both countries desperately need right now. This would have been problematic in the past. But now the Saudi-Iran thaw has ruled out any objection from Riyadh, while the resistance to America’s bullying since the eruption of the Ukraine war makes this just the right time to challenge some of the most unfair elements of Washington’s sanctions regime when it comes to engaging with Tehran.
This should encourage Pakistan’s and Iran’s governments to finally resolve the lingering controversy over the Pakistan-Iran gas pipeline. It beggars belief that Islamabad got on board the project, agreed to pay hefty penalties if it missed important deadlines, and then collapsed under American pressure even as the Iranian side constructed their end of the pipeline.
And now Pakistan faces as much as $18 billion in fines if Tehran doesn’t see any way of getting it going. Therefore, this is going to take a whole lot more than just requests to delay decisive action. This matter will have to be resolved. And if numerous countries are sidestepping American sanctions and trading with Russia, especially buying their oil and gas, then it’s time for us to make a forceful case of dealing comprehensively with Iran as well. Of course, there’s also the fact that if the pipeline project collapses it will also sour other elements of the relationship.
These developments, especially the border market and focus on under-developed areas, should have come a long time ago. Yet we chose to become hostage to global concerns far away from our shores, even when they had nothing to do with us. The best we can do is learn a very good lesson because if we had only relied on basic common sense and built better linkages with our neighbours – at least the countries that wish to engage with us, unlike India – we would never have been in the situation where we need bailout money just to avoid catastrophic default. Pak-Iran cooperation should make the future better than the past for both countries.
Copyright Business Recorder, 2023
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