Trade, connectivity with CARs to be enhanced thru Iran, Afghanistan: PBF

LAHORE: Pakistan Businesses Forum (PBF) said government is working on a policy to enhance trade and connectivity with Central Asia Republics (CARs) through Afghanistan and Iran and has already taken several measures.

PBF President, Mian Usman Zulfiqar said the government and business community has long yearned to connect itself to Central Asian States in search of new markets and offer them a route to a warm-water port. However, volatility in Afghanistan for the last four decades stood in the way of realising those goals.

Now PBF president advises the government to lend strong support to the Tajik government in its efforts to become a member of the Quadrilateral Traffic in Transit Agreement (QTTA) by involving the Chinese government, thereby allowing Pakistan to export to other member nations of the Commonwealth of Independent States (CIS) using Tajikistan as a storage hub. This is because Kazakhstan and Kyrgyzstan are also members of the QTTA and will provide Pakistan access to CIS countries.

He said we must incentivise the transporters to run regular freight services between Pakistan and the CARs. Also functioning of Pakistani companies on free on board rather than cost and freight and carriage and insurance paid to improve logistics. This means that the importers in the CARs will be paying for the freight transportation charges while Pakistani exporters will bear the risk of transporting the goods as they still own the goods during transit.

Similarly Trade Development Authority of Pakistan (TDAP) specially advised to facilitate these reforms including availability of facilities such as Gwadar Port and elements of the China-Pakistan Economic Corridor to the CARs so that they can export to other countries in South and East Asia through Pakistan. This will increase interdependency between Pakistan and the CARs, strengthening their relations and allowing the transit trade to flourish.

The State Bank of Pakistan (SBP) should make receivables discounting possible in order for Pakistani exporters who export to the CARs in order to obtain short term loans against accounts receivables. This loan will serve as a short-term solution for the liquidity crunch in the CARs allowing Pakistani exporters to repay the loan when they receive payments for their export products.

The SBP in coordination with the Government of Pakistan should also provide incentives for setting up subsidiaries and desks of Pakistani banks in the CARs. This will enable Pakistani exporters to receive payments in a timely and efficient manner through formal channels bringing Pakistan’s importance up to par with regional competitors.

Further TDAP may advised to hire language professionals to teach Pakistani exporters English, Uzbek, Kazakh, Tajik, Russian, and other languages spoken in Central Asia in order to support the ease of trade with Pakistan.

TDAP may also facilitate manufacturing of export products which comply more closely the with packaging and labeling requirements of Central Asian governments.

PBF President Usman Zulfiqar even demanded that the government may facilitate the registrations of pharmaceutical products and surgical products in Uzbekistan, Kazakhstan, and Tajikistan specifically so that Pakistan can increase its market share in the CARs and beyond. This might pave the way for Pakistan to export said products throughout the EAEU and the CIS.

This is because both the EAEU and CIS are economic unions and, as such, products registered in one member country may be exported by Pakistan to all member countries from a regulatory perspective.

Copyright Business Recorder, 2022