EDITORIAL: Prime Minister Shehbaz Sharif’s visit to Tajikistan and his personal push to increase bilateral trade could, if followed through properly, mark an important turning point for the economies of south and central Asia.
Ours are similar countries, with similar concerns and aspirations, and we’re close to each other, yet the “current trade volume does not reflect the strong relationship”, as the PM rightly pointed out.
Significantly, the leaders of the two countries also discussed relaxing visa requirements. It seems they are eyeing a deep, formal relationship in which business, trade and investment deals will lead the way in binding them together.
This is smart thinking. It is easier and more beneficial to foster alliances with relatively small economies and emerging markets than the financial and economic behemoths of the world.
There are fewer restrictions, fewer demands, their standards are easier to meet and there is much more room for mutual flexibility.
This model should be extended to the entire central Asian region. Geography has locked those countries and Pakistan in an embrace of interdependence; a fact not lost on travellers and traders for centuries.
Now all we have to do really is bring those same alliances and highways alive once again in a brand new setting.
A good place to start is finalising a mechanism, as PM Sharif pointed out, to transport goods from Karachi port to Tajikistan via Afghanistan and then from Dushanbe, through Afghanistan, to Karachi via railroad.
Pakistan should also increase efforts to join the China-Tajikistan-Afghanistan trade corridor project as well as any other initiative aimed at increasing multilateral trade.
Mutually beneficial investment contracts and bi- and multilateral trade deals are key to progress in the 21st century. It’s unfortunate that Asian countries could never overcome their own internal problems and follow the European example of integration.
That’s why Pakistan’s outreach to central Asia is so important. Islamabad should push for more trade deals with these countries, even free trade agreements where feasible, and set a timeline to increase trade quantum and revenue.
This is the kind of progressive thinking that is crucial if Pakistan is ever to snap out of its terrible liquidity crunch. It’s for a reason that the PM is mentioning investment opportunities in the country alongside trade initiatives.
FDI is the most overlooked and under-appreciated component of the current account in this country precisely because it has all but run dry for so long that even experts have stopped incorporating it in their calculations.
Hopefully, the MoUs and deals discussed and signed will take shape sooner rather than later.
The new IMF programme is a relief, but there’s no time to celebrate nor is there any room for complacency. Soon its tough conditions will start to bite, taxes will hurt, bills will inflate and inflation might tick up again.
That’s when we’ll also need to show more revenue; for which so far the only hope is regressive, punishing indirect taxation. So the sooner innovative trade and investment deals start bringing money into the country, the better for everybody.
Copyright Business Recorder, 2024
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