LAHORE: As the barter trade is set to start with Russia, Afghanistan and Iran the SAARC Chamber Vice President and the BMP Chairman, Mian Anjum Nisar on Monday observed that the move will exploit the untapped trade potential with these countries, as the government is desperately trying to manage a balance of payments crisis and bring inflation under control, with foreign exchange reserves of just one month’s imports’ cover.

The FPCCI’s Businessmen Panel (BMP) Chairman and the newly-elected Vice President of SAARC CCI Mian Anjum Nisar stated that the barter opportunity is important considering the dollar shortages the country is facing face. He pointed out that Pakistan could gain from the barter trade, particularly from oil and energy imports from Russia and Iran without adding to dollar demand.

He appreciated Islamabad as well as other three countries to take serious initiatives to remove hurdles to bilateral trade, asking them to also take benefits of China-Pakistan Economic Corridor projects.

In order to meet the objective of barter trade mechanism all parties must finalize international mechanism to remove difficulties in barter trade. He said that barter trade was in fact a right decision, which could boost Pakistan’s foreign exchange reserves through escalation in exports.

While it may not solve currency smuggling, particularly at the Afghanistan border, it can discourage smuggling of goods from Iran, such as diesel, and Afghanistan which is hurting the economy, he added.

After Pakistan’s first purchase of discounted Russian oil in April, he told that the country would only be buying crude, not refined products, under the deal.

The government order, called the Business-to-Business (B2B) Barter Trade Mechanism 2023 and dated June 1, lists goods that can be bartered. State and privately owned entities would need approval to participate in the trade mechanism.

Copyright Business Recorder, 2023