The Ministry of Commerce, Government of Pakistan has issued a special letter under which specific goods including petroleum and natural gas can be traded with Afghanistan, Iran and Russia under the barter system (exchange of goods). This is a very important step which will help in handling the declining foreign exchange reserves and controlling inflation.

This permit issued by the Ministry of Commerce includes a list of food items including fruits and vegetables and dozens of industrial products. At a time when Pakistan is facing a decline in its foreign exchange reserves after repaying its foreign debt installments, millions of dollars worth of imported goods lying at the ports have not been cleared in time, leading to heavy fines from shipping companies.

Due to fear of over-expiration and non-timely delivery of raw materials, industrial processes suffer from slowness and losses. At present, many countries are trading goods with their trading partners.

The importance of China and Central Asian states including Iran, Afghanistan and India cannot be denied in the region in which Pakistan is located. These countries have extensive trade in food, raw materials, and industrial products, including energy, and can meet each other’s needs, and not all can afford a dollar monopoly.

In the wake of unprecedented economic crisis in the country, the Financial Gurus have termed the border trade as need of the hour and as such, analysts advise the government to eliminate barriers like unnecessary check posts to border trade solve the problems of trade and traders so that they can move with ease and concentrate on the trade.

They say that for economic revival in the country, it is necessary to focus on barter trade and facilitate border markets to make bilateral trade more well-organized, effective and efficient.

Earlier this month, the Govt inaugurated Border Market on Pak-Iran border and Iran-Gwadar Power Projects, which are a good omen for the barter trade between the two Muslim neighbours.

It will not only help promote bilateral trade but also provide employment opportunities to both people across the border.

As a matter of fact, Iran and Pakistan are brotherly neighbouring Islamic countries, having deep-rooted cultural, and historical, religious, commercial and diplomatic ties since the inception of Pakistan. In fact, Iran was the first country to recognise Pakistan as an independent state after the creation of Pakistan in 1947.

There exists greater potential of bilateral trade between the two states, but it needs commitment on Govt level on both sides.

The two sides can expand trade in power and energy sector products like crude oil, gas and eatables like essential commodities.

And one hopes that this would not be the only border market, there is potential for more such markets, which should be established to tap the potential of regional trade as this border is a historic trade corridor, which is evident from the history of the region.

On the other hand, a 138-km long transmission line between Gwadar and Iran border has also been laid to ensure a regular supply of electricity to the consumers after the commencement of the project.

In the backdrop of changing world economic scenario due to increasing prices of energy and food sector products mainly oil, there is a strong need for enhancing trade ties with Iran who can help us in this critical juncture of period.

Last year, the Foreign Minister Bilawal Bhutto Zardari’s  visited Iran.

The visit focused on the vast spectrum of bilateral ties ranging from cultural affinity to shared religious background, people-to-people contract, Iran’s support to Pakistan on Kashmir dispute and also mainly focused on facilitating trade endeavors and exploiting the existing potentials of trade between the two sides and taking them to new heights.  There is no denying that Iran is not only our most trusted next door neighbor with whom Pakistan has no dispute, but there exists a vast scope for trade and bilateral ties as there is no trust deficit between the two.  Their ties date back to the days when Pakistan emerged on the map of world because Iran was the first country to recognize Pakistan after it came into being in August 1947. And the first head of any state to visit Pakistan after its independence was also Shah of Iran who paid an official visit to Pakistan in 1950.

Iran’s unwavering support to Pakistan on the Kashmir dispute is also a known fact. 

It may be mentioned here that Pak Iran trade endeavors are increasing in recent years.

In January last, as many as 39 memorandums of understanding regarding enhancing trade volume with Iran were signed.

This series of MOUS, signed earlier this year, will definitely improve economic ties and will ensure new era in bilateral projects pertaining to transportation, tourism, IT, fisheries, forests and mineral etc.

The MoUs were inked at the completion of a two-day moot organized by the joint border trade committee in January this year.  Financial experts say that following this new development, both countries through their trade bodies represented by Zahidan Chamber of Commerce, Industries, Mines and Agriculture and Quetta Chamber of Commerce and Industry  will take the trade to new horizon and will explore new arenas.

The border markets and the MoUs can help Iran and Pakistan which are the two important countries in the region, to utilize the exiting scope for expanding their economic capacities in sectors which need to be further explored.  And to achieve objectives, the existing obstacles in the way of free trade between the two states must be removed on priority and urgent basis.

The situation demands that under the barter system, efforts should be made to extend the scope of trade agreements with China, Iran, Afghanistan and Russia to other countries, the biggest benefit of which is to discourage illegal trading and smuggling of dollars in the country. and will help the value of the rupee to improve.

Published in The Daily National Courier, June, 06 2023

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