In these turbulent times for the country it would not be wrong to suggest that Pakistan’s economic fortunes are tied to the east and not to the Western hemisphere.
Pakistan’s imbalance of trade with the Western world does not work in its favor despite huge amounts of financial aid. It needs to look for new economies and destinations of trade on the basis of mutually beneficial business.
This new approach of looking towards the east is visible in some of the government’s latest policies.
The ongoing activities to bolster trade ties between Pakistan and China and frequent exchange of business delegations led by head of states and important personalities among the Central and East Asian countries clearly points out the growing realization of the importance of trade between the two countries.
Apart from China, a close friend of Pakistan, Islamabad’s intention to establish strong and durable trade ties with the Commonwealth of Independent States (CIS), the eastern regions of Russia, shows a pragmatic approach. The markets in this region could give a good yield to Pakistani producers.
The landlocked countries of Central Asia can also improve their economic profile by improving economic ties with the rest of the world through linking its trade to sea routes via Pakistani ports especially the newly developed Gwadar Port. The importance of trade relations with the CIS countries was underscored during a visit of almost a 111 member business delegation headed by Trade Development Authority of Pakistan (TDAP) to Tajikistan recently, where businessmen from both sides looked at the potential for commercial ties.
Major issues like direct air service, land route, and lack of banking channels for traders was discussed by the delegation which was headed by TDAP Chief Executive Tariq Iqbal Puri, with the president of Tajikistan and other ministers. The potential for Pakistani products in the foreign country was also discussed by all the business groups of various sectors.
Tajikistan, which is only 578 kilometres from Torkham and 14 kilometres from Pakistani Border is important as a gateway to other central Asian courtiers like Kazakhstan, Uzbekistan, Kyrgyzstan and the eastern part of Russia. Dushanbe can be a central market for all landlocked state. Besides being part of the free CIS Economic Zone, goods manufactured in Tajikistan get duty free access in 280 Million CIS Free Economic Zones.
During a market survey of Dushanbe, it was found that many Pakistani products like pharmaceutical products, medicines, leather, garments and shoes are already exported to the country. Other goods like bed sheets, curtain cloth, knitwear, ready made shirts, trousers, ladies dresses, jeans, under garments, machinery: printing, agricultural, chemicals, sports gear, toiletries, perfumes, fruits, vegetables, sanitary, ceramics, washing machines, electronics, stainless steel crockery, non stick, pressure cookers have a profit margin ranging from 80 to 500 per cent.
A survey of a major commodity market of Dushanbe, “Bozore-e-Shah Mansoor” also revealed that except for agricultural products like fruits and vegetables which are locally cultivated, almost 80 per cent of commodities were imported from the neighboring countries like Russia, China and Afghanistan. The local products were also bond by season. Potatoes and onions grown in Pakistan can hold significant profit margins during the off season in Dushanbe. Pakistani mango and other fruits such as oranges can make strong inroads in not only Tajikistan but other countries of the region as well.
Tajik president in a meeting with the Pakistani delegation promised to facilitate and start an air service so that agricultural produce can be exported to the neighboring country. Medicine and pharmaceutical items also have great demand in Dushanbe. A Pakistani company has even secured an agreement to establish a syringe making plant in Tajikistan.
Pakistani exporters also have a better opportunity to introduce the country’s sports goods in the Dushanbe markets. Pakistan’s major export to Tajikistani market is cement which has a high demand and is supplied through Kabul. Realizing the increasing demand in Dushanbe Pakistan has also planned to establish a Cement Plant in the foreign country but currently due to the shortage of gas the important project is facing delay.
However, the Pakistani side during the recent visit to Dushanbe has suggested that the latter use electricity as an alternate source to manufacture cement as is being done in the West. Apart from the plant, the concerned authorities in Islamabad and cement exporters should also be conscious that some of the importers in Tajikistan were complained that the cement imported via Kabul lost its quality day by day. This, they say, may harm the existing pace of import from Pakistan.
Interestingly, almost 85 to 90 per cent of commodity markets in Dushanbe were being run by women and their participation in other walks of life as compared to the men is also pretty high.
Remittance is a major factor for the Tajik economy as almost one million young men are working not only in Russia but also in other countries like Dubai, China, Iran, Japan, Turkey and other countries in the region. Tajikistan has low import duties while the currency is stable and one Sumoni is equivalent to 20 Pakistani Rupees. According to experts, the policy shift to look east, is not only to have good trade ties with central Asian states but also Russia, as Pakistani exporters have traditionally focused on the European part of Russia. Eastern or Siberian Russia which, contrary to common knowledge, has cities with sizeable population remained neglected by Pakistani exporters.
These cities with middle and lower income segments of population are more suitable for Pakistan’s exports. China has the advantage of direct access to whole of the southern Russia with road and rail links. Both the countries are taking increased market share in the products like sports goods, leather and apparel. Pakistan can carve out a share in the Russian market once the land route to Central Asian countries is open.
It is also worth mentioning here that other states like Kazakhstan, Uzbekistan and Kyrgyzstan are trying to enhance their trade relations with Pakistan and the frequent visits of heads of states of these countries to Pakistan have paved the way for a mutually beneficial economic relationship.
