Iran Thursday said progress on the mega project of Iran-Pakistan (IP) pipeline project was slow and being affected by international pressure and other factors.
Further, Tehran expressed a strong desire for establishing banking channels with the neighbouring Pakistan for which Iranian side had held several meetings with last four governors of the State Bank of Pakistan.
Also, the Karachi Chamber of Commerce and Industry (KCCI) called for the setting up of Karachi-Tehran Joint Chamber of Commerce and Industry to explore the huge trading potential between the two bordering countries.
“The progress on mega project on cost sharing basis between the two countries is slow,” Consul General of Iran in Karachi Abbas Ali Abdollahi told a farewell reception held here by KCCI in honour of the outgoing consul general on the completion of his 29 months assignment in the city.
Abbas said Iran had laid 1200 kilometres pipelines from Bander Abbas up to Balochistan border, but international pressure and other factors were affecting the progress on the “peace pipeline”.
He said Iran being next door neighbour could give energy in 10 cents to Pakistan. The consul general hoped that international sanctions against his country won’t affect historical relations between the two brotherly Muslim countries. “In future a lot of avenues of mutual cooperation would open,” he said adding Pak-Iran friendship would further strengthen in future.
Abbas, however, said unlike political relations bilateral trade ties between Pakistan and Iran were not reflecting the existing potentials due to the sanctions.
The consul general said he had held several meetings with last four governors of the SBP on the establishment of banking channel between the two countries.
The Bank Milli of Iran could open its branches in Pakistan and in reciprocity National Bank of Pakistan could do the same in Iran, he said.
He viewed Pakistan’s banking channels were established with various countries worldwide thus with Iran should not be neglected. He said top leadership and ministers do have the will to cement ties whereas progress on the implementation side was slow.
He asserted that initiatives were required to formalize undocumented trade between the two countries.
About the regional blocks, the Iranian consul general said the ECO was not much vibrant as compared to RCD. He opined that there should be no embargo on Pak-Iran trade as other countries of the world were doing trade with Iran. He said Iran’s trade with other regional countries was higher as compared to Pakistan. Pakistani rice, wheat, fruits, dry fruits, mangoes, textiles items, petrochemical, livestock, meat, dairy had a great demand in Iran. Talking to Abbas, President KCCI Muhammad Haroon Agar stressed the need for the establishment of Karachi-Tehran Joint Chamber of Commerce and Industry.
Agar urged the governments of Pakistan and Iran to introduce banking channel and make arrangements for currency swap to enhance bilateral trade. He said the business transactions between Iran and Pakistan were routed through Asian Clearing Union which was more time-consuming than a normal Letter of Credit. While opening an LC through Iran’s sister companies in Dubai also adds to cost, he said.
The KCCI chief also stressed the need for taking measures such as economic integration and reduction in transaction costs, port-to-port activities and customs mechanism to expand the volume of bilateral trade. He urged to activate and develop regional trading block of ECO countries, particularly between Pakistan, Iran and Turkey. He proposed that the trade between Pakistan and Iran should be permitted in local currencies instead of dollars and the trade through railways and road be regularized.
Agar viewed that Pakistan being energy-hungry country should seriously consider implementation of Iran-Pakistan Gas pipeline project which is burning need for Pakistan to overcome the energy crisis and for industrialization.
He also called for deepening of the existing Preferential Trade Agreement which was signed in 2004 to be followed by a Free Trade Agreement. Upon agreement or on arrangements of barter trade Iran may export electricity and petroleum products to Pakistan. He underscored the need of regular exchange of trade delegations and organizing of exhibitions to enhance bilateral trade. He emphasized on the need of documentation of trade and formalize it through Balochistan border from where presently barter trade was in practice.
