Trade with Central Asia
13 April 2024
Published in: Pakistan Observer
PAKISTAN’S exports to five central Asian countries (CACs) witnessed a growth of 21.17% during the first eight months of the current fiscal year over the corresponding period last year. In absolute terms, the value of Pakistan’s exports to the five central Asian countries — Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan — rose by 21.17pc to $158.07 million in July-February 2024 from $130.45m during the same period last year.
Over 21% growth in exports to the Central Asian countries is a positive development as it shows increasing trade ties but in dollar terms the trade with the region is much below its true potential, which should be a source of concern for our policy-makers. Independence of CARs offered immense opportunities for establishing a robust relationship with the countries of the region but no practical measures were initiated to tap this potential in a meaningful way. Experts point out that CARs are landlocked and Pakistan, as a neighbouring country, has not historically focused on ground transportation logistics to connect with the CARs. Pakistan’s exports often reach CARs through Afghanistan, which places restrictions on Pakistani transporters, requiring them to have an Afghan partner for cargo transportation. Apart from high cost of transportation, there is also the issue of liquidity crunch in CARs and as a result payments to Pakistani exporters remain challenging due to currency shortage. Opening Letters of credit (LCs) and utilizing them in the CARs is also problematic besides the issue of packaging and labelling requirements in relevant languages pose ongoing challenges for Pakistani exporters. While a quantum jump in trade with the CARs is deeply linked to sustainable pace in Afghanistan and cooperative mode of the Afghan Government, there are bright prospects for enhancing commercial ties by sorting out problems of the exporters through mutual consultations and exploring ways and means to make the Gwadar port relevant for these countries. Gwadar offers them shorter trade routes, energy connectivity, and economic opportunities, making it a crucial gateway for regional development and cooperation.
