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BloomBerg

Published Date: May 10, 2021

https://www.bloomberg.com/news/articles/2021-05-09/pakistan-seeks-more-trade-with-central-asia-in-diversity-push

Pakistan Seeks More Trade With Central Asia in Diversity Push

Pakistan is looking to intensify trade with neighbor Afghanistan and countries in Central Asia, as it looks to diversify commerce beyond the top players, the nation’s trade adviser said.

The South Asian nation is looking to finalize a new trade accord with Kabul by June, Abdul Razak Dawood, the commerce adviser to Prime Minister Imran Khan, said in an interview in Islamabad. It plans to grow trade with five landlocked Central Asian nations — Uzbekistan, Tajikistan, Turkmenistan, Kyrgyzstan and Kazakhstan — to about $1.5 billion a year from less than a billion in the past decade, he said.

“We’re too restricted to a few countries — North America, European Union and China,” said Dawood. “But there is a much bigger world.”

The U.S. withdrawal from Afghanistan promises a return of stability and provides an opportunity to Pakistan to strengthen commerce with its neighbor, which sits at the cross-roads of South and Central Asia. Also, Islamabad stands to benefit from greater trade with Central Asian markets that are rich in energy resources needed to feed its ambition to grow its industrial base.

Pakistan is due to sign transit and preferential trade agreement with Uzbekistan in July, Dawood said.

The South Asian economy’s move to scout for newer markets stems from the need to diversify its trade basket that’s heavily reliant on the U.S., EU and China. Of its total $66 billion of annual trade in the year ended June 2020, China accounted for $11.2 billion and North America $6.76 billion, according to data from State Bank of Pakistan.

Analysts see the new push in the context of Pakistan’s geo-strategic framework, which draws from the economic cooperation espoused by Chinese President Xi Jinping’s Belt and Road Initiative.

While China has channeled investments toward electricity generation in Pakistan as part of its Belt and Road Initiative, it’s financing has also been focused on gas- and oil-based projects for exploration and distribution in Central Asia.

“Economy is one part of the strategic outlook,” Vaqar Ahmed, joint executive director at Sustainable Development Policy Institute said. “Ultimately you would need economy, trade and investment cooperation to keep excitement in your strategic interests.”