Rise in Barter Trade
Barter trade may sound like a means of commerce suitable to an ancient marketplace rather than a modern business environment. According to the International Reciprocal Trade Association — an organization created to promote “just and equitable standards” in modern bartering — the U. S. barter market is worth a staggering $ 12 billion annually. In other words, $ 12 billion worth of goods and services are traded every year without any currency changing hands.
As a matter of fact, bartering has helped many struggling companies to grow and conserve cash. Still, bartering as a business practice is in its infancy. People require more organized encouragement to choose bartering.
In the changing economic scenario of the 21st century, Pakistan and Iran have decided to derive benefits from each other’s industrial and agricultural development through barter trade. Pakistan has decided to export a million tonnes of wheat to Iran under a barter deal, as Western sanctions over Tehran’s nuclear programme squeeze its ability to pay for food imports.
According to Tanvir Alam, a spokesman for the Ministry of Water And Power, “The only decision so far is that we want to export a million tonnes of wheat. We would prefer to get fertilizer in return but have to see what is on the table. There is also a possibility of iron ore being part of the deal.” Apart from Pakistan, Iran has approached India and has purchased wheat from Russia, Germany, Canada, Brazil and Australia to build up stocks.
Similarly, Pakistan is also engaged in exporting female camels to UAE on the personal request of Sheikh Muhammad, the ruler of Dubai. According to Alam, “Export of live animals is not banned, but only those animals can be allowed to be exported which are not used for breeding,” adding that a health certificate was also essential for animal export.
The government had set an export target of 250,000 live animals, but only 15,000 could be exported so far in 201112. In 2010- 11, 223,000 live animals were exported whereas the target was 250,000.
Also, as Pakistan and India have revived the Attari land border, there is a new barter trade through cross- border truck movements through the new Integrated Check Posts. Pakistani trucks carry dry fruits, dry dates and gypsum to India.
This shows that barter trade can exist in today’s economy and can save countries suffering from severe financial instabilities as a result of hyperinflation. Commercial activities in a barter economy are restricted mainly between two nations or business communities. Such an economy is popular at the time of significant commercial dealings between countries or companies concerning exchange of goods since financial limitations affect the smooth operation of such activities. A deep sense of reciprocation, together with substitution of redistribution for market exchange characterizes the barter economy. Pakistan can greatly benefit from barter trade during times of financial emergency.