Rise in Barter Trade

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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.

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