Re­think­ing Pak­istan’s role in re­gional trade

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Pak­istan’s track record as a mem­ber of re­gional trade and co­op­er­a­tion blocs has been dis­mal and un­favourable. The coun­try has not ben­e­fit­ted in any sig­nif­i­cant way nor has taken max­i­mum ad­van­tage of the fa­cil­i­ties and at­trac­tions pro­vided by these blocs and or­gan­i­sa­tions. More­over, the do­mes­tic pri­vate sec­tor has also been at fault in pro­mo­tion of its prod­ucts and ser­vices among trade part­ners. At times, other con­tentious is­sues, whether po­lit­i­cal, diplo­matic, or ter­ri­to­rial, have over­shad­owed trade and in­vest­ment ini­tia­tives and move­ment.

Re­gional trade and link­ages have be­come pow­er­ful chan­nels and tools in en­hanc­ing trade and in­vest­ment and the suc­cess rate of re­gional eco­nomic blocs and or­gan­i­sa­tions have gen­er­ally brought about sig­nif­i­cant ad­van­tages for mem­ber coun­tries. No na­tion can pro­duce ev­ery­thing re­quired by cit­i­zens and that is why coun­tries im­port and ex­port. There­fore, the need to forge al­liances and co­op­er­a­tion through a struc­tured or­gan­i­sa­tion be­comes im­por­tant. The ad­van­tage of hav­ing re­gional trad­ing blocs is that a com­mon in­ter­de­pen­dent plat­form en­ables mem­bers to de­velop a func­tional frame­work of tar­iffs, cus­tom pro­ce­dures, pro­tec­tion poli­cies, qual­ity stan­dards, and even bi­lat­eral ar­range­ments, etc.

Pak­istan had joined Iran and Turkey to form the Re­gional Co­op­er­a­tion for Devel­op­ment in 1964 to strengthen so­cio-eco­nomic devel­op­ment. How­ever, RCD was dis­solved fif­teen years later be­cause it did not live up to ex­pec­ta­tions. In 198R, the three erst­while part­ners of RCD formed Eco­nomic Co­op­er­a­tion Or­gan­i­sa­tion that was ex­panded in 1992 with the in­clu­sion of Afghanistan, Azer­bai­jan, Kaza­khstan, Kyr­gyzs­tan, Ta­jik­istan, Turk­menistan, and Uzbek­istan. As is the case, there is no fo­cused struc­ture and most of the en­ergy is spent in meet­ings and pre­par­ing doc­u­ments, and lit­tle be­yond generic state­ments. There have been no sub­stan­tial eco­nomic ben­e­fits for us.

Pak­istan is also a mem­ber of Cen­tral Asia Re­gional Eco­nomic Co­op­er­a­tion (CAREC) Pro­gramme along with ten coun­tries, namely, China, CAR coun­tries, Ge­or­gia, Mon­go­lia, and Afghanistan. CAREC is sup­posed to help Cen­tral Asia and its neigh­bours re­al­ize their sig­nif­i­cant po­ten­tial by pro­mot­ing re­gional co­op­er­a­tion in four pri­or­ity ar­eas trans­port; trade fa­cil­i­ta­tion, en­ergy, and trade pol­icy. Here too, Pak­istan has not suc­cess­fully pen­e­trated the CAR coun­tries, while of­fi­cial trade with Afghanistan is on the de­cline. Im­ports from China have shot up to over $11 bil­lion, although this fig­ure does not re­flect the ac­tual im­ports be­cause of un­der-in­voic­ing, mis-dec­la­ra­tion and smug­gling.

In 200R, Pak­istan, as well as In­dia, were in­ducted as mem­bers of the Shang­hai Co­op­er­a­tion Or­gan­i­sa­tion (SCO). At the Dushanbe (Ta­jik­istan) Sum­mit in 2000, mem­bers agreed to “op­pose in­ter­ven­tion in other coun­tries’ in­ter­nal af­fairs on the pre­texts of ‘hu­man­i­tar­i­an­ism’ and ‘pro­tect­ing hu­man rights’ and sup­port the ef­forts of one an­other in safe­guard­ing the na­tional in­de­pen­dence, sovereignty, ter­ri­to­rial in­tegrity, and so­cial sta­bil­ity”. De­spite the pres­ence of China and Russia, the In­dia-Pak­istan bor­der sit­u­a­tion is hos­tile and ag­gres­sive. There has been no coun­selling, me­di­a­tion, or rep­ri­mand from the SCO head­quar­ters.

Then there is the South Asian As­so­ci­a­tion for Re­gional Co­op­er­a­tion (SAARC) of eight coun­tries. SAARC was con­sid­ered as the ideal fo­rum for Pak­istan to en­hance re­gional trade, en­sure a peace­ful en­vi­ron­ment, cre­ate a cit­i­zen-cen­tric fa­cil­i­ta­tion mech­a­nism and pro­mote a myr­iad of aux­il­iary ini­tia­tives within the South Asian re­gion. This vi­sion­ary co­op­er­a­tion agree­ment should have brought about a friendly at­mos­phere be­tween In­dia and Pak­istan. The huge econ­omy of In­dia should have been the driv­ing en­gine to pro­mote trade and in­vest­ment and pro­vide the crit­i­cal mass to neigh­bours to take pos­i­tive ad­van­tage of the gi­ant In­dian mar­ket. SAPTA and SAFTA were to be the game changers. How­ever, there has been no worth­while benefit to Pak­istan in real time. The fate of SAARC Head of State Sum­mits is pri­mar­ily de­pen­dent on whims and de­sires of New Delhi.

The re­cent can­ce­la­tion of the Is­lam­abad Sum­mit is a vivid ex­am­ple of this fact. So much so, even Sri Lanka, the most vo­cal sup­porter of Pak­istan in SAARC, also toed the In­dian line. Bangladesh rou­tinely rat­tles Pak­istan. Bhutan, Nepal, Mal­dives, and even Afghanistan look more to­wards In­dia rather than at­tempt­ing to bridge the di­vide be­tween Is­lam­abad and New Delhi.

All in all, Pak­istan has been get­ting the short end of the stick. The

de­press­ing fact is that Pak­istan’s po­lit­i­cal lead­er­ship, as well as pri­vate sec­tor, has sel­dom at­tempted to give im­por­tance to the re­gional fo­rums in the true sense. There is al­ways a flurry of ac­tiv­ity in at­tend­ing and host­ing meet­ings and con­fer­ences but when it boils down to brass tacks and essence, there is no in­sti­tu­tion­alised or co­he­sive plan of ac­tion to gain mean­ing­ful ad­van­tages and make prag­matic and prof­itable in­roads. The fa­mous quote in Wil­liam Shake­speare’s play, Julius Cae­sar, re­flects the pre­vail­ing sit­u­a­tion “The fault, dear Bru­tus, is not in our stars, But in our­selves, that we are un­der­lings.”

Pak­istan has Free Trade Agree­ments with Sri Lanka, China, and Malaysia while Pref­er­en­tial Trade Agree­ments have been signed with Iran, In­done­sia, and Mau­ri­tius. This is Pak­istan’s record card. Ev­ery now and then, the Prime Min­is­ter or Com­merce Min­is­ter an­nounces the im­mi­nent sign­ing of PTAs with a host of coun­tries such as Turkey, South Korea, Thai­land, Jor­dan, etc. Noth­ing much comes out of these state­ments and there is a stand­still on the FTAL PTA front. More­over, Pak­istan has not taken max­i­mum ad­van­tages in ex­port en­hance­ment while these agree­ments have been a boon for im­porters.

One of the pil­lars of the Strate­gic Trade Pol­icy Frame­work 201R-2018 stip­u­lates mar­ket ac­cess through en­hanc­ing share in ex­ist­ing mar­kets, exploring new mar­kets, trade diplo­macy and regionalism. STPF high­lights a num­ber of steps to be taken through mul­ti­lat­eral, bi­lat­eral, and re­gional ways. Vi­sions and poli­cies be­come a re­al­ity only if prop­erly and pas­sion­ately im­ple­mented. There are two more years to nav­i­gate through the tur­bu­lent wa­ters and achieve rel­a­tive suc­cess. Achiev­ing suc­cess would be a lit­mus test for the po­lit­i­cal gov­ern­ment since na­tional elec­tions are due in 2018 and the trade in­di­ca­tors are not pos­i­tive at present.

Pak­istan and Afghanistan are still try­ing to re­move the cob­webs from the Afghanistan-Pak­istan Tran­sit Trade Agree­ment and there is a long hia­tus in the process of ne­go­ti­at­ing and ap­prov­ing the Afghanistan-Pak­istan-Ta­jik­istan Tran­sit Trade Agree­ment. Pak­istan rat­i­fied the Trans­ports In­ter­na­tionaux Routiers (TIR) Con­ven­tion in 201R and is in the process of im­ple­ment­ing it. More­over, the pro­posed Land Port Au­thor­ity is still just on pa­per and no progress has been re­ported.

The two prime stake­hold­ers re­spon­si­ble for se­cur­ing a strong pres­ence in the global mar­ket­place are the pol­i­cy­mak­ers and the ex­porters. The ex­port regime has sub­stan­tially been af­fected by the nar­row vi­sion of de­ci­sion mak­ers to ac­cord pri­or­ity and im­por­tance to the ex­ports from Pak­istan. The ex­porters face many road­blocks and hin­drances that im­pact neg­a­tively on ex­ports and it is im­per­a­tive that most of these road­blocks and hin­drances are re­moved or cleared. From non­pay­ment of ex­port re­funds, from mi­suse of Ex­port Devel­op­ment Funds, from in­fra­struc­ture short­ages, from out­dated and re­gres­sive laws, rules and reg­u­la­tions, and from other fa­cil­i­ta­tion, there is hardly a com­fort zone for ex­porters. Iron­i­cally, most of Pak­istan’s re­gional com­peti­tors are pro­vid­ing open and hidden sub­si­dies and fa­cil­i­ties to their ex­porters.

There is also an ob­vi­ous dis­con­nect be­tween pres­ti­gious think tanks and re­search en­ter­prises and the pri­vate sec­tor. It is high time that the pol­i­cy­mak­ers, pri­vate sec­tor, as well as these think tanks ini­ti­ate a com­pre­hen­sive long-term ac­tion plan to get Pak­istan on the ex­port wagon. The fo­cus should be on global mar­ket­ing of Brand Pak­istan and the rec­om­men­da­tions should be prac­ti­cal, work­able, and owned by both gov­ern­ment and pri­vate sec­tor. They must re­cal­i­brate their ap­proaches to em­brace a new for­ward-look­ing strat­egy an­chored in the fun­da­men­tals of geo-eco­nomics.

A vi­sion on pa­per is worth noth­ing. A vi­sion, if im­ple­mented, is worth its weight in gold. That is where the crit­i­cal mass of think tanks comes into play. Too much wa­ter has flowed un­der the bridge and the ex­port regime con­tin­ues to fall into the abyss. This dire sit­u­a­tion is ef­fec­tively evis­cer­at­ing the coun­try’s abil­ity to in­vest in the pros­per­ity of the peo­ple.

There­fore, in all sin­cer­ity, mem­ber­ship in re­gional fo­rums is not help­ing Pak­istan. A re­think­ing is re­quired. Ini­tially, Pak­istan must an­nounce uni­lat­eral sus­pend­ing of mem­ber­ship in SAARC since the re­gional bloc has proved to be of lit­tle ad­van­tage. Pak­istan would also not take ac­tive part in any or­gan­i­sa­tion un­der the SAARC um­brella, such as SAARC Cham­ber of Com­merce and In­dus­try, SAFMA, etc. In­stead, Pak­istan must con­cen­trate on con­nec­tiv­ity with China, Russia, Iran, Afghanistan, and CARs, through mul­ti­lat­eral and bi­lat­eral means. In the words of Ed­ward Porter Humphrey, “True wis­dom is to know what is best worth know­ing, and to do what is best worth do­ing.”

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